You've probably seen the ads, emails or websites which claim: "Free Money!" "Never Repay Cash Grants" and that you can use these grants for "Personal Needs, Medical Bills, Education, Business, Debt Consolidation, Real Estate, Your Home and more". Does this sound too good to be true? That's because it is!
Remember that a scammer can and will promise you anything to make the sale because their profit is whatever you are willing to fork over to them. Some of their pitches will sound very plausible, coming from fictional institutions with impressive sounding (but often generic) names.
These businesses encourage consumers to send an application fee of $20 to $250, with the promise that their financial needs and requirements will be matched with the most suitable private foundations. Or, they may promise to provide a list of available grants. These ads often claim that foundations can be a better source for finance than banks, anyone can get an interest free cash grant and that every year thousands, millions or billions of dollars in grants go unclaimed.
If you decide to respond to these ads, be aware that your name and information may never reach reputable foundations. Generally, obtaining a grant is a complicated process, requiring proper documentation, application forms and research. Although there may exist private foundations whose requirements are based on an individual's personal preference, the vast majority of grant-making foundations (governmental and non-governmental) require that applicants for funds meet very specific guidelines that the foundation has established, and that the funds be used for specific projects that the foundation wishes to support.
Be aware of the following advice:
- Watch out for phrases like "free grant money". Grants do not have to be repaid; thus there is no need to use the word "free." When you hear word like "free" and "guaranteed" be extremely sceptical. When was the last time you had to pay for a "free" item?
- Be aware that organizations do not usually give out grants for personal debt consolidation, or to pay for other personal needs. Grants are usually given only to serve a social good, such as bringing jobs to an area, training under-employed youth, preserving a bit of history, etc.
- Always remember to check out any company you plan to do business with by contacting your Better Business Bureau (BBB). Also check with a regional, provincial or state economic development office to see if they know of grant programs for which you might qualify.
- Visit your public library. Ask a librarian to help you find reference books describing foundations and the criteria they use in awarding grants.
- Be wary if you are asked to provide money up-front to an unknown company before the company will provide the services promised.
- If you are having financial problems, there are local non-profit credit counselling services who may be able to assist you with your problem at no charge.
- The government does not call people to offer them grant money over the phone.
- Be wary of hard sell tactics. Why would anyone giving away money use these tactics?
While we warn against government grant frauds, we want you to realize that real grants do exist. These grants are awarded for specific reasons. To receive this money you must show that the criteria for the grant has been met. Proving this requires submitting lengthy documents. Once you receive a grant administrators will ask for frequent status reports. It's a difficult process and rightly so. These grants are our tax dollars and we should hope that our money isn't being doled out for trivial reasons.
If you would like information on government grants, we suggest that you contact the government directly and avoid paying for books and other services peddled to consumers on TV, in the papers and on the internet.