Government Funding – Operating, General Obligation Bonds, and the American Rescue Plan

This article discusses the three basic types of funding – operating, General Obligation Bonds, and the American Rescue Plan. Those are all forms of capital funding that the government uses to meet its operational and capital needs. We will look at each in turn. While operating funding is often cited as the primary source of funds, it is not the only one. General Obligation Bonds, which serve as another common source of funding, are also common sources.

Operating funding

Operating grants, also called unrestricted grants, are awarded to nonprofit organizations for the purpose of supporting their general mission and covering overhead expenses. These types of grants are highly competitive because they allow organizations to use the funds however they see fit. In order to get this type of funding, organizations must have a proven track record, have strong leadership and have a well-developed plan. In some cases, businesses may even have to pass an audit to receive a grant.

Reappropriations are commonly used for federally funded programs and capital projects. Typically, capital projects have an estimated cost for all phases of development, including land acquisition, design and construction. The funds that are allocated to each phase are disbursed to meet actual costs as each phase progresses. This process is repeated for each phase of the project. The difference between these two funding sources is the amount of money each phase will require.

General Obligation Bonds

General Obligation Bonds are debt securities issued by the government that are backed by the … READ MORE ...