What characterizes a "categorical grant" in school finance?

A categorical grant in school finance is characterized by being designated for a specific purpose with restrictions. These grants are provided by the government or other funding entities and are often allocated to support specific programs, services, or projects, such as special education, after-school programs, or technology upgrades.

The restrictions attached to these grants ensure that the funds are used solely for the intended purpose, allowing policymakers to target funding towards priority areas and ensuring accountability in how the funds are utilized. This means that schools and districts must adhere to specified guidelines and reporting requirements when using these grants, which differs significantly from grants that allow for more discretionary spending.

This specificity helps to direct resources where they are most needed but also means that schools have less flexibility in how to allocate these funds compared to general or block grants, which could be spent at the school’s discretion.