The term “hard money” usually refers to one of two things. It can, first of all, be used for actual gold or silver coins, for example. Using this definition, we can say that a hard money policy is one in which the government recognizes currency which is based on an actual, fixed item which is considered valuable.
Hard money is also considered the opposite of fiat money, which is currency that takes its value from the government declaration or law which assigns the said value to it. As such, this kind of money is not inherently valuable, but may be used in transactions as long as it is said to be legal tender. The use of fiat money is now more common than the use of hard money, especially on an international level. The US dollar, for instance, is an example of a fiat currency.
On the other hand, hard money can also refer to funding received from a government or other entity. Rather than issuing the entire amount all at once, however, the government or organization releases the funding at regular intervals, thus providing a steady inflow of financial resources to the beneficiary.
Hard money is usually issued by the government for the advancement of certain projects or for the benefit of specific agencies. Community healthcare, for instance, may be supported by the government by providing hard money. Since funds are disbursed regularly and continuously, the offices in charge of such projects are able to achieve their objectives more effectively than if they had been issued one-time grants.