subgrants

Subgrants are funds provided by a grant recipient to another organization to carry out part of a funded project. The original funder awards a prime grant to the pass-through entity, which then allocates a portion of the funds through a subgrant agreement to a subrecipient. The subrecipient receives the money to implement specific activities and must adhere to the grant’s terms, allowable costs, and reporting requirements.

Subgrants differ from contracts or subcontracts. A subrecipient typically has programmatic involvement in the project, may contribute to project outcomes, and is eligible for continuation based on performance. In contrast, a contractor or vendor delivers defined goods or services under procurement rules and may not participate in program design or management. Subrecipient monitoring and flow-down of applicable federal, state, or local requirements are common elements of a subgrant arrangement.

Lifecycle and administration of subgrants generally include selecting eligible subrecipients, issuing a subaward agreement, detailing budgets and allowable costs (including indirect costs), and setting reporting, performance, and audit expectations. Recipients monitor progress, review financial and programmatic reports, and conduct site visits as needed. Subgrants are typically subject to closeout procedures at the end of the award period and may require oversight to ensure compliance and proper use of funds.

Examples include universities or nonprofits receiving a federal grant and then distributing a portion of it to partner organizations to carry out defined activities. The specific requirements and terminology for subgrants vary by funder and jurisdiction, so guidance should be consulted for applicable rules and reporting standards.