A practical guide to pass-through grants, how federal funding flows through states, cities, and intermediaries to local organizations, and how to access the right door.

Most nonprofits that say “we got a federal grant” actually got something a little different: a pass-through grant, federal money that flowed through a state agency, a city, a Continuum of Care, a school district, or an intermediary, and reached them as a sub-award.

Understanding pass-through funding changes everything about how you find and apply for federal money. The right doorway often isn’t grants.gov, it’s your state department of health, your city’s community-development office, or your local workforce board. Miss the doorway and you miss the funding entirely.

This guide explains how pass-through grants work and how to navigate them.

TL;DR: Quick Answers

What’s a pass-through grant? Federal funding awarded to a state, city, county, intermediary, or other “prime” recipient that then sub-awards a portion to nonprofits and other community organizations.
Why does it exist? Federal programs often distribute funds through states or localities for efficiency, local knowledge, and regional control.
Who’s the “pass-through entity”? The state agency, city, county, public housing authority, Continuum of Care, education agency, or intermediary that received the federal funding and re-grants it.
What changes for the applicant? You apply to the pass-through entity, not directly to the federal government, on its timeline and rules, with federal compliance still applying.

How Pass-Through Funding Works

Many of the largest federal grant programs are deliberately distributed through intermediaries. The federal agency funds a state or locality (the prime recipient or pass-through entity), which then funds local organizations (the subrecipients) according to a sub-award process.

This isn’t the exception, it’s the default. According to the Congressional Research Service, most federal prime awards go first to state governments, which then pass the funds down as subawards to local entities. That reliance runs deep: roughly a third of state revenue and about a tenth of local revenue comes from federal sources (Urban Institute). When you understand this flow, it’s clear why so much “federal” money for nonprofits is actually reached through a state or local doorway.

Common pass-through arrangements:

State public-health departments receive CDC and HRSA funding and sub-grant to local providers.
State behavioral-health agencies receive SAMHSA block grants and sub-grant to community providers.
State workforce agencies and local Workforce Development Boards receive DOL WIOA funding and sub-grant.
Cities and counties receive HUD CDBG, HOME, and ESG funding and sub-grant locally.
Continuums of Care receive HUD CoC funding and sub-grant homelessness services.
State Service Commissions receive AmeriCorps State funding and sub-grant.
State arts and humanities councils receive NEA and NEH partnership funding and re-grant.
State Departments of Education and Districts distribute much of the Department of Education’s funding.
Intermediary nonprofits (like HUD Section 4 intermediaries) re-grant federal capacity funding.

Why It Matters for Applicants

Three practical consequences of pass-through structure:

1. The doorway is local, not federal. You apply to the state, city, or intermediary, not to the federal agency. The federal NOFO may not even be the right place to look; the state’s RFP is.

2. Multiple pass-throughs may exist for one federal program. CDBG, for example, flows through every entitlement city and state, dozens of different doorways with their own timelines and priorities.

3. Federal compliance still applies. Even as a subrecipient, you’re bound by federal rules, audit requirements (Single Audit), allowable-cost rules, performance reporting, and more. The pass-through entity is responsible for ensuring you comply, and increasingly demands robust systems.

How to Find Pass-Through Opportunities

Identify the pass-through entity for the federal program you care about. For CDBG/HOME/ESG, that’s your city or county. For SAMHSA block grants, your state behavioral-health agency. For WIOA, your local Workforce Development Board.
Subscribe to their notices. Pass-through RFPs are often posted on the state/local agency’s website, not grants.gov.
Build relationships with pass-through staff. Sub-award decisions are often shaped by ongoing relationships and local plans.
Watch for state plans. Many federal programs require pass-through entities to publish state plans (e.g., Consolidated Plans for HUD funds) that telegraph upcoming sub-award priorities.

How to Win a Pass-Through Sub-Award

Sub-award proposals look similar to other grant proposals but with a few wrinkles:

1. Align with the pass-through entity’s plan. Strong proposals demonstrate alignment with the state plan, Consolidated Plan, or local strategy that drives the funding.

2. Demonstrate compliance capacity. Pass-through entities are accountable to the feds for your performance. Show your financial systems, audit history, and reporting capacity.

3. Build local partnerships. Sub-award funders favor applicants embedded in the local system, see letters of support.

4. Read the local RFP carefully. Many pass-throughs adapt federal requirements; the local RFP has the specific rules, see how to read a grant RFP.

5. Plan for slower payment. Sub-awards often reimburse rather than advance, plan cash flow accordingly.

Where Pass-Through Funding Fits in Your Strategy

For many community-based nonprofits, most “federal” funding arrives as pass-through. Your 12-month grant strategy should explicitly include the relevant state, local, and intermediary doorways for the federal programs you care about, not just direct federal competitions.

Pair pass-through opportunities with direct federal grants (where you qualify) and foundation, community foundation, and corporate funding for a balanced mix.

How Grantboost Helps

The pass-through landscape is complicated, dozens of state and local doorways across hundreds of federal programs. Grantboost scans funding sources continuously and surfaces opportunities across federal, state, local, and intermediary funders, so the right doorway, direct federal or pass-through, appears alongside your other prospects in one pipeline.

Drafts come back in your organization’s voice (see training AI on your past proposals), structured around each funder’s specific terms.

Try Grantboost free and find every federal doorway, direct or pass-through.

Pass-Through Grants Explained: How Federal Money Reaches Local Nonprofits