Grants are a form of federal assistance consisting of payments in cash or in kind for a specified purpose and they represent an important tool for achieving national objectives. They vary greatly, including in the types of programs they fund, the methods they use to allocate funds to recipients, and the amount of discretion they give to the grant recipient on how the funds are spent. The Office of Management and Budget (OMB) has previously estimated that grants to state and local governments represent roughly 80 percent of all federal grand funding, with the balance going to recipients such as nonprofit organizations, research institutions, or individuals. This book provides an overview of federal funding levels in a time of fiscal constraint, with a focus on the challenge of continuing to support the current scope and breadth of federal grants to state and local governments.