Grants-in-lieu (also called payments in lieu of taxes or PILTs) are voluntary or legislated payments from tax-exempt entities to municipalities, partially compensating for property taxes that would otherwise be paid. Universities, colleges, hospitals, and some non-profits may make grants-in-lieu recognizing that their properties use municipal services (roads, water, fire protection) despite tax exemption. Unlike formal payments in lieu of taxes from governments (which follow specific formulas), grants-in-lieu from private institutions are often negotiated arrangements. Amounts typically don't equal full property taxes but provide some revenue contribution. Municipalities near large exempt institutions—university towns, provincial capitals with government complexes—face particular fiscal challenges when significant assessment pays no taxes. Grants-in-lieu represent one mechanism to address this imbalance, though their voluntary nature and typically modest amounts leave many municipalities seeking better solutions for the exempt property issue.