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Are You Chasing Funding Dollars?
Thursday, December 14, 2006
Contributed by Rebecca Shawver
Have you ever noticed that some agencies offer programs that just don’t seem quite appropriate given their mission statements? If so, you’ve probably also wondered why the administrators and governing boards of these agencies allowed such diversions from their primary goals.
Unfortunately, you have most likely observed a common mistake that befalls many non-profit agencies that decide to chase funding dollars offered by well-meaning foundations and government agencies seeking to encourage pre-selected program strategies.
Sadly, many of these agencies come to realize too late that chasing funds is not always beneficial to their bottom line and can actually be a detriment to their long-term financial stability.
How Does It Happen?
As grant writers are well aware, foundations, corporations and government agencies invest in community programs. Whether they provided financial assistance for the establishment of best practices, research efforts, demonstration projects, replication efforts, or ongoing program implementations, funders are in the business to “buy” pre-selected and specific services. In truth, funders of all types advertise their desire to “purchase” (through their financial support) services through their published RFPs, guidelines, and applications. They clearly delineate the preferred program components, characteristics, and criteria in which they are interested; and with the best of intentions, funding agencies seek out the most qualified non-profit agencies to do their work in communities throughout the nation.
Unfortunately, when societal changes foster new programmatic strategies that funders seek to encourage, non-profit agencies are often tempted to travel down new funding paths by offering programs that may not be part of their established strategic plans. Hoping to bolster sagging budgets and expand their presence in the community, many non-profit administrators and boards hurriedly seek to get their share of available new dollars. They fail to consider the possibility that adding new programs that don’t address their primary agency goals can (and often do) have negative ramifications. Not all funding dollars are worth the associated risks.
Choices, Choices and More Choices
Rather than immediately jump on the proverbial bandwagon and run to the bank to cash the check, administrators should take a step back to consider the choices before them. There are several routes from which to choose: (1) Agencies can choose to apply for the available funds; (2) They can step back and wait for the next funding cycle while they consider the ramifications of providing the proposed services; or (3) They can simply acknowledge that while the funds are tempting, it is not the right decision for their agency.
What Harm Could Come From Pursuing the New Funds?
Choosing to pursue funding dollars simply because they are readily available is more often than not a poor business decision. During the mid-1990s, I personally witnessed several social service and neighborhood-based organizations suffer the consequences of doing just this. In their rush to secure a share of new welfare-to-work dollars, their administrators chose to offer services for which their agencies and staffs were poorly prepared. With so many local, state and federal funders begging for new initiatives to be undertaken to address changes in welfare regulations, many of the agencies gave little thought to the long-term ramifications of beginning new job training and employment placement services.
With little or no experience in helping former welfare recipients and other at-risk populations in securing living wage jobs, social workers were expected to become proficient employment counselors overnight. Because the new funds were performance-based (versus expense reimbursement), agencies soon found that only after achieving promised outcomes were they going to be awarded cash payments.
While some of social service agencies easily made the transition into performance-based employment initiatives, most did not. Within six months, the majority of the agencies I interacted with were struggling financially to adjust to outcome-based contracts that required their staff to become employment coaches. Rather than assisting clients with daily living skills, mental health issues, family problems, and late utility payments, social workers found themselves struggling alongside their clients as they jointly dealt with job applications, interviews, and future employer demands.
Sadly, some of these agencies lost tens of thousands of their cash reserves – money that had once protected them against lean times was disappearing because they had taken the wrong funding route. They found themselves chasing elusive reimbursement payments because their staffs were simply not prepared to become employment counselors. They couldn’t produce the promised outcomes.
How Should An Agency Decide Which Route To Take?
Prior to deciding to apply for grant funds, administrators should ask themselves, their governing boards and their staff members the following questions:
Mission - Is this new opportunity within the scope of the agency’s stated mission?
Strategic Plan - Are the proposed program services in keeping with our current strategic plan? Will it help to better meet a stated priority need of the community?
Clientele - Will the services meet the needs of our current target populations? If not, do we want to serve a new classification of clients?
Staff - Are the staff members qualified and prepared to provide these services? If not, how much will it cost to retrain current staff or to hire new staff? How long will this take? Could staff morale seriously suffer if they are unable to meet new performance demands?
Finances - If the agency does not successfully meet the performance-based outcomes, how long can it financially risk non-reimbursement of its operational costs?
If the answer to any of these questions is no, administrators should seriously consider declining to apply for the funds. While new opportunities may seem to promise quick fixes to budgetary woes, over the long-term they simply can be the wrong route to take on the road to financial security.
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Becki is at work on her forthcoming CharityChannel Press book, Welcome to Grantwriting: What Every Beginning Grantwriter Needs to Know to Get Started,
due in early 2012. She also serves as editor of CharityChannel's Grants and Foundations Review