Donation vs Grant: Difference and Comparison

Every nation in the world has people today who are in need or who are poor. In some countries, the relative poverty rate is high, while in others, it is low. Poverty-relief foundations exist in these countries.

Such foundations give money or gifts to the poor. Aside from that, the administration announced scholarships for deserving students. Some wealthy and charitable people assist the needy by donating gifts or money.

Key Takeaways

Donations provide financial assistance without expecting repayment, while grants require a specific purpose and adherence to guidelines.

Individuals, organizations, or corporations can offer donations, whereas grants come from various governmental or private funding sources.

Grants involve a formal application, but donations can be given informally without specific requirements.

Donation vs Grant

Donations are voluntary and without expectation of anything in return and can be made on a one-time or recurring basis. A grant is a sum of money given to an individual or organization for a specific purpose or project, awarded by government agencies or other organizations to support research or education

A donation is made by someone for charitable causes or to help a cause. Donations are also referred to as charity donations of products and services, that are sometimes referred to as “gifts courteously.”

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Finance Quiz

Test your knowledge about topics related to finance

1 / 10

What is the purpose of a budget?

To save for short-term expenses

To track and manage income and expenses

To save for long-term financial goals like retirement

To pay off debt

2 / 10

What is the full form of "LLC"?

Leverage Level Committee

Limited Liablity Company

Lender of Last Commodity

Limited Libility corporation

3 / 10

Which is not a cash activity listed on the cash flow statement?

Operating activities

Investing activities

Financing activities

Purchasing activities

4 / 10

What is the difference between debt and equity?

Debt represents ownership in a company, equity represents borrowed money.

Debt represents borrowed money, equity represents ownership in a company.

Debt is high risk, equity is low risk.

Debt is guaranteed, equity is not guaranteed.

5 / 10

What is the difference between saving and investing?

To save means to put money where it will grow very slowly (or not at all), and to invest means to put money where it will grow much faster

To save means to put money in a vehicle that is safe, protected from loss, and has guaranteed growth, and to invest means to put money in a financial vehicle or asset that has a certain amount of risk and no guarantees of growth

To save means to put money into any kind of an account at a bank, and to invest means to put money into a brokerage account

There is no significant difference between saving and investing. The words mean essentially the same thing and can be used interchangeably

6 / 10

What is the full form of "AGM"?

Annual Gross Marketing

Annual General Meeting

Annual Gain Margin

Annual General Marketing

7 / 10

The shares of well-established, financially strong and big companies having remarkable Record of dividends and earnings are known as:

Growth shares

Cyclical shares

Income shares

Blue chip shares

8 / 10

Government grants are generally offered to businesses in:

Properous areas

Economically deprived areas

Areas with high employment

Cold areas

9 / 10

The appreciation in the value of security or asset is called as:

Current return

None of these

Capital return

Total return

10 / 10

What is the difference between stocks and bonds?

Stocks offer guaranteed returns, bonds offer higher potential returns.

Stocks represent ownership in a company, bonds represent debt.

Stocks are high risk, bonds are low risk.

Stocks are only traded in physical form, bonds are only traded digitally.

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Typically, letters are sent to institutions informing them that those who need it more of any such donation and that it is up to them to choose whether or not to donate.

Grants are “funds” that are given to in-need people in an area. According to some laws and regulations, the govt, establishments, academic facilities, or a person can distribute these assets to the needy.

This category contains instructional scholarship money. Scholarships for deserving students are launched by the government or an educational institution.

There in the case of the educational facility, specific requirements for needy students are in place.

Comparison Table

Parameters of Comparison	Donation	Grant
Procedure	No application process needed	Application process needed
Condition	Donate freely to the needy or organization	Cannot donate freely
Eligibility	Given to the needy according to selection criteria and proper rules	No selection criteria are needed
Motive	The motive is simply to help the needy.	The motive is always specific to a certain reason.
Campaigns	Can be through donation campaigns	Always done either by request or campaign.

What is a Donation?

The term “donation” refers to “giving presents or funds to someone else for free.” Individuals and some organizations donate intending to reward or assist those in need.

People make donations to needy individuals in the form of presents or other items (groceries, garments, finances, etc.) based on their socioeconomic status.

They never go back on their generosity to the poor. Some people make donations to organizations that use the money to help needy children or people.

People are donating freely and just never inquire about charitable contributions to the organization again.

Restricted donation (permanent or temporary): People make a donation to the organization with a check and balance attached to them.

A few people have checks and balances to ensure that their money is being used for the purpose intended.

Those who don’t inquire about it after they’ve completed their mission (the temporary type of restricted donation).

Unrestricted Donation: A person donates with no constraints and never inquires about the charity to the organization again.

It is possible to donate in honor or recollection of anyone or something in the name of a 3rd person.

Donations in honor or memory of a 3rd party are decided to make for a variety of reasons, including Christmas presents, newly married gifts, in remembrance of someone who has died, through the memory of pets, or even in the name of that no longer established groups or organizations.

Survivors may request remembrance gifts, which are directed to a charity cause for which the deceased was a donor or volunteer, or to a cause appropriate to the victim’s priorities or manner of death.

Individuals who are unable to attend the event may also make memorial donations.

What is Grant?

Grants seem to be “resources” given to in-need people in an area. According to certain laws and regulations, the govt, institutions, academic facilities, or a person can distribute these funds to the needy.

This category also includes educational scholarships.

The government or an educational institution announces scholarships for deserving students. In the case of the educational institute, specific criteria for needy children are in place.

If a student is suitable for students that criterion, he or she is eligible for the scholarship. Scholarships announced by the government require some paperwork.

Students fill out the form as well as apply for the scholarship, and in need, students are given the scholarship.

A few foundations provide finances to individuals who want to establish a business. Such funds are provided after confirming the nature of their business and completing the proper documents.

Some grantmakers are now referred to as societal investors.

Writing grant proposals has evolved into a specialized activity so over the years. Numerous organizations hire fundraisers to do this work for them.

The fundraising career is ruled by The Institute of Fundraising in Great Britain and therefore is autonomously controlled by the Fundraising Regulator in Northern Ireland, England, and Wales.

The grant writing process generally entails searching for, submitting, and financial reporting for competitive grant money.

Main Differences Between Donation and Grant

An application procedure is required while Grant is given, whereas a donation can be made without such a procedure.
Anyone can donate without any conditions or procedures, but individuals can not grant such.
A person or a group is selected according to the needs, and then a donation is made, whereas a grant does not require any such selection criterion.
The motive of donation is always to help the needy, but the motive for a grant can be more specific to the agenda of the grant.
There are any campaigns arranged in which both donations and grants are provided. A person can donate without a campaign, but such campaigns are required for the grant.

References

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Chara Yadav

Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.