Government contracts and grants use federal or state tax dollars to contract with an agency to provide services. The difference between government contracts and grants is that a contract is a legally binding document in which the parties make promises to deliver a product or service in exchange for funding; a grant is when one party grants funds to another party to do something, in reasonable hopes that the task can be accomplished. Contracts are usually made for services that have been tested and shown to work, while grants are usually reserved for research into what might work.

Government funding usually comes from one of four sources – federal direct, federal “pass-through”, state, and local. Historically, federal direct funding has been the most fruitful for syringe access programs. Due to the federal ban on direct funding for syringe access, those dollars have usually been for adjunct services or, in the case of federal grants, research. So-called “pass through” funding is federal funding that is first given to state agencies. This has often meant that even if pass-through dollars could have been used for harm reduction, states with legislatures hostile to harm reduction may have not allocated them to harm reduction.

Federal funding has primarily come to harm reduction through departments concerned with public or behavioral health. These departments include the Centers for Disease Control and Prevention (CDC), Substance Abuse and Mental Health Services Administration (SAMHSA), Health Resources and Services Administration (HRSA), and National Institute of Drug Abuse (NIDA).

State funding has come primarily through departments of public or behavioral health, particularly branches tied to infectious disease control.

Local government funding, especially in larger cities or those open to harm reduction, has also helped fund harm reduction organizations and SSPs.