The Sovereign Grant is a funding mechanism used by the British Royal Family to support official duties and activities. It is derived from the profits generated by the Crown Estate, a collection of lands and assets owned by the monarchy. The grant is typically set at a percentage of these profits, ensuring that the royal family has a stable source of income. This funding is used for various expenses, including staff salaries, travel, and maintenance of royal residences. The Sovereign Grant promotes transparency, as it is subject to annual audits and reports, allowing the public to see how the funds are utilized.