Federal grant news

President Trump recently signed into law the American Law Enforcement Heroes Act of 2017 (S. 583). A couple media outlets (CBS and Fox) reported the legislation “approves federal grants” to help veterans get priority in hiring and training for law enforcement jobs. Fact check: partially true.

The new law does not create a new grant program or provide new funding to law enforcement agencies for this purpose. The law simply modifies the existing Community Oriented Policing Services (COPS) grant program. COPS Grantees are now allowed to prioritize the hiring and training of veterans with their grant funds. Read the legislation’s text here (.pdf)

Contact us with any questions about federal grants. thegrantdoctors.com

How to calculate matching funds for federal grants

When organizations think of matching funds, it’s a relatively simple calculation: multiply the amount of the grant by the required match percentage and, voila, you know the dollar amount needed. (e.g, a $200,000 grant with a 50% match requirement means $100,000 (cash or in-kind) is needed for match.)

Uncle Sam takes a different approach that often leaves new federal grant seekers scratching their heads.

Federal awarding agencies determine match amounts based on a project’s “total cost,” not the grant amount. The total cost is the sum of the federal grant amount plus the matching funds provided by the grant recipient. Therefore, if your total project cost is $400,000 and a grant has a 20% match requirement, the maximum federal award can be $320,000; and the applicant needs to provide $80,000 in matching funds.

Side note: It’s similar to home buyers working with lenders that have an 80/20 loan-to-value requirement. The lender puts up 80% and the home buyer covers the difference. Using the $400,000 example above, replace “total project cost” with “new home value,” “federal award” with “mortgage” and “matching funds” with “buyer’s equity.”

Several awarding agencies now provide match calculation examples in their funding opportunity notices. The example below is from a Department of Justice grant with a 25% match requirement.

  • Step 1: Take the amount of grant funds you are requesting and divide it by 0.75. This will give you your total project cost. Example: $200,000 (grant amount) ÷ 0.75 (percentage for use of grant funds) = $266,667 (total project cost).
  • Step 2: Subtract the amount of grant funds you are requesting from your total project cost. This will give you your matching funds requirement. Example: $266,667 (total project cost) − $200,000 (grant amount) = $66,667 (matching funds requirement).
  • Step 3: A quick way to double check that you have the correct amount of matching funds is to take your total project cost and multiply it by 0.25. Example: $266,667 (total project cost) × 0.25 (maximum percentage of matching funds requirement) = $66,667 (matching funds requirement).

Another method is to build your budget based on your program’s objectives regardless of funding sources. That is, what would your program look like in an ideal world (e.g., staffing, supplies, equipment, consultants/vendors, etc.) to achieve your goals? If the amount is, for example, $300,000 per year and a federal grant has a 25% match requirement, your organization will need to cover $75,000 of the cost while the grant can fund the $225,000 difference.

Both calculations get you to the same place. I prefer the latter method. It requires organizations to look at their programs in terms of goals, objectives and outcomes—big picture stuff—rather than “how much (people or things) can we get for the maximum grant amount?” The fed’s formula is specific to each funding program (for obvious reasons) but it tends to put grant seekers in a chasing-the-dollars mindset. For long-term sustainability, organizations need to think strategically about the funding they pursue. Another topic for another time.

Shoot us a message if you have any questions about federal grants and matching funds. We’re here to help.

Monday tip: online security

Add two-factor authentication (2FA) to your Facebook account (and, ideally, all your online accounts). While traveling last week, I received two unexpected “security code” text messages from Facebook. Someone was attempting to hack my account. By receiving the security codes, it was clear the hacker had my password and was one step away from accessing my account. It takes a little effort to set up 2FA but, I believe, it’s worth the time. And, be sure to use a strong password featuring a jumble of letters, numbers and special characters. I thought the password I was using was strong enough–apparently not. I now use a password manager app to create all my passwords.

How do you keep your online accounts secure?

Have a great week!

Sustainability planning: the missing link

Grant-funded initiatives rarely last forever. Sustaining programs is a challenge for even the most successful organizations. The big mystery is how to keep the momentum rolling after initial funding expires. And, what should sustainability look like? Does it mean continuing a program at 100% strength or can it be downsized to a point where existing funds and other sources of revenue can support it? Planning teams get so caught up with designing effective programs, they often overlook the sustainability issue. It’s not their fault. Tight grant deadlines don’t always afford people the luxury to forecast future revenues and demand for services. In the end, “we’ll apply for another grant” becomes the unwritten strategy.

So what are the keys to sustainability?

  1. Funding assessment. What funding do you currently have available that could be redirected to supporting your new program after other funding expires? Everything should be on the table—including scaling back an existing program if the new program proves more successful/effective.
  2. Blended funding. Don’t launch new programs with a single funding source. Ideally, use two or three funding streams. If/when one source drops off, the program won’t be as severely impacted. Also, providing matching funds makes for a stronger proposal.
  3. Scalability. Design your programs so they can be easily expanded and contracted based on available funding and demand.
  4. Income generation. Explore ways your program could generate revenue to offset some costs.
  5. New frontiers. Keep your eyes and ears open for new funding opportunities and new ways to partner with other organizations. Network. Network. Network!

Do you need a sustainability plan? Reach out to us. We’re ready to help.

Case study: Misspent funds

The stability (or at least reasonable predictability) that annual funding allocations provide is a wonderful thing. On the flip side, when funding becomes routine (i.e., taken for granted), oversight can become lax and questionable expenses can slip through the cracks. Read our latest case study to see how we helped a large public school district improve their purchasing monitoring and approval process.

Download the case study (.pdf).

Tip: Don’t add ongoing expenses to one-time funds

Thank you, Captain Obvious. This might sound like common sense advice but you would be surprised how often organizations receive a large sum of one-time funding and load it up with expenses that will outlive the money. Full-time personnel, cell phones and equipment requiring ongoing maintenance are just a few examples of expenses that can put your budget in a pinch once the funding runs out.

One-time funds are better suited for staff professional development, hosting a conference/workshop/symposium, preparing communications materials, working on policy papers, replacing program supplies and replacing obsolete technology. There will always be a temptation to hire that full-time position you need and to worry about the funding down the road; that doesn’t always work out. If the position is truly critical, find a stable source of funding at the outset.

Need help with your budgets? Reach out to us. We’re ready to assist.

Commentary: Big Bird has the upper hand on Trump

The White House released the President’s 2018 budget in March and, predictably, it proposes to eliminate funding for the Corporation for Public Broadcasting (CPB). Headlines such as “Big Bird on the Chopping Block” and “The End of Big Bird?” dominated media outlets. Could Sesame Street disappear if the CPB loses federal funding? Supporters claim any cuts will harm children through the loss of educational programming. Opponents point to the nation’s $20 trillion dollar debt and say cuts need to be made everywhere (and, in some circles, because Big Bird is a commie propaganda tool). They’re both wrong. Let’s dig into the numbers.

Sesame Workshop, the nonprofit corporation that owns Sesame Street, solved the age-old problem of sustainability. From its modest beginnings in the late-1960s—through grants from the U.S. Department of Education and the Ford and Carnegie foundations—Sesame Street has grown into a global brand with annual revenues exceeding $100 million according to the company’s audited financial reports.[1] Recent IRS tax filings show that federal grants account for no more than four percent of revenues.[2]

IRS filings also reveal generous compensation packages earned by its top executives. In 2014, Sesame Workshop’s former CEO earned more than $586,000, in salary and benefits, for the nine months leading up to his retirement (the previous year, he earned $672,000). Ten other key employees earned an average $382,000 in annual compensation. Sesame Workshop’s lead writer pulled down an impressive $597,000 salary in 2014.2,[3]

Sesame Workshop clearly does not need government grants to stay afloat. In fact, the money it currently receives isn’t used to produce domestic Sesame Street episodes (more on this later). Any financial issues Sesame Workshop has in the future won’t be due to federal funding cuts.

Continue reading “Commentary: Big Bird has the upper hand on Trump”