What is a sum of money given by a government or organization for a specific purpose that usually does not need to be repaid?

• A. Loan
• B. Grant
• C. Rebate
• D. Endowment

Answer: (B)

A sum of money given by a government or organization for a specific purpose that usually does not need to be repaid is referred to as a grant. Grants are financial contributions provided to support specific projects or initiatives, often in areas such as education, research, community development, or public health. Unlike loans, which require repayment with interest, grants are essentially gifts that help individuals or organizations achieve particular objectives without the burden of repayment. This makes grants an essential resource for non-profits, students, and researchers, allowing them to focus on their purposes without financial strain.

The other options represent different financial concepts. A loan involves borrowing money that must be repaid, typically with added interest. A rebate is a return of a portion of a payment or reduction in price, not a direct financial gift. An endowment refers to a large sum of money donated to an institution, where the principal amount remains intact, and only the income generated is used for specific purposes. Each alternative plays a different role in financing, highlighting the unique nature of grants as non-repayable funds for targeted uses.