CHALLENGE AMERICA: Unallowable Activities/Costs

The activities and costs listed below are not allowable, and should not be included as part of your project or budget. This includes activities/costs covered by cost share/matching funds.

Unallowable Activities

  • General operating support.
  • Support for a full season of programming.
  • Direct grants to individuals.
  • Direct grants to individual elementary or secondary schools -- charter, private, or public -- directly. Schools may participate as partners in projects for which another eligible organization applies. Local education agencies, school districts, and state and regional education agencies are eligible. If a single school also is a local education agency, as is the case with some charter schools, the school may apply with documentation that supports its status as a local education agency.
  • Projects that replace arts instruction provided by an arts specialist.
  • Generally, courses/coursework in degree-granting institutions.
  • Literary publishing that does not focus on contemporary literature and/or writers.
  • Generally, publication of books, exhibition of works, or other projects by the applicant organization's board members, faculty, or trustees.
  • Generally, exhibitions of, and other projects that primarily involve, single, individually-owned, private collections.
  • Projects for which no curatorial, juried, or editorial judgement has been applied to the selection of artists or art works.
  • Social activities such as receptions, parties, galas, community dinners, picnics, and potlucks.
  • Costs of entertainment, including amusement, diversion, and social activities and any associated costs are unallowable; generally, this includes activities at venues such as bars, wineries, and breweries where the consumption of alcohol/social activity is the primary purpose of the venue.
  • Awards to individuals or organizations to honor or recognize achievement.
  • Commercial (for-profit) enterprises or activities, including arts markets, concessions, food, T-shirts, artwork, or other items for resale. This includes online or virtual sales/shops.
  • Lobbying, including activities intended to influence the outcome of elections or influence government officials regarding pending legislation, either directly or through specific lobbying appeals to the public.
  • Voter registration drives and related activities.
  • Construction, purchase, or renovation of facilities. (Design fees, preparing space for an exhibit, installation or de-installation of art, and community planning are allowable. However, no NEA or cost share/matching funds may be directed to the costs of physical construction or renovation or toward the purchase costs of facilities or land.)
  • Subgranting or regranting.

Certain Unallowable Costs

  • Cash reserves and endowments.
  • Costs for the creation of new organizations.
  • Costs to bring a project into compliance with federal grant requirements. This includes environmental or historical assessments or reviews and the hiring of individuals to write assessments or reviews or to otherwise comply with the National Environmental Policy Act and/or the National Historic Preservation Act.
  • Expenditures related to compensation to foreign nationals and/or travel to or from foreign countries when those expenditures are not in compliance with regulations issued by the U.S. Treasury Department Office of Foreign Assets Control. For further information, see or contact our Office of Grants Management at
  • Project costs supported by any other federal funding. This includes federal funding received either directly from a federal agency (e.g., National Endowment for the Humanities, Housing and Urban Development, National Science Foundation, or an entity that receives federal appropriations such as the Corporation for Public Broadcasting or Amtrak); or indirectly from a pass-through organization such as a state arts agency, regional arts organization, or a grant made to another entity.
  • Alcoholic beverages.
  • Purchase and/or use of gift cards and gift certificates to support project costs.
  • Gifts and prizes, including cash prizes as well as other items (e.g., electronic devices, gift certificates) with monetary value.
  • Stipends/fees to individuals who are incarcerated.
  • Contributions and donations to other entities, including donation drives.
  • General miscellaneous or contingency costs.
  • Fines and penalties, bad debt costs, deficit reduction.
  • Marketing expenses that are not directly related to the project.
  • Audit costs that are not directly related to a single audit (formerly known as an A-133 audit).
  • Rental costs for home office workspace owned by individuals or entities affiliated with the applicant organization.
  • The purchase of vehicles.
  • Visa costs paid to the U.S. government.
  • Costs incurred before the beginning or after the completion of the official period of performance.

All applicants should carefully review the Assurance of Compliance and Appendix A of our General Terms and Conditions (GTC) which detail other requirements that govern awards.