Please note: Merchant Maverick is not a law firm, and its employees are not lawyers. The information provided below is solely for educational purposes. If you need legal advice, please consult with a practicing attorney.
The first important thing you should know is that a grant is not a contract. That means a grant is not legally binding. Grants are asked for and given in the hope and anticipation of specific projects being completed and the accompanying goals met. Let’s say that you gave it a go, but for whatever reason, either you weren’t able to carry through with the project, or your stated goals weren’t met. While it might make the grantmaker hesitant to work with you in the future, they cannot sue you in civil court for breach of contract. If you make no effort to work on the proposed project, the grantmaker could ask for the funds to be returned to them. Even then, though, they cannot sue you for breach of contract.
Because grants are not legally binding, they have more flexibility than contracts do. If you get into your project and find that you need to adjust your scope, budget, or outcomes, let us know what’s going on, and we’ll work with you.
The second important thing to be aware of is the various forms of grant fraud because these are the things that will get you into trouble. Grant fraud typically takes one or more of the following forms:
- Embezzlement/Theft: Keeping the money for yourself instead of for the business.
- Bribery: Using the money to get somebody to do a favor for you.
- False Statements: If you deliberately lie about something. (For example, you say in your proposal that you’re a business owner, but you’re not.)
- False Claims: Billing for a service that either you didn’t provide or that you submit to multiple sources for payment (that last part is called double-dipping).
- Mail/Wire Fraud: Mail fraud is using the US Postal Service or a private or commercial interstate carrier (e.g., FedEx or UPS) to commit one of the fraudulent acts listed above. Wire fraud is using electronic transmission methods (via a phone call, fax, email, text, or social media) for the same reason. These are the big ones that can get you into a lot of hot water with the federal government.