Block grants are funds provided by the federal government to state or local governments for broad purposes, allowing them flexibility in how to use the money. Unlike categorical grants, which are designated for specific programs, block grants can be allocated to various areas such as education, healthcare, or community development, depending on local needs. These grants are typically awarded based on a formula that considers factors like population size or economic conditions. This approach enables governments to tailor their spending to address unique challenges within their communities, promoting more efficient use of resources and fostering local decision-making.