A social distinction, such as economic deprivation, is often used as a criterion for student assignment into these various programs. The funding and uses for the funding are specifically set by the funding agency. Although KERA combined most funding sources to schools through SEEK, several strands of KERA are funded through grants. The department of education retains a percentage of the legislative funding of most categorical programs for the department's use. Some of the money retained is for priority programs of the department and the department, awards grants to districts as pilot programs.
Many corporations provide grants to schools and school districts.
Most are highly competitive and how the grant is written is very important. The Kentucky Department of Education initiated a consolidated planning process for federal and state grants during the 1997-98 school year. However, the Kentucky Department of Education highly encourages its use. Schools falling below their assistance line are required to have a consolidated plan. Consolidated planning lumps federal and state grants into one grant proposal.