Monthly Archives: June 2014

Issues Facing Old-Line Nonprofits Differ from Those Facing New Nonprofits: Think Bambi Meets Godzilla

We’ve written various posts on the challenges of starting a new nonprofit (like this one), mostly because we get lots of calls from fairly new nonprofits or folks trying to get one off the ground. Last week, however, I got a call from an agency in a large east coast city that’s been operating for about 200 years. I’m not making this up. The nonprofit originally was an orphanage that morphed into a broad-based children’s services agency.*

Though the caller was delighted to recite the exceptional history of his nonprofit, I didn’t get excited, as we we’ve worked for many nonprofits that have been around for decades—including one in a big Midwestern city that started in 1860s as a “settlement house” in the vein of Jane Adams’s Hull House. By now Seliger + Associates is older than many nonprofits.

While the caller was interested in a standard-issue federal RFP that’s on the street, we also talked over the challenges of keeping an Ancien Régime agency going in the face of an endless onslaught of Nouveau Riche competitors. Nonprofits face the innovator’s dilemma too. They must evolve over time and not get stuck in the “these are the services we provide” trap. It helps that most long-established nonprofits have contracts to provide capitated services or services with handy third-party payers (e.g., foster care, family reunification, residential care, primary health care, substance abuse treatment, etc.). Capitated-service agencies have a base cash flow, which they supplement with fundraising and grants (that’s were we come in).

Unlike new agencies, which are struggling for recognition and any funding scraps they can find, the main challenges old-line agencies face are relevance, ossification, and the inevitable disputes that arise with donors and funders.

Old-line agency must meet emerging needs. For example, there is apparently an astounding, sudden and unexplained surge of unaccompanied Central American children crossing into Texas this year, and they are essentially begging to be “caught” by the Border Patrol. This could reach as many as 100,000 random kids this year, who will overwhelm the current residential care capacity in the border states. The border patrol turns these kids over to Immigration and Customs Enforcement (ICE), which then hands them off to DHHS for transportation and temporary or permanent—depending on your interpretation of immigration laws—resettlement in small and big cities across America.

Not surprisingly, the Obama administration is requesting $2 billion in new funding to address this human tidal wave or humanitarian crisis, once again depending on your point of view. I’m confident much of this money will end up as competitive grant opportunities from the DHHS Office of Refugee Resettlement (ORR). As the former White House Chief of Staff and current Chicago Mayor, Rahm Emanuel put it, “you never want a serious crisis to go to waste.”

Say you’re our former midwestern client and have been around since the Civil War. You provide family and child support services but not residential care, so it’s essential to develop this capacity; thousands of Central American refugee children are likely to be dumped into your service area. You should meet this new crisis, as part of your mandate and mission, while at the same time bolstering your revenue with tidy ORR grants. This is a basic “win-win.”

Regarding ossification, old agencies are usually larger and bureaucratic, mimicking the funders that support them. It’s easy for a large, established nonprofit to become moribund, not only in the services they deliver, but also in the way in which services are delivered. Old agencies are less likely to adopt new technology and cultural practices—like contacting clients and conducing outreach through social media—because they do things the way they’ve always done things. Change is hard and inertia is seductive. This phenomenon is not limited to the nonprofit sector. Examples in business are common: huge companies like Motorola, Sears and IBM (before IBM reinvented itself under the remarkable CEO, Louis Gerstner) rise, lose focus or miss market shifts, and fall.

Finally, old-line nonprofits will often become embroiled in disputes with donors and funders. This can range from rich Mrs. Himmelfarb, who makes $100,000 annual donations, getting pissed off because she got seated at the wrong table at the nonprofit’s annual gala to the agency failing to submit required reports to the DOL for the agency’s YouthBuild grant. Once donors and/or funder program officers get annoyed with a large nonprofit, the organization may suddenly find itself in financial trouble.

Beneath the feet of every lumbering old-line dinosaur nonprofit are tiny new mammal nonprofits scouring around and trying to meet new community needs, provide nimble services in innovative ways, and eventually take away the big boy’s donations and grants.** The old-line nonprofit needs to address these upstarts by acting like Godzilla in Bambi Meets Godzilla, perhaps the best short film ever made.


* Fun fact: although it may be moving against the conventional wisdom to defend orphanages, Richard McKenzie explains why they’re often better than foster-style systems in “The Best Thing About Orphanages.” Saying “They’re better than the alternative” is not equivalent to saying, “They’re great!”

** Some grant programs are explicitly designed to provide challengers to incumbents; Community Health Centers (CHCs), for example, are eligible for “Service Area Competition” (SAC) grants. As readers of our e-mail newsletter know, the last two weeks have seen more than $150 million in SAC grants. Every geographic area in the U.S. is supposed to be covered by a SAC-funded agency, and every time a competition arises, new CHCs can try to wrest the grant from the existing grantee.

Until you get a call from your congressman and sign a contract, grant notifications don’t count

Last week, a client got a federal funding notification e-mail for a proposal we wrote a few months ago, and and the client started celebrating… until an hour later, when the Federal department sent a second e-mail, recalling the first and saying our client hadn’t really been funded.

That hurts, but it’s also not the first time something like this has happened to our clients. It’s a truism that, in any business, until the contract is signed and the money obligated, nothing counts. There are innumerable stories in the venture capital world about analogous shenanigans, including small companies that have picked up and moved, only to be told “just kidding.”

The cliché “money talks” exists for a reason. It’s still a pretty nasty mistake, however, for a federal agency to tell a nonprofit they’ve been funded when they haven’t. Mistakes do happen and one learns pretty quickly in grant seeking that federal bureaucrats are far from perfect.

Many of our clients first learn they’ve funded for a federal grant not from the funding department, but from their congressperson, or from a press release via their congressperson’s office. Every SF-424—which is the cover sheet for all federal proposals—has an input box for the applicant and project area congressional district(s). Congresspeople love to take credit for money going to their district, especially if the congressperson exerts no effort whatsoever.

It is common practice for federal departments to notify the affected congressperson when a grant award is made, often before the applicant is notified. Thus, an applicant may hear from their congressperson or read about it in local newspaper, before they get their notice of funding award email. The good news about this system is that it tends to make the program officers, who send out the funding award emails, marginally more interested in being correct. Congresspersons* get very angry at mistakes like the one suffered by our client. They tend to make a much louder ruckus than any nonprofit or public agency. Imagine Congressman Frank Underwood, as portrayed by Kevin Spacey in House of Cards, learning that the press release he just sent to the Gaffney Picayune Press concerning a YouthBuild grant to a local nonprofit having been sent in error because a DOL GS-12 sent award emails to the wrong list.

With our client, it’s pretty clear that both the proposal and client were fundable, but political machinations (or, more charitably, “considerations”) got in the way and the first email was sent in error. If you’re in the game, not every call goes your way. And the “game” here can refer to grant writing, but it can also refer to “life.”


* Is it “Congresspeople” or “Congresspersons”? Internet authorities appear split. Most seem to agree that it is a good idea to use “congressperson” as a lowercase, non-proper noun unless one is referring to a specific congressperson.

Talking About Progressive Ideals in Proposals: Money, Time, and Poverty in Grant Writing

No Money, No Time” helps set the cultural tone for the proposal world. In the proposal world—which does sometimes overlap with the real world—poor people spend time where richer people might spend money. Rich people are rich in many ways, but one is simple: their lives aren’t as organized around other people’s bureaucracies.* A nonprofit or public agency should help the poor, and it would be a good idea to incorporate the idea that poor people don’t have the time wealthier people do. This idea also ties into other important parts of contemporary thinking: if low-income people** weren’t so busy with day-to-day survival, they’d go buy arugula from the farmers market and make a salad, instead of buying Cokes and Big Macs.

There is some truth to the argument: a lot of low-income people are surrounded by endless appointments, case managers, social workers, parole officers (sometimes called corrections officers), and others who want a piece of their time. That time does add up. Years ago, we wrote a proposal to L.A. County for a nonprofit proposing to fund “master” case managers who would manage each client’s roster of case managers, parole officers, court cases, etc.

That’s not a totally superficial idea, though it has the ring of parody. If a poor single mom misses an appointment with her Child Protective Services (CPS) case manager, her kids might be put in foster care and she’ll end up in court. If she misses a shift, she might lose her job. If she fails to fill out out a form completely, she (and her children) might lose Medicaid or a Section 8 apartment. Life for the American poor is like a game of Chutes & Ladders—which is not an original thought, since Katherine S. Newman made the argument in a book called Chutes and Ladders: Navigating the Low-Wage Labor Market (and she’s written a number of others, all good; used copies are under $1 on Amazon. If you’re writing social and human service proposals, you can’t afford not to buy them).

In the proposal world, solutions spring from government funding, but in the real world, many of the problems derive from laws passed by legislatures. Among the poor in particular—who cannot afford good lawyers and who often cannot afford service fees and other penalties—lives get complicated by entanglement with officialdom and by drug prohibition. Legal issues usually involve drugs and kids; jailing men for failing to pay child support has a real, under-appreciated downside that is not being widely discussed (though you will hear about it in some places).

Even outside the realm of drugs and kids, we have so many laws, rules, and regulations—many not at all intuitive and many counter to the ways actual people want to live—that no one is innocent and everyone breaks laws, usually inadvertently. Tyler Cowen’s “Financial Hazards of a Fugitive Life” also describes this; the column is substantially about Alice Goffman’s brilliant book On the Run: Fugitive Life in an American City, which you should also read (and cite).

These laws came, not surprisingly, from good intentions. Before Prohibition, progressives theorized that getting rid of Demon Rum and John Barleycorn would mean that men wouldn’t get drunk, lose their jobs, eventually lose everything, and send their wives and daughters into prostitution. As any student of history knows, that didn’t turn out real well. Drug prohibition isn’t working out real well, but we’re still wasting a lot of time and resources doing it—in all sorts of ways.

Some costs to drug prohibition are quite small. Office Depot used to have tons of signs up saying, “We drug test employees.” But our thought was: who cares? We’re just asking someone where the pens are. If Office Depot’s employees want to light up after work, that’s their own affair. Nonetheless, Office Depot may have been unintentionally reinforcing poverty by denying jobs to otherwise qualified workers who like to dance with Mary Jane on the weekends (just like many social workers and case managers, at least in my experience).

The net result of this is the time crunch. The first article in this post should be cited in proposals—but only in the needs assessment. The problem should be forgotten in the project description, since participants must be assumed to have lots of time to serve on the Participant Involvement Council (PIC), community service etc. Other writers have also described the time trap of being poor: John Scalzi’s “Being Poor” is one particularly poetic example.

The time crunch is not unique to poor people and human service organizations serving them. Isaac actually tried to talk to the Small Business Administration (SBA) group in Seattle when he first started Seliger + Associates. They wanted him to sit through ten sessions on… something, all of which required lots of travel time he didn’t have because he was furiously busy writing proposals and finding clients. You do not discuss the nature of warfare, starting with the Greeks, when the enemy is shooting and your position is in danger of being overrun.

That being said, it’s useful to understand where these ideas come from. There are, loosely speaking, two big views on poverty right now. The one presented in the New York Times, which we’ve been discussing in this post, is the generally leftish, Democrat, progressive view, and that’s the view that should predominate in proposals. The other view is generally rightish, Republican / Libertarian-esque, and slightly more conservative, and that’s the view that the material conditions of being poor in the U.S. have improved incredibly over the last century or more. That’s where one gets The Heritage Foundation pointing out that 80% of poor people have AC, 75% have a car, two thirds have a TV, and so on. That’s also where one finds Charles Murray’s solutions in Coming Apart: The State of White America, 1960-2010 (these issues are not unique to the United States: Britain’s working class faces similar travails).

Just about everyone likes Murray’s research, but American progressives and conservatives tend to disagree on what the research means and what, if anything, should be done about it. Progressives tend to stress direct income transfer and government-paid supportive services, while conservatives tend to stress marriage, avoiding drugs, not getting knocked up outside of marriage, etc.

Beyond the drug war, there are other drags on the earnings and lives of poor people. Almost no one, right or left, mentions that the rent is too damn high, and that every time wealthy owners in places like Santa Monica, Seattle, and New York prevent new construction, they’re simultaneously making the lives of the poor much, much harder. Only a relatively small number of voices in the wilderness are speaking up.

We’re grant writers—that is, hired guns—so we’re not intensely political about these issues and are in it for the money (I know you’re shocked). Usually we shy away from the theory and thought behind grant writing, since most readers and human service providers don’t really care about it, or care to the extent that thinking translates into dollars.


* Isaac doesn’t like using the word “bureaucracy” in proposals, in any context, but I’m quite fond of it. Isaac says that isn’t a good idea to remind the bureaucrats reading a proposal that they are in fact bureaucrats who are making people jump through hoops in order to receive goods and services. He may have a point.

** In proposals, no one is poor and everyone is “low-income.” We use them interchangeably here only because a) this is where grant writers and nonprofit administrators come to talk about reality, not fantasy, and b) the original writer uses the term “poor.”

The Grantnado Continues: The Department of Education Finally Issues the GEAR-UP RFP—and $650M for Early Head Start

As I predicted last January, the Department of Education has issued the FY ’14 Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR-UP) RFP. While it took longer than I thought, the RFP butterfly has finally emerged from the hidden DOE cocoon. My previous post asked: Why do federal agencies usually keep prospective RFP issuance dates for programs like GEAR UP a secret?

I don’t have any idea why DOE behaves this way, but it’s detrimental to applicants.

The GEAR UP RFP was not issued unit June 4 and the proposals are due July 7—conveniently just after the 4th of July holiday. This means that applicants only have about 30 days to complete a very complex proposal. If they (or, let’s be honest: you) actually want to enjoy the 4th of July weekend, applicants really only have about three weeks to get the job done. If you’re a faithful GWC reader, however, you’d have known the GEAR-UP RFP was coming and could have been working on your proposal well in advance of the RFP being issued.

By the way, GEAR-UP is similar to the many TRIO Programs.* While the various TRIO programs have differing approaches, they all share the same basic goal: to increase the number of low-income students, minority students and/or students with disabilities completing high school, as well as earn a college degree. GEAR-UP is intended to help the same target groups “gear up” for postsecondary education through after school academic enrichment activities during middle and high school.

Continuing the self-congratulatory theme of this post, ACF just issued a huge RFP for the Early Head Start program. This bad boy has $650M up for grabs and 300 grants will be awarded for early childhood education providers. At least the deadline for EHS, August 20, is reasonable—unlike the psychotic GEAR UP deadline.

Last October, Jake predicted that the then-government shutdown and budget deal would lead to a Grantnado of RFPs, as the feds untangled the RFP logjam. The late issuance of the EHS RFP illustrates that the feds have to move money out of the door in any given fiscal year; FY ’14 is unusual because lots of big RFPs are still being issued relatively late in the fiscal year.


* When Jake taught upper division Technical Writing at the University of Arizona, he assigned writing a mock program plan for the Educational Opportunity Centers (EOCs) program—which is part of TRIO—primarily because the EOC RFP was on the street at the time and he’d just finished one, so he was very familiar with the RFP and program. As Jake wrote in this post, his students—all of whom were college juniors and seniors—were mostly unable to write coherent EOC program plans. Perhaps they would have done better if they’d been GEAR UP participants in high school.