the difference between a grant, a subsidy and an allowance

인 생 공 부/짧은 지식들

the difference between a grant, a subsidy and an allowance

꼬냥이☆ 2011. 10. 17. 17:40

Grants are cash support, generally for research and research-related activities in a particular subject area or field. However they can also be for a singular purposes that supports government or benevolent interests of private and public organizations. Diversity program and business start up grants are a great example.

Subsidies are financial support given by government agencies which may include grants, but more often, take the place of underwriting and guaranteeing fees and expenses. For example: In public transportation, rail transportation is not considered profitable at a price that would attract ridership. As a result, our government provides a subsidy to rail operations in order to allow them to charge a price that will attract ridership. The subsidy takes the form of paying the difference between the price charged per ride and the marginal profit point. So where a 25 dollar ticket is profitable, but ridership is low, the train may charge 10 dollars, and the government 15. The quarterly or end of year ridership determines the payments to be received. Subsidies to guarantee profit levels are also provided to Farmers, and other commodity producers.

An allowance is a sum of money set aside for future needs, which may or may not occur. For example, an organization may provide or receive a transportation allowance of a certain dollar value pear quarter or year. Money not spent is sometimes rolled forward to reduce the next allowance, or is use or loose.