Recoverable grant defined

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A recoverable grant is a financial grant to a for-profit or nonprofit entity where all or part is returned (or directed elsewhere) if certain financial or impact milestones that support the grant’s charitable purposes are achieved. 

For tax and accounting purposes, recoverable grants are most commonly treated as grants by both the grantor and the grantee.*

*In uncommon circumstances, a recoverable grant may be treated as an accounting liability for grantees.