What are Revenue Sharing Grants?

Revenue sharing grants refer to federal funds allocated to states or local governments with relatively few restrictions on how those funds can be spent. This type of grant is designed to give states the flexibility to allocate resources according to their specific needs and priorities, rather than meeting pre-defined federal mandates. Such flexibility is particularly significant as it allows for tailored responses to local issues, enabling states to address unique challenges or opportunities within their communities.

While other types of grants exist—such as those tied to specific federal mandates or emergency needs—revenue sharing grants stand out because they empower states by entrusting them with decision-making authority about funding use. This aligns with federalism principles, where power and responsibility are shared between national and state governments.