What characterizes a categorical grant?

A categorical grant is characterized by its provision of funds that Congress allocates specifically for certain designated purposes. This type of grant comes with strict guidelines on how the money can be spent, often requiring that it be used for particular projects or programs, such as education, transportation, or healthcare. As a result, recipient states or localities must adhere to the stipulated conditions, which ensures that the funds are utilized effectively according to the federal government’s objectives.

In contrast, categorical grants differ significantly from block grants, which provide broader funding with fewer restrictions, allowing states more flexibility in how the money is used. Therefore, the emphasis on specific appropriations and narrow usage of funds defines the essence of categorical grants and highlights their role in federal-state relations and policy implementation.