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Guest Post: Inside the Sausage Factory and how the RFP Process leads to Confused Grant Writers

Today’s guest post comes from an email sent by someone with broad experience in the grant world who prefers to remain anonymous—like many of our correspondents. In this respect we’re a bit like CIA officers running spy networks; unlike CIA agents, however, we have never been offered a “honey trap.”  Our guest writer is speculating about one RFP, which has to remain nameless, and how it demonstrates the way the drafting process used to construct RFPs can contribute to an unpalatable final product.

Grant writers, like lawyers, must be able to understand writing that simultaneously tries to eliminate ambiguity while conveying all the information necessary for an applicant to understand the program. These conflicting forces can cause the problems described here and elsewhere.

Here’s what I think about how one RFP was constructed.

I know the Director of the agency in question personally. He is knowledgeable and brilliant in many ways, but not terribly good at verbal communication. He states what he wants somewhat awkwardly, even when he’s totally right. The process starts with him. He calls in his assistant, or whoever is in charge of putting an RFP together, and tells her what he wants. She gets most of it right and converts it into RFP legal-sounding gobbledegook. He can read RFP legal sounding gobbledegook, so he passes on it, probably more quickly than he should because he has a lot on his plate.

What she writes then gets passed along to various branch administrators for their comments and suggestions. They think about legal stuff and mostly about details that have to be completed if the contractor will be acceptable. They include things that are not relevant to the actual work but which make their effort to judge the proposal easier…like being sure that the contractor puts tabs on each section (numbered 1.1.1, 1.1.2, etc.) and having the contractor sign a form indicating that his company has the proper insurance and that it lists its overhead rates. Since travel expense is involved, they have the contractor price the trips but are careful not to explain what the state’s car mileage rates are or what is allowed for hotels and meals. Let them try to guess, or plow through the state rates, if they exist, on the Internet. Throw in some language that says that each 1.1.2 section etc. is totally self contained.

That is, forbid the contractor from saying things like “see section 1.1.1 for this information.” [Jake’s note: see my advice in Further Information Regarding the Department of Redundancy Department.] And give them firm warnings or threats. Say that otherwise the proposal will be disqualified. Include expressions like “submit one original and four copies” even though all copies look (and are) original in the electronic world. For the deadline, put in that the proposal has to be “on the desk of X person by 2 p.m. May 15th” but give only a post office box as the address, making the contractor hope that the people at the PO box will be able to find X person’s desk on time.

And don’t give even a small hint about how much money is allowed for the proposal. Make them guess how much we have available. The most frustrating part is that the RFP doesn’t say how the computer generated paragraphs which are assembled into letters will get rewritten. Having already gone through this with another agency, we know what a huge task this is. We can say what’s wrong with a sample of the paragraphs and letters but our hands are tied about how they get revised and assembled.

The Director wants to have his staff be able to rewrite the computer generated letters we are to assess so he tells his assistant as much. She may not be used to this approach so she writes stuff that is rather unclear about what they want. Are we to do any teaching to accomplish this? I guess not, since we think the RFP says our work is to train the trainers how to teach the staff to write clearly, but it is not all that clear who we are to train.

Experience tells us that the folks there need more than a little information if they are to revise their current training programs. The training materials we’ve seen deal mostly with grammar and usage but we know they need much, much more. We have to hope that the examples we provide will be able to be translated into teaching materials. It would be easier to do the training ourselves but we apparently won’t be allowed to do this.

We conclude that the best we can do is to outline the kinds of problems extant paragraphs and letters contain, then construct a process for their ultimate revision by someone unknown to us, who then assembles them into actual letters. We are to help prepare such people, not knowing exactly who we’re to help. So we’ll build an outline about what the department might do, if it has staff and technical capability to do it.

There’s more, of course, but that should exemplify our frustration a bit. So we propose, duck, and hope for the best. Maybe the best would be that they reject our proposal. That would be okay with us. But we sincerely want to help the Director and help our state as well.

Isaac has experienced similar processes in working for and talking to agencies/organizations that issue RFPs. This death-by-committee effect isn’t unique to grant writing, but the combination of fear, pompousness, uncertainty, certitude and the like seems to lead to the production of especially unpalatable RFPs, and the nature of bureaucracies make potential reforms difficult to implement. In addition, RFP writers seldom have to respond to the RFPs they produce, or any other RFPs for that matter, and thus don’t understand the kinds of problems we describe. In the fifteen years Seliger + Associates has been in business, we’ve written numerous proposals across a broad array of subjects and have never been contacted by an issuing organization to ask how their RFPs might be improved. They don’t have to, of course, since as noted in “Foundations and the Future” and “Studio Executives, Starlets, and Funding,” he who has the gold makes the rules.

“Too many cooks spoil the broth,” as the cliché goes. Writing done by committee usually comes out about as well as mass-produced food: serviceable at best, with the character of no character, and more commonly inedible. As the grant writer, it’s your job to deal with this output as best you can, and if you understand why RFPs are so hard to read and filled with repetition and other problems, you’ll be better equipped to deal with them.

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Market Tanks, Donors Disappear, Corporate Givers Vanish: Not to Worry, This is a Great Time to Write Proposals

“Dow Down 500! Dow UP 400! Lehman Brothers Bankrupt! President Proposes $700 Billion Bailout!”* It’s not been easy reading the morning paper the last few weeks without spilling my coffee. This morning’s Wall Street Journal featured Nonprofits Brace for Slowdown in Giving, a scary article about the prospect of nonprofits not being able to raise funds. The intrepid reporters, Mike Spector and Shelly Banjo, say:

The failure of Lehman Brothers Holdings Inc. and pain at other big firms threaten to cut into the corporate and individual donations that more than a million nonprofit organizations rely on for basic operations and charitable programs.

Then assorted nonprofits are trotted out with tales of woe and portents of looming, dire cuts to staff and programs. The United Way of New York City is even going to sponsor “a town hall meeting on the future of nonprofits.” Yikes—maybe the sky is falling. But the magic words “grants” and “grant writing” were absent. The article assumes, like most Americans, that nonprofits exist solely with donations, art auctions, direct mail and the like, forgetting the vast amount of funding available in the form of grants from federal, state and local governments, as well as foundations. While it will undoubtedly be harder for a nonprofit to get a wealthy donor to part with their money, particularly one with ties to the financial sector, there are plenty of foundations, including those related to such booming industries as oil and technology, with tons of grant funds available, as well as billions from all levels of government.

Nonprofit executives should stop worrying about their Christmas card sale fundraiser or silent auction of obscure art pieces by even more obscure artists and get busy conducting grant source research and grant writing, especially because the federal year ends September 30 and the flood of FY ’09 RFPs will arrive in short order like the buzzards returning to Hinckley, Ohio. In addition, the current chaos in the financial and housing sectors are sure to result in new programs and higher levels of funding for some existing programs, particularly those in various economic development and job training programs. For example, I would expect the Public Works and Economic Development Program of the Economic Development Administration (EDA) to get a big boost in its appropriation, which EDA will try mightily to spend quickly for the same reason nonprofits should spend their grant funds quickly. Seliger + Associates wrote lots of funded EDA grants in the mid-1990s, following the last big recession, for projects ranging from street construction in LA to rehabilitating a salmon cannery in Alaska. Similarly, expect lots of new money to be available from the Department of Labor for Youthbuild and other training programs. The bailout bill currently being negotiated between the Bush administration and Congress should be lit up like a Christmas tree with shiny “grant ornaments” before passing.

Even if I am wrong, however, and no new programs or unexpected funding results from the emerging recession, there are still plenty of grant funds available for nonprofits willing to put in the hard work to find them and apply. When economic times are good, it’s relatively easy for almost any nonprofit to lure the usual suspects** into donating. But times are not good; so, if want to keep your nonprofit going, stop worrying and start (grant) writing.

* My favorite quote on government funding was by the late Senator Everett Dirksen of Illinois, who famously may or may not have said,“A billion here, a billion there, pretty soon it adds up to real money”.

** For a mind bending experience even harder than understanding federal regulations, see a truly great and surreal film, The Usual Suspects. Who was Keyser Soze, anyway?

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Community Organizing and the Presidential Election: One Commentator Finally Gets it More or Less Right

Lots of bloviating on community organizing has occurred on cable news shows and in various newspaper opinion pieces in recent months due to Senator Barack Obama’s background as a “community organizer.” Regardless of what Senator Obama did as a community organizer, almost all of the commentary is wrong. A good example is Peter Applebome’s New York Times piece, Feeling the Sting of Republican Barbs in which he describes community organizers as more or less social workers or case managers. But any community organizer worth his salt who came across a low-income person facing eviction would never fool around with trying to solve the individual’s problem. Rather, the organizer would try to identify the person’s and their neighbors’ self-interest to organize around the problem and thus help the community find an overall solution, while building an organizational structure for further efforts.

Unlike Mr. Applebome’s assertions, community organizing is also neither Democratic nor Republican, but is largely apolitical, since it is by definition in opposition to the power structure presumably oppressing the target community. In fact, Saul Alinsky,* the founder of the field, spent most of his life fighting Chicago’s Democratic machine politics. Given the fact that most cities are controlled by Democratic administrations these days, an active community organizer would probably be more likely to battle Democrats than Republicans. Remember that community organizers work on tangible local problems, not grandiose social policy issues.

Hey Sarah—Organize This is another inaccurate piece on community organizing. This one is by Thomas Geoghegan and appeared in Slate. Mr. Geoghegan takes Governor Sarah Palin to task for making fun of community organizers. Leaving aside the politics, community organizers must have very thick skins and good senses of humor and are unlikely to be terribly worried about verbal insults. What caught my attention, however, was the author’s startling claim that “Organizers break laws if they have to. Mayors believe in order.” As a former community organizer, I can attest that organizers try very hard not to break laws because this is exactly what politicians want them to do in order to discredit the organization they are building. Also, politicians have their hands on the levers of power (e.g., police, building inspectors, etc.) and can easily apply legal pressure if the community organizer encourages law breaking. Rather, a good community organizer uses clever civil disobedience within the framework of laws, depending on mayors and other power brokers to themselves break the law by overreacting. Most community organizing strategies are based on the assumption that politicians and their bureaucratic minions will overreact and break the law one way or another. In other words, Mr. Geoghegan got it just backwards. He says he’s never been an organizer, but has “known some,” apparently making him qualified enough to comment. This would be like me opining on the work of circus clowns just because I ran into a guy with bright orange hair, a bulbous red nose and size 22 floppy shoes at a cocktail party one night.

I am going on and on about community organizing mainly because I am so surprised to find the topic suddenly popular due to Senator Obama having captured the imagination of Americans with tales of community organizing on Chicago’s Southside. I have a fondness for the Southside because I received some community organizing training there many years ago, and, more recently, have written lots of funded proposals for a large nonprofit that serves the community. Faithful readers will know from posts like my first, They Say a Fella Never Forgets His First Grant Proposal, and Déjà vu All Over Again—Vacant Houses and What Not to Do About Them, that I began my career as a community organizer in 1972 in the North Minneapolis ghetto. While community organizing had a certain cachet among us college student save-the-world types in the early 1970s, the whole concept seemed to have been lost in the mists of time until Barack Obama burst on the scene. Thus, I find myself waxing euphoric about my halcyon days in organizing.

Senator Obama and I appear to have at least one thing in common, having both been trained in Saul Alinksy style community organizing.* While I am unsure about Senator Obama’s actual training, I was fortunate to have learned from an affiliate of Alinksy’s Industrial Areas Foundation, which then existed in St. Paul, and I also attended some Alinsky training on Chicago’s Southside. So, I’m about as familiar with community organizing as anyone, having not only been trained, but also actually organized some pretty interesting stuff, including a Vacant Housing Task Force, self-help seminars for low-income homeowners and tenants, and a nonprofit cooperative hardware store that operated for a time in North Minneapolis. Not bad for a long-haired 21-year-old college student who was naive enough to think that he could use community organizing techniques to overcome just about anything.

Given the spectacular misrepresentations of community organizing in the popular media during this election cycle that I note briefly above, it was refreshing to open the New York Times on Sunday morning and finally find an opinion piece by Deepak Bhargava, Organizing Principles, which more or less got it right. Mr. Bhargava says:

It’s important to emphasize that organizers like Mr. Espey aren’t there to solve people’s problems for them — they’re there to teach people how to help themselves: to learn how to speak in public, to run a meeting, or to hold their own in a negotiation with an employer, a landlord or a policy maker. Organizers teach people to work with — and challenge — politicians of every party.”

I’ve never run across Mr. Bhargava before, but he understands community organizers and community organizing. I have no idea what, if anything, Senator Obama accomplished as a community organizer, since I’ve never read about any specific accomplishments. I assume, however, he must have organized something. Community organizers are goal oriented, and, as I noted briefly above, I know exactly what I organized during my time as a community organizer. It is likely that this aspect of community organizing—wanting to achieve a discrete organizing goal instead of vague “helping the community” platitudes—helped me become a successful grant writer.

Like good community organizers, grant writers focus on completing the task, not talking about the process for completing the task. Anonymity is another aspect of community organizers that closely aligns with grant writers. Good community organizers never take the spotlight, deferring to the leaders they have nurtured to take the lead at press conferences, actions and the like. Similarly, grant writers largely toil without recognition, since we are just ghost writers for the others who accept the accolades of funded projects. Hey, maybe I’m actually more like James Bond than Barack Obama, since Mr. Bond definitely stays in the shadows, unlike emerging politicians.**

*If you want to understand community organizing, read Saul Alinsky’s seminal books, Reveille for Radicals and Rules for Radicals, both of which I annotated like a copy of Shakespeare’s complete works.

** I for one will lift a Vesper when A Quantum of Solace opens in November. Although the movie probably doesn’t have much to do with the eponymous Ian Fleming story in the only Bond short story collection, For Your Eyes Only, it has been one of my favorite Bond yarns since I first read it as a 13-year-old. I am delighted that the Bond film franchise was reinvented with Casino Royale two years ago and remain hopeful for the next installment.

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Juggling Rules and Principles In Running Grant Programs

Grant programs are not based solely around rules (e.g. you must do this, you must not do that) or around guiding principles (e.g. you’re to help the medically indigent achieve better access to healthcare). Neither approach is absolutely correct, and preferences for each tend to go in cycles, like those of leniency and harshness in criminal justice. The question is which you should adhere to, and the more general answer is: rules when you write the proposal, principles when you run a program.

This post again gets at some of the ideas behind the trade-offs inherent in running grant-funded programs, as I discussed in More on Charities and alluded to in Foundations and the Future. Isaac dealt with part of the issue last week, in It’s a Grant, Not a Gift: A Primer on Grants Management, which discusses the absolute rules of budgets. Within those rules, however, there is room for interpretation: how much of the budget travel should be allocated in travel costs, and how much within that should be dedicated to local travel, for example? Renting a Ferrari for the Program Manager probably won’t cut it, but a reasonable mileage reimbursement rate for an appropriate number of miles, given the size of the service area, probably will. If you reshuffle your budget categories by under 10% of the total budget, your Program Officer likely won’t care, but if you decide after the fact to charge 90% of the Executive Director’s time to the project and you’re audited, the auditors very much will care.

One can see the specific issues between rules and principles in novels, as when a character in Orhan Pamuk’s My Name is Red says, “Now that I’ve reached this age, I know that true respect arises not from the heart, but from discrete rules and deference.” The problem is that strict adherence to the rules of governing a particular grant program might actually result in inferior service: you can blindly continue an activity that is ineffective or, perhaps worse, run a program with a flawed project concept. Too strict adherence to principles can cause a different set of problems: they might be the wrong principles, or, worse, the unintended use of grant funds might constitute fraud.

The easy answer is, “find a happy medium,” which isn’t of much practical use when deciding what programs to apply for and how to fund an organization. The tension between rules and principles will probably always exist, like the tension between the orthodoxy of a movement and the reformers of a movement will always exist, regardless of the movement. In The Name of the Rose, much of the conflict revolves around schisms between ecclesiastical orders that question whether or not it is right to live in poverty. This, incidentally, is similar to questions of whether nonprofits should use more of their funds for direct services at the expense of making it easier to, say, attract good people, or whether they should allocate more to administrative expenses as a way to provide better services. Rules might dictate this—or principles. Regardless of which does, those who seek simple solutions to complex problems are often wrong and often have little sense of history between the complex problems in the first place. Both the movement toward rules and toward principles can be a good thing. Too many rules are stifling, and principles that are too general can lead to abuse.

So what should you do, the person who actually runs grant programs? Should you follow what seems best regardless of rules or adhere strictly to what a program orders you to do? There is no answer—there are only particular situations that might arise as a consequence of applying to some programs rather than others, but if you have some idea of the trade-offs involved, you’re going to be better equipped to understand the issues before you. You’ll also be better equipped to understand which programs you should apply for and how you should use what money you earn.

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It’s a Grant, Not a Gift: A Primer on Grants Management

I was in LA over Labor Day weekend and, at a pool party, chatted with a semi-retired CPA who has been hired by a large nonprofit hospital to help with an audit of a federal grant. The audit is being performed under the Office of Management and Budget (OMB) Circular No. A-133. OMB publishes a variety of circulars covering all sorts of topics. Some, such as A-133, are of great importance to nonprofit and public agency grant recipients but are routinely ignored (to the great peril of the agencies).

In the case of the LA hospital I discussed over daiquiris*, the organization was so surprised and elated at getting the grant that they treated it like a Christmas present. In other words, even though the hospital is a multi-million dollar operation with a full-fledged accounting department, they completely failed to follow federal accounting rules in implementing the grant. They spent the money more or less without regard to terms of the RFP and did not follow A-133 requirements. When faced with the prospect of an unsmiling federal audit team and an unflattering story in the LA Times, they brought in a knowledgeable CPA to straighten out the mess.

The issue resonates with me because, in addition to writing more proposals than I care to think about, I’ve also had the thankless task of managing numerous grants. My favorite story about grant management concerns a large Department of Energy project for electric cars during the late 1970s that I wrote when I worked for the City of Lynwood. This long-forgotten program gave the city about $1 million to buy and operate ten electric vehicles, which proved to be slow and unreliable, making them perfect for a municipal fleet. We were unlucky enough to be selected for an audit and I got tagged to handle it. The auditor turned out to be from the Department of Defense, since the newly created Department of Energy was too fresh to have its own auditors. I settled the fellow down in a conference room with donuts, an essential tool for all audits, and he asked his first question: “What product do you produce in this facility?” Since we were at City Hall, I smiled and responded: “Promises.” The audit went downhill from there.

Based on that experience and many others, here are some basic tips on managing grants:

  • If you don’t have a finance director familiar with grant accounting, find an outside accounting firm that is and hire them to set up your grant-related accounts and procedures.
  • Make sure the person responsible for managing the grant has obtained, read and understands the relevant regulations, including OMB Circulars for federal grants.
  • Spend the grant funds as quickly as you can, since funders don’t want the money back. If an agency fails to spend a grant and returns the funds, the funder will be very unlikely to award another grant.
  • Make sure the funds are spent in accordance with the grant agreement. It is important that the agency can show “maintenance of effort,” meaning that whatever was being done before is not being reduced following grant receipt and that the agency is not supplanting existing funds with grant funds. For example, if the grant is for after school programming, it is not okay to use the grant to pay for current after school programming so that the District Superintendent can remodel her office. If an audit disallows expenditures, the agency will have to pay the money back, which is not an attractive prospect.
  • Keep accurate records, including expenditures, personnel records, activities and in-kind support. That’s right, if you’ve included in-kind support as a match in the budget, you may have to prove that it was provided, so keeping track of volunteer hours, value of referral services provided, etc., is essential. Even innocent and detailed records can cause problems during an audit. For example, while serving as Development Manager for the City of Inglewood**, I had to handle an audit for an Economic Development Administration (EDA) grant. The grant involved demolition, which meant Davis-Bacon prevailing wage requirements for all persons paid through the grant. When the auditor began pulling expenditure records (for each expenditure, this means a check request, purchase order and cancelled check) for workers, it turned out that every demolition worker had the same address, which was a check cashing store. The contractor was apparently having the workers cash their checks and return a good portion of the so-called “prevailing wages” the workers were supposed to receive to the contractor. To avoid disallowance of costs, we had to chase down the contractor once we figured this out to get him to provide back pay to a whole bunch of suddenly very happy demolition workers.

The secret to grant management is to remember that everything related to a grant is likely public information, so don’t do anything you wouldn’t mind seeing on the front page of the local newspaper. As long as you think your grant-funded trip to Las Vegas will pass the smell test for having something to do with solving the challenges facing at-risk youth being funded by a Department of Education grant, I say, Viva Las Vegas!. Just keep in mind, that, when it comes to grants, what happens in Vegas may not stay in Vegas.

*I’m talking real Hemingway “Papa Doble” daiquiris, not the disgusting pre-made concoctions found in most bars.

** As Tupac said and as quoted previously, “Inglewood always up to no good.”