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Every dollar spent in a research setting — lab supplies, equipment, staff salaries, and often stipends for student interns — tends to trace back to a grant.
A grant starts with a PI writing a detailed proposal explaining exactly what they want to study, why it matters, and how they'll spend the money, then submitting it to a funding agency (like the NIH or NSF in the U.S.), a private foundation, or occasionally a company.
These proposals go through competitive peer review, where other scientists in the field evaluate and score them, and acceptance rates are often in the single digits or low double digits. This is exactly why professors are almost constantly writing new proposals, even ones running well-established, productive labs.
Grants also usually cover more than just the visible research costs. A portion of most grants goes toward something called indirect costs (or overhead): money that goes to the university itself to cover facilities, utilities, and administrative support, rather than the specific experiment.
If you look closely at how researchers describe their funding, you'll also see specific grant types referenced by name. There are a few to note: an "R01" from the NIH, for example, is a well-known, prestigious type of individual research grant, while an "F31" or "F32" typically funds a specific graduate student or postdoc's training. Recognizing these terms can help you understand a lab's funding situation at a glance when you're researching potential mentors.
Grant funding also runs on cycles. Agencies like the NIH typically review proposals a few set times a year, and each institute publishes something called a payline, the score cutoff below which a proposal actually gets funded that cycle.
A well-reviewed proposal can still miss funding simply because the payline was especially tight that round, which is part of why even accomplished PIs sometimes have to resubmit a revised version of the same proposal more than once before it's funded. Grants are also awarded for a fixed period, often three to five years, meaning a lab's entire staff and research direction can shift noticeably once a major grant runs out and isn't immediately renewed.
This also explains something that confuses a lot of students: why some research programs are completely free — even stipend paid — while others charge a tuition-like fee to participate. This difference usually just comes down to whether the program is funded by a grant specifically earmarked for education and outreach, or whether it's running without that kind of dedicated funding and has to pass costs on to participants instead.
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