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'Prevenient grace' is a term coined by John Wesley in the 18th century. It simply means 'the grace that comes before', in reference to the grace of God which allows fallen humans to believe, or to the work of the Holy Spirit in an unbelievers life prior to salvation. The term is mostly encountered in discussions regarding Calvinism, Monolism, Arminianism, and other theories that deal with how salvation is offered. Both Calvinists and Arminians hold to prevenient grace. [http://www.patheos.com/blogs/rogereolson/2012/06/prevenient-grace-why-it-matters/ has a good article on this.] In fact, most Christians believe in prevenient grace. [If you are curious as to whether you believe in prevenient grace or not, ask yourself which of the two following statements you hold to: A. Fallen man could not respond to God in faith without God's grace that empowers or allows man to have faith (prevenient grace) B. Fallen man is capable of having faith by his own effort, without any need for any grace of God. ] Despite that prevenient grace is a more recent term, it is Biblical, as the revelation of God through Christ is a grace God gives to man [John 1:9.] Likewise, the promises of God are grace, and Christ drawing all men to Himself is a grace. The Holy Spirit, by grace, works in the lives of unbelievers to convict of sin, righteousness, and judgement [John 16:7-9.] All these graces are necessary, or else man would have nothing to have faith in and no way to be saved. Different theological schools of thought will teach differing 'types' of prevenient grace. Though the graces they view God as giving may differ, they all agree that grace is necessary. Here are some predominant theories: Arminianism: God gives universal grace so that all men, even those who have never heard the gospel, can desire to seek truth and seek God. He gives grace in the person of Christ, revealed to man, so that man might have faith. He gives grace in the call of the gospel to all who hear. He gives grace to allow those who hear to have the capacity to respond in faith. Weslyan: Like the Arminian, but also believes God gives grace in varying measures to unbelievers, hence some feel overwhelmed by God's grace and mercy the first time they hear the gospel, while others might take longer to respond in faith. Calvinism: God only grants those of His choosing the grace to have faith. This select grace is efficacious for all it is given to and is irresistible. Monalism: A round-about-theory that holds that God looked through countless possible futures to see what people 'would have done' if offered prevenient grace. He then picked the future where the most possible people would be saved. The Spirit gives grace, enough for belief, to all who hear the gospel. This grace can be rejected/resisted. Arminius: "“Free Will is unable to begin or to perfect any true and spiritual good, without Grace.... And I add to this, That teacher obtains my highest approbation who ascribes as much as possible to Divine Grace; provided he so pleads the cause of Grace, as not to inflict an injury on the Justice of God, and not to take away the free will to that which is evil." Prevenient grace is used in some other models as well, such as Keathly's theory of overcoming grace: http://evangelicalarminians.org/kenneth-keathley-and-the-doctrine-of-overcoming-grace/ In summary, while the specific type of prevenient grace one believes in may very, most Christians hold that there is at least some further grace necessary for a fallen human to believe in Jesus, and thus hold to the premise of prevenient grace.
Having read the two answers above, they both make sense and are, to my knowledge, Biblically truthful. In both however, I've seen no mention of God's mercy which comes _before grace and without which there would be no grace. Mercy is we humans _not getting what we deserve, punishment instead of forgiveness. Grace is God's free gift that we _couldn't earn and, preceding mercy and grace is God's love, the basis for His mercy and grace. Based on those truths, prevenient grace has always come before mankind's understanding of salvation because _God initiated salvation and only through Christ Jesus is grace possible at all. As Michael said in his answer, prevenient grace is a topic of theological discussions and I maintain it doesn't affect one's position in either salvation or condemnation since without God's mercy, no form of grace is possible. The Bible says in 2 Corinthians 5:14-15, 'For the love of Christ controls us, having concluded this, that One died for all, therefore all died; and He died for all, so that they who live might no longer live for themselves, but for Him who died and rose again on their behalf.' Everybody's sin is forgiven by Jesus' work on the cross but not everyone will believe and, those who don't believe are already condemned by their unbelief. The Lord knows everything and told us through His Word that He doesn't want any to perish, 2 Peter 3:9, but, He is aware that not everyone will come to salvation based on their ability to exercise free will to choose, which is why He included an explanation of predestination in the Bible, Ephesians 1:11. His grace, present before Creation, is surely prevenient since all mankind was sinful and condemned before any learned of the possibility of salvation through grace by faith, Ephesians 2:8-9.
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