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.

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.

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”

Open letter to the President and Congress

The Grant Doctors released an open letter to the President and Congress today regarding non-federal matching funds contributed to federal grant projects. Below is an excerpt from the letter:

The President’s 2018 “America First” Budget proposes to establish a 25 percent non-federal match for FEMA preparedness grants that currently has no match requirement.[1] This letter is to express our support for this proposal and to offer a suggestion.

We would like to see the non-federal match requirement expanded to all discretionary/competitive federal grants. We believe federally funded projects are more impactful when recipients leverage existing local and/or private resources. That is, every party to a project should have a financial stake in its success.

We propose an applicant’s non-federal match requirement should be based on its Metropolitan Statistical Area (MSA) population. This will result in at least three benefits: (1) greater non-federal commitments by urban applicants; (2) increased participation by applicants in rural, isolated and frontier/remote areas; and (3) improved geographic distribution of federal grants.

Download the complete Open letter to Congress (.pdf).

[1] https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blueprint.pdf, page 24.

Diversify your funding

Reliance on a single funding source can spell disaster for nonprofit organizations. A recent New York Times article perfectly illustrates this point. Popular programs one year can be cast aside the next. Politicians are fickle people; they want to fund their own pet projects, not the previous office holder’s projects.

We recommend nonprofits limit their federal funding to no more than one-third of revenues. Any more than one-third exposes organizations to unnecessary risk. If your organization is too reliant upon a single funding source, contact us and let us help you diversify.

Accepting new clients

The Grant Doctors is always looking for new client-partners. If your organization needs help applying for or managing federal grants, let us compete for your business. We have an extensive catalog of services to accommodate all needs and all budgets. We accept engagements of any duration: one hour (for technical assistance, document review, etc.); one project (applying for a grant, creating a sustainability plan, developing an indirect cost rate, fixing a grant management issue, staff training/coaching, etc.); one year (for ongoing assistance); or anything in-between. Visit our website to see all our services, then call or Email us for a price quote. We look forward to partnering with you!