Block Grant

A Block Grant is money that is awarded, or granted, by a national government to state and local officials. Block grants are earmarked for a specific project or projects, and typically there are guidelines as to how the money can be spent. In addition, state and local governments add their own guidelines and will sometimes distribute a portion of the grant to other organizations, which likewise have their own guidelines and rules regarding how the money is used and for what purpose.

Although block grants have fallen out of favor in recent decades, a number of these programs still exist. One of the most enduring is the Community Development Block Grant (CDBG) program under the Department of Housing and Urban Development.

 The CDBG program provided annual grants on a formula basis to 1209 general units of local government and states in 2018, according to HUD.

"The CDBG program works to ensure decent affordable housing, to provide services to the most vulnerable in our communities, and to create jobs through the expansion and retention of businesses. CDBG is an important tool for helping local governments tackle serious challenges facing their communities. The CDBG program has made a difference in the lives of millions of people and their communities across the Nation," HUD stated.

HUD said it determines the amount of each grant by using a formula comprised of several measures of community need, including the extent of poverty, population, housing overcrowding, age of housing, and population growth lag in relationship to other metropolitan areas.

Another example of a well-known block grant in the United States is the Mental Health Block Grant. Established in 1981, the MHBG has disbursed millions of dollars to individual states to assist in the treatment of mental illnesses. The grant was amended in 1986 to require that states utilize State Mental Health Planning Councils, comprised primarily (at least 51%) of family members and non-treating professional citizens, who develop comprehensive service plans.

The Social Services Block Grant Program (SSBG) is "a flexible funding source that allows States and Territories to tailor social service programming to their population’s needs. Through the SSBG States provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements," according to the Office of Community Services.