Have you ever applied for a Federal grant, or worked for an organization that was funded by a Federal Grant? Here is how it works: First you must prove to the grantor that there is a need for the service you plan to provide with the grant monies. Next, you must describe how this service will be provided. This includes submitting a budget listing all the salaries of all the positions and justifying all expenses associated with the delivery of the service. This budget must be approved by the grantor (the Federal Government). If, in the opinion of the grantor, any salary or other expense is not justified, it may be disallowed. Then, in order to show that there is local support for your organization, a portion of the total budget must be raised locally. Yes, even though the Federal government is only funding part of the project, they make the decisions about how many employees and how much they may be paid, as well as any and all other expenses.

Should you get the grant monies, representatives of the government will visit your organization on a regular basis to observe the operations, and to make sure you are providing the services specified in your grant application. They also will audit your books, and may disallow any expenditures they deem unsuitable. Most of these grants are given to non-profit entities who provide services for altruistic or charitable purposes.

If these entities can meet the terms necessary to obtain Federal assistance, why is it that banks and other for-profit entities can ask for and expect to receive Federal bailout money, and yet be so indignant at the idea of being accountable to the government for how that money is spent, and how much employees are paid? In light of the fact that they have mismanaged their businesses into bankruptcy, one would think these executives would welcome some assistance in running their businesses.