How the federal government can reduce barriers to grants for small communities

How the federal government can reduce barriers to grants for small communities

The influx of federal funding due to the pandemic presents a tremendous opportunity for small communities across America. Since the onset of the COVID-19 pandemic, federal grants to state and local governments have increased by over 90%. Significant investments in pandemic recovery, infrastructure, and local services aim to lift communities of every size.

US Digital Response

2 min read

To better understand these grants and their challenges, U.S. Digital Response conducted a study with individuals representing over 350 local governments across the U.S. Three major themes emerged from the report, “No Front Door: Barriers to Access for Small Communities Seeking Federal Grants.”

Finding relevant opportunities is like searching for a needle in a haystack

"When I think of a true federal application, I think of throwing a tennis ball into an abyss, and then it might come back, or it might not come back. You don't really know." - Grant Technical Advisor.

Small communities need more dedicated staff to scan for grants constantly. Notices of funding opportunities (NOFOs) are lengthy, technical, and time-consuming to assess. Free search tools like USDR’s Federal Grant Finder help, but small communities still need help to navigate the maze of federal grants.

The application process is cumbersome, repetitive, and opaque

“I could spend my entire life applying for grants that we could make a legitimate claim to. And, you know, we've gone through the hassle fewer than five times.” - Director, Small Town Transportation Dept.

Each federal grant program requires complex, customized application packages. Small communities strain to collect materials and pull together competitive narratives. Communities invest significant time and get little feedback on unsuccessful applications to improve future chances.

Reporting and compliance burdens are overwhelming

"The entire federal grants system is stressful – I'm twirling my ring around and around my finger as I talk to you." - Grants Manager.

Small communities need more support for sub-recipient monitoring and federal compliance. Compliance activities like risk assessments and audits often require hiring expensive consultants.  Performance reporting across multiple federal grants strains local budgets.

Streamline your search for federal grants today

Learn how USDR's Federal Grant Finder saves your community time in finding relevant grants.


To truly level the playing field, we recommend overhauling the federal grants system with three guiding principles:

  • Clarify and Communicate: Create more robust interactions between federal program staff and grant seekers. Provide clear points of contact and give constructive feedback.
  • Right-Size and Rationalize: Establish tiered compliance regimes based on grant size and recipient capacity—fund intermediaries to assist small communities.
  • Simplify and Streamline: Develop a standard application system that pre-fills applicant data and contains modular components. Standardize reporting.

With thoughtful reforms centered on simplicity, clarity, and service delivery, we can ensure federal grants achieve their full potential for communities small and large. Let's work together to build a user-friendly grants system that leaves no community behind. The payoff will be generational investments in local priorities, from water systems to affordable housing.

About the author

US Digital Response

Content Writer

U.S. Digital Response (USDR) is a nonprofit, nonpartisan organization that helps governments, nonprofits, and public entities respond quickly to critical public needs.