Grant scams: red flags and how to verify a funder is real

Grant scams work because they tell people exactly what they want to hear: you've been selected, the money is waiting, and all you have to do is pay a small fee or confirm a few details. Individuals are the most common targets, but nonprofits get hit, too, especially new organizations eager for their first grant and small offices where one person handles everything.

The good news: almost every grant scam shares a few telltale signs. Once you know them, they're easy to spot.

The cardinal rule

Legitimate funders don't charge you to receive a grant. Not a processing fee, not a release fee, not a tax prepayment, not an insurance fee. The FTC puts it plainly: the government will never contact you to demand that you pay to get a grant. Grants.gov says the same: federal agencies don't charge fees.

If someone asks you to pay to receive grant money, it's a scam.

Red flags

1. You "won" or "qualified" for a grant you never applied for

Government agencies don't call, text, email, or message you on social media out of the blue to announce a grant. Grants.gov warns to be very wary of anyone claiming "you are eligible to receive a government grant" without an application, or that you won a grant in a drawing.

2. Upfront fees

Any request to pay a "processing," "release," "transfer," or "insurance" fee before you get the money is a scam. Grants.gov specifically flags "for a small fee, you can obtain a government grant."

3. Unusual payment methods

The FTC notes that scammers often ask for payment by gift card, cash reload card, wire transfer, or cryptocurrency. Legitimate organizations don't ask for these.

4. Requests for sensitive information

Scammers may ask for a Social Security number "to see if you qualify," then for bank account details. Don't give personal or organizational financial information to anyone who contacts you unsolicited.

5. Fake or official-sounding agencies

Scammers invent agency names that sound real. The FTC gives the example of the "Federal Grants Administration," which doesn't exist. They may also use real agency names and spoofed caller ID or fake phone numbers to look legitimate.

6. Grants with no strings attached

Real grants fund specific programs, projects, or purposes, and come with reporting. Grants.gov warns against claims that you can spend grant money however you wish. The FTC's March 2026 consumer alert also notes that government grants aren't issued to pay individuals' personal expenses, such as bills.

7. Pressure and secrecy

"Act today or lose the grant." "Don't tell anyone until the funds clear." Urgency and secrecy are classic manipulation tactics.

8. Guarantees

No legitimate grant writer, consultant, or database can guarantee you'll win a grant. Promises of "guaranteed funding" in exchange for a fee are a major warning sign.

Scams that target nonprofits specifically

Beyond the "you've won" calls, nonprofits run into a few specific schemes.

Fake foundation awards. An email announces that a foundation you've never heard of has selected your organization, then asks for a fee, bank details, or login information to "process" the award.

Paid SAM.gov registration. The General Services Administration has warned that registration in SAM.gov is always free, that the government will never ask you to pay to register, update, or renew, and that any email or website asking for money, no matter how official it looks, is not a government message or site. Some third-party companies charge for "help" while implying they're official. If you need help, contact the Federal Service Desk or a free local resource. See SAM.gov registration.

"Guaranteed grant" consultants. Someone offers to find and win grants for you for a large upfront fee, or for a percentage of the grant, with promises of guaranteed results. The ethics codes of both the Association of Fundraising Professionals and the Grant Professionals Association bar members from percentage-based compensation, and guarantees are impossible. See hiring a grant writer.

Grant "lists" for sale. Sellers market lists of "funders who give to organizations like yours," often scraped and outdated. They're not necessarily fraud, but they're rarely worth paying for. Free tools are better. See grant databases compared.

Phishing for accounts. Fake emails imitating Grants.gov, a foundation's grants portal, or a funder's program officer ask you to log in through a link. Always navigate to portals directly.

Payment diversion. A scammer impersonating a funder, vendor, or your own executive asks your finance staff to change bank details or send a payment urgently. Confirm any change in payment instructions by calling a known number.

Scams vs. legitimate paid services

Not everything that costs money is a scam. The line is whether you're paying for a real service on transparent terms, or paying to "receive" money you've been promised.

If you're an individual looking for help

Many people searching for "grants" are really looking for help with personal expenses such as rent, bills, or tuition. The FTC notes that government grants aren't issued for personal expenses, and points people to USA.gov's benefit finder (usa.gov/benefit-finder) to look for legitimate government benefits instead. For education costs, start with your school's financial aid office. Anyone offering a "personal grant" for a fee is running a scam.

How to verify a funder is legitimate

Use these checks before you share information or spend time on an opportunity from an unfamiliar source.

For private foundations and other nonprofits

1. Check the IRS Tax Exempt Organization Search (TEOS). Confirm the organization exists, is eligible to receive tax-deductible contributions, and hasn't had its exemption automatically revoked. TEOS also provides copies of filings and determination letters.
2. Read its Form 990-PF or 990. Use ProPublica's Nonprofit Explorer. A real grantmaking foundation will show assets and actual grants paid; for private foundations, those appear in Part XIV, line 3. See researching funders with 990s.
3. Compare details. Do the name, EIN, address, and officers in the message match the filings?
4. Check the website. Is there one? Does it match the filings? Look for a physical address and named staff or trustees.
5. Contact them independently. Use contact information you found yourself in the filings or on a site you navigated to directly, not the phone number or email in the message.

For government grants

1. Look it up on Grants.gov. Federal discretionary opportunities are posted there. If you can't find the opportunity, be suspicious.
2. Check the program on SAM.gov. Federal programs have Assistance Listings (formerly CFDA).
3. Contact the agency directly using contact information from its official .gov website.
4. Check the domain. Official federal sites end in .gov. Be wary of look-alike domains.

For any opportunity

• Ask: "Did I apply for this?" If not, assume it's a scam until proven otherwise.
• Search the funder's name plus "scam" or "complaint."
• Never pay to receive a grant.
• Never share bank account, Social Security, or login information with an unsolicited contact.

What to do if you're targeted

1. Stop. Don't pay, don't share information, and don't click links.
2. Report it. Report to the FTC at ReportFraud.ftc.gov, which shares reports with law enforcement partners. Grants.gov also lists the FTC's phone line (1-877-FTC-HELP) and the HHS fraud hotline (1-800-447-8477).
3. If you paid or shared information, contact your bank immediately, change compromised passwords, and consider contacting your state attorney general.
4. Warn others. Tell your board, staff, and peer organizations. Scammers often target many organizations in the same area.
5. If the scam impersonated a real funder, let that funder know through its official contact channels.

Build scam resistance into your organization

• Write a simple rule: No one pays money or shares bank information to receive a grant, ever.
• Require two-person verification for any change to payment instructions.
• Train staff and volunteers on the red flags above.
• Keep a short list of real funders with verified contact information, so anything outside that list gets extra scrutiny.
• Use official portals by navigating to them directly, not through email links.

A one-minute verification checklist

Before you respond to any unexpected grant offer, run through these five questions:

1. Did we apply for this?
2. Can I find this funder in the IRS Tax Exempt Organization Search, or this opportunity on Grants.gov or an official .gov site?
3. Do its filings show real grants paid to organizations like ours?
4. Does the message ask for money, bank details, Social Security numbers, or logins?
5. Have I confirmed it by contacting the funder through information I found myself?

If the answer to question 4 is yes, or you can't answer yes to the others, stop and treat it as a scam until proven otherwise.

Bottom line

Real grants require an application, fund a specific purpose, and never cost you a fee to receive. If an offer arrives unsolicited, asks for money or sensitive information, or pressures you to act fast, walk away and verify independently. When you're ready to find legitimate funders, start with our grant prospecting guide.