Grant

A grant differs from other funding in three ways: it is not repaid, it is earmarked, and it is awarded competitively.

The last distinguishes a grant from a subsidy: a subsidy is granted on the recipient's formal characteristics, a grant on the results of a selection among applications against the donor's criteria.

What you get and what you give up

You get money you need not repay. You give up freedom in spending it: only on what the approved budget and work plan foresee, with substantial changes only through a formal amendment, and costs evidenced by reporting.

A grant usually does not cover the full cost of a project: the rest must come from co-financing.

A grant is a contract

The most common misconception is to read a grant as "aid". Legally it is a contract with obligations on both sides, setting deadlines, results, reporting, and grounds for termination and recovery.

Hence the consequences: failing your obligations can mean not only losing further funding but repaying what you already received.

Forms of payment

Reimbursement of actual costs – the classic model, where you evidence every cost. A lump sum – payment for completed work packages, with no cost evidence. Unit rates – a fixed amount per unit, for instance per researcher-month.