Public Funds: Definition, Restrictions & Examples

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  • 0:00 A First Look at Public Funding
  • 0:36 Foundation Definition
  • 1:25 Examples
  • 2:52 Restrictions
  • 4:57 Lesson Summary
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Lesson Transcript
Instructor: Brianna Whiting

Brianna has a masters of education in educational leadership, a DBA business management, and a BS in animal science.

While it is never fun to pay taxes, our taxes go to helping improve the communities we live in. In this lesson we will learn about public funds and how they are used. We will also learn about some restrictions so that our money goes to good use.

A First Look at Public Funding

Many of us either look forward to or dread tax season. Sometimes we get a refund, and sometimes we have to pay additional taxes. While having to pay can be disappointing, it may be helpful to understand where our money goes. Why do we have to pay taxes? What does the state or federal government do with our money? In this lesson, we're going to follow along with Chase, who just got a job working for the treasury and is learning all about his new role. Particularly, we're going to learn about public funding, and how tax money is often spent.

Foundation Definition

Before Chase can understand his roles in his new position, he needs to understand what public funding is. Public funding is money that comes from the government, often through taxes, that's used to help the public through goods and services. The funds are gathered and distributed on different levels such as the federal level, state level, and even local level. While taxes are a primary resource, funding can also come from fines and fees. Public funding helps provide health programs, community services, restoration programs, public service programs, and even environmental programs. These programs benefit the members of the community in which the funds are used. So, Chase learns that when taxpayers pay taxes, the government uses that money to help maintain and improve communities through programs and services.


So what are some examples of public funding? Chase knows where the money often comes from for public funding, but specifically, he wants to learn what types of programs and services are supported with these funds. Let's take a look at a few examples:

Food programs, such as food stamps and the Women, Infants, and Children (WIC) program help community members with limited incomes purchase food. School programs are another example. Some funding helps provide breakfast and lunch for kids in need. Funding is also used to pay teachers, and build and improve school facilities. Public funding is also used for children's programs, including foster care, child care, head start and other programs that offer support for children. Those using this funding may need a place to live, a place to go while their parents work, and/or help with education. Another important service is helping to provide health insurance for children. Additionally, a vital piece to all communities is public safety. Public funding is used to financially support fire departments, the police, and EMTs. The money is also used to protect the country as a whole. Public funding pays for the military and rescue organizations that help in the event of a disaster, like FEMA.

In addition to these examples, Chase also learned that disability programs, senior citizens programs, and services that provide support to people living in rural areas are other examples of ways public funding is used.


Chase now understands how public funds are used, but one question still remains: are there any restrictions to how public funding can be spent? There are some important restrictions on the use of public funding.

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