Monthly Archives: October 2017

Grant writing during an economic boom: primary health care, substance abuse, homeless services, and jobs!

In 2010, I wrote “Grant Writing from Recession to Recession,” and last week the Bureau of Economic Analysis announced that GDP increased by 3% in each of the last two quarters. The stock market is rocketing upward.

This post is the obverse of my 2010 post; while grant seeking and grant writing are eternal, they’re different during economic lows and highs. As we’ve written many times before, nonprofits typically derive revenue from a mix of donations, membership dues, third-party reimbursements (e.g., Medicaid, substance abuse treatment, etc.), fee-for-service contracts (e.g., foster care, home health care, etc.), government grants, and foundation grants.

As the economy takes off, nonprofits will see increased donations, fundraising revenue, and/or membership dues, as people either have more disposable income or think they do. Still, it’s a shortsighted nonprofit that puts too many revenue strategy eggs in the donation / fundraising / membership dues basket—any number of impossible to predict black-swan events could occur, or the economy could just fizzle back into the slow growth pattern of the recent decade. Donations and membership dues could disappear in a flash, just like they did in 2008 – 10.

Nonprofits that provide some kind of heath care should see a big uptick in third-party reimbursements and fee-for-service contracts, particularly regarding Medicaid services (FQHCs for example), opioid-use disorder (OUD) treatment, and HIV services. Despite eight years of political posturing, it looks like some version of Obamacare and expanded Medicaid is here to stay. Also, with more Americans now dying annually from ODs than car crashes, there’ll be big increases in funding for OUD treatment and HIV services, since HIV transmission is closely linked to the injection drug use that is at the center of OUD.

This brings us to grants. Despite rumors, the Trump administration and Republican congress have not decreased federal funding for discretionary grant programs. The FY ’18 Federal Fiscal Year began on October 1. Since 1998, Congress has funded the federal government via a series of Continuing Resolutions (CRs), rather than passing actual budgets. In general, CRs use a “baseline budgeting” concept, which means that the FY ’18 CR, which just passed Congress last week, mostly continues funding levels for discretionary grant programs from the previous CR, adjusted upward for inflation.

Since every Federal program has a strong lobby and highly paid lobbyists, Congress rarely makes significant, real spending cuts. Instead, if anything happens, Congress might restrict the rate of federal spending growth—but not adjust the underlying, baseline level. Funding for the NEA, public broadcasting, etc., will not be eliminated or even reduced. These parts of the government are popular symbolic targets, but virtually all of the growth in the federal budget comes from Medicare, Social Security, and Medicaid. Any budget hawk that doesn’t propose reductions to the first two is simply not serious.

There are actually more federal grant dollars up for grabs in FY ’18 than in FY ’17. The same will be true for grants from most states and big cities/counties, as tax revenues will climb with the rising economic tide. Counterintuitively, there’ll probably be less competition for most RFPs. With the better economy, some nonprofits will forgo submitting competitive grant proposals, choosing to pick the new low hanging fruit of donations, membership dues, and fundraising. Smart nonprofits will, however, go after every plausible government grant opportunity, since there’s no good reason not to and some organization is going to get the grants.

In the coming years, the big grant opportunities will likely be in primary health care, substance abuse treatment, Ryan White services, homeless services, and job re-training. One of the oddities of America at the moment is that homelessness continues to increase, despite a pretty good economy. Many cities, like Los Angeles, Seattle, San Francisco have passed, or proposed, big new local taxes to fund homeless services, in addition to the federal McKinney Act Programs through HUD. With respect to re-training, despite low unemployment rates, about 90 million working age Americans remain out of the workforce for reasons ranging from former incarceration to less than catastrophic disabilities to outmoded work skills or something.

The workforce must adjust to the rise of robots and AI-related manufacturing and services, which means lots of grants will be available for job training and re-training project concepts. Nimble nonprofits, who traditionally have been involved in such services as housing, prisoner reentry, family support, after school programs, teen pregnancy prevention and the like, would be wise to change their missions to go where the money will be.

Foundation grants will also be a good target. By federal law, foundations are required to spend at least 5% of their endowments annually on grants. With the huge stock market run, foundations will be flush with investment earnings that must be distributed through grants. Go get ’em tiger.

Nashville, seen and unseen

I’m flying back from Nashville today, and I keep thinking about what I saw—and what I didn’t see. Let me explain: there are now many places that, in demographic, income, and related terms, don’t look like a normally distributed curve, with a big hump in the middle and trailing, small tails of the very rich and very poor. There are still of course some places that are nearly all poor and nearly all rich; we write about some of the former, for obvious reasons, and pretty much none of the latter. Unlike where Apple Stores locate, we primarily work where the affluent aren’t.

Many places, however, increasingly see a bimodal distribution, like this:

In these places—and we’ve written about a lot of them for clients—more and more people are well-off. These places are often gentrification stories, in which once-poor or marginal areas are taken over by college-educated high-earners looking for a reprieve from big-city housing prices.

But there’s often a second, shadow story as well, and in that story far more people are simply not making it—but not showing up in data like median household income. They’ve fallen out of the middle class or never quite made it there in the first place. Their lives were okay until opioid addiction or an accident or a factory closure turned those lives downwards. They’re making it every month until draconian zoning laws increase their rent to unrealistic levels, leading to eviction.

Those people are part of the data too, but the bifurcation means they can get lost from a cursory glance at Census or similar data. At the city or county level, data can look pretty good, even if at the zip code or Census Tract level reveal many pockets that aren’t doing well. We’ve seen that kind of data reappear over and over again as we write needs assessments for proposals, most prominently in L.A. and New York, but this bimodal dynamic appears elsewhere too—and I’m confident that Nashville is one of the places where a “two worlds” story can be told.

One of those worlds is downtown and near Vanderbilt University, with no shortage of trendy coffee shops like Crema, where sublime, rococo $6 pourovers are available.* In that world, construction cranes are seemingly everywhere. I checked a couple of new apartment buildings where one-bedroom apartments are almost $2,000 a month. For that price, I’d take Brooklyn or Queens, but someone must be willing to pay—however absurd those prices seem to me. I suspect the next recession will be an interesting experience for those building developers/owners.

The other world is not very far away, and I found some evidence of it off West End Avenue: the mom-and-pop nonprofits renting storefronts, cheap ethnic restaurants (which I like!), and halfway houses/treatment facilities. I’m guessing that a lot of downtown and Vanderbilt residents only rarely wander into those parts of town, even though they’re pretty close, geographically speaking.

Almost every Nashville native I talked to mentioned traffic and parking problems. To me that’s hilarious; I saw no traffic issues whatsoever, or nothing that I’d consider real traffic, but my internal calibration comes from Seattle, NYC, and L.A., with those last two being the biggest cities in the U.S. Urban planners like to say that every place worth being has a “traffic problem,” so I tend to discount those complaints. And parking problems make sense too, due to the hidden high cost of free parking. But most people don’t think in terms of systems; they think in terms of what’s immediately in front of them. To fix the “problem” at the forefront, it’s often necessary to think about the system as a whole—exactly like most people don’t.

To my eyes, I didn’t see traffic in Nashville; I saw underutilized roads that were empty almost all the time. Empty parking spots could be seen almost everywhere I walked and rode. The city seems to have lots of space for growth, and there are even plans for a rail network that will make the transportation system more functional. I have no idea if that’ll come to fruition, but if Nashville voters are smart they’ll think about the future and avoid Seattle’s errors.**

I write about transit here because transit issues are linked to housing issues, and housing is becoming (or has become) a major issue driving poverty, problems with the middle class, and other economic challenges that grant-funded programs are supposed to ameliorate. Without addressing them, many job training and housing are doomed to fail, much like L.A’s Prop HHH for homelessness services.

Some other thoughts, less cogently developed: Vanderbilt dominates the educational landscape. There are also some HBCUs in the city, but it’s striking how this single university sprawls almost everywhere. In Seattle, the University of Washington plays an analogous role, but Seattle seems to have more community colleges in it, along with the private Seattle University and the University of Puget Sound in nearby Tacoma. I don’t have a huge amount to say about what this means, but as someone who likes to teach as well as write proposals, it’s noticeable.

There’s a lot of “sir” and “ma’am,” or at least more than I’m used to. It’s charming. Coming from NYC, it’s hackneyed to say it, but people really are more polite in the South!

Most city ads and slogans are, uh, BS—or at least overstated. Nashville bills itself as “Music City” and lives up to the name. Guitars are everywhere, as is live music. The guy who played at my hotel on a random Thursday night sounded really good. Most of the time, where I hear “live music” at a bar, I want to go elsewhere. Not so in Nashville. I kept chatting with people and asked, “What made you move here?”, and many said, “music.” I stopped to listen to many singers in random bars and most of those singers were good.

Of the new residents who didn’t say “music,” many were from smaller towns elsewhere in the vicinity. One hostess, for example, was from a small town in Arkansas, and she had the charming accent to match. Another guy said he’d moved from Mississippi for “opportunity.”

The bike share program is so small that its utility is limited, and I don’t think I saw anyone apart from myself on a bike for the first few days. If traffic were truly bad, that would change. The city is ripe for Ofo, Spin, and Limewire: dockless companies that make the bike pickup and dropoff experience far simpler. Sidewalk space is copious, too.

While I visited, a fire department conference was going on, so I spontaneously pitched grant writing to some of the fire chiefs I met for the Assistance to Firefighters Grants (AFG) program. We’ve done a fair amount of work for fire and police departments over the years, although we don’t emphasize that on our website or in general marketing.

Austin is the next city on the visit list. I already have one person lined up for a meeting there; if you’re in Austin and want to talk grants, teaching, and related matters, drop me an email.

* While I was writing this post, a hipster-looking dude in a checked shirt and glasses came over to ask if I knew the wi-fi password. I didn’t—I often like to write “offline,” so to speak, and away from the endless carnival of the Internet—but somehow the experience is emblematic of the nerd economy.

** Briefly, Seattle had various rail plans that by some estimates date back to 1912; in the ’70s, Seattle almost started a rail system funded with federal money, but cutbacks at Boeing made people wonder if the city was going to shrink into itself. Then the city began to recover in the in the mid ’90s and began planning its current light rail projects. Unfortunately, the early parts of the project were ill-managed, but there’s now a light rail line stretching from the SEATAC Airport in the south to the University of Washington (“U-Dub” in local lingo) in the north. Still, no train lines cross Lake Washington to Bellevue (home to many Amazon execs) and Redmond (Microsoftville)—yet. The next major line is supposed to open in 2021 or 2023. The slowness of the projects is notable.

Links: The end of the world, schools, teens having less sex, school structure, housing, drug policy, Pre-K For All, and more!

* “The Ends of the World is page-turner about mass extinction.” Note: “The evidence suggests that every single time, mass extinction was the result of runaway alterations in the planet’s atmospheric composition.” I read and loved it.

* “GM and Cruise announce first mass-production self-driving car.” Wow.

* Why do U.S. schools still start way too early? “Tradition and inertia” seem to be the real answers. But starting middle and high schools later in the day is as close as we’re likely to come to a free lunch in education.

* École 42, a free, teacher-less university in France, is schooling thousands of future-proof programmers. Cool.

* “How Local Housing Regulations Smother the U.S. Economy;” nothing here that regular readers don’t know, but the venue is of interest.

* In Defense of Amy Wax’s Defense of Bourgeois Values.

* “Americans Losing Faith in College Degrees, Poll Finds: Men, young adults and rural residents increasingly say college isn’t worth the cost.” Isaac sent this one to me, and I wrote back to say that in some cases. . . they’re probably right. There are a lot of people (and not just men) who likely don’t belong in college and go because it’s “the next thing” after high school. Which is a great way to spend a lot of money, not necessarily learn very much, and then be 22 with five figures of debt. I’ve taught a lot of college classes and wrote about that experience here.

* “Pile it high: Singapore’s prefab tower revolution.” It’s possible to dramatically lower the cost of construction itself.

* “Bored? Underworked? You’re an ideal candidate for a company struggling to find new staff.”

* Leather grown using biotechnology is about to hit the catwalk. Good news is underrated.

* Why Koreans shun the suburbs.

* “Cheaper, Lighter, Quieter: The Electrification of Flight Is at Hand.” Maybe, but we’re still waiting for the flying cars and paperless offices we’ve seen prophesied for decades. For another take, see Why electric airplanes within 10 years are more than a fantasy: Startups plan to make hybrid airplanes, and eventually purely electric ones.”

* Relatedly: As electric motors improve, more things are being electrified.

* “Top medical experts say we should decriminalize all drugs and maybe go even further.” It seems the current approach is ineffective at best and is more likely to be actively harmful, so a new method is in order. Or, rather, a new-old method, because drug laws didn’t come into being until the late 19th Century.

* “The New Preschool Is Crushing Kids: Today’s young children are working more, but they’re learning less.” Should be a familiar story to our NYC Universal Pre-Kindergarten (UPK) clients.

* “Is your state road system broke? Then hit up. . . the Prius drivers!” An example of misguided policy and failing to think about the bigger picture.

* “Is there a Rawlsian argument for redistribution as a form of social insurance?” A brilliant post, do read the whole thing, and note that I have thought this before, albeit phrased differently: “In fact what I observe is people taking the status quo, and its current political debates, as a benchmark of sorts, and choosing sides, yet without outlining the ‘stopping principles’ for their own recommendations.” And I have succumbed to this as well!

* “How to Win a War on Drugs: Portugal treats addiction as a disease, not a crime.” Seems obvious to most people, except for a few elected or appointed officials who are stuck in the 1980s “War on Drugs” fiasco.

* “A 400-year story of progress: How America became the world’s biggest economy.” The important news that’s likely to stay news.

* “How sky-high housing costs make California the poorest state.” Many of you who live in CA already know as much. The point about land and housing costs links to our post, “L.A. digs a hole more slowly than economics fills it back in: The Proposition HHH Facilities Program RFP.”

* “L.A. County now has 58,000 homeless people. So why are there thousands fewer shelter beds than in 2009?

* “Don’t buy the idea teens are having less sex until you take a closer look at the data.” Does “sex” include “oral sex?” The answer changes the way the data are interpreted.

* “De Blasio Expands Affordable Housing, but Results Aren’t Always Visible.” Unfortunately, “The vast majority of the newly created affordable housing units in New York City are existing apartments, not new construction.” This just exacerbates the “haves” and “have-nots” problem in the city. The only affordable housing is lots of housing. Until we get lots of new units built, the cost of existing units will rise.

* “How the University of New Hampshire spun blowing a frugal librarian’s donation on a stupid football scoreboard.” It does seem too nicely symbolic of modern universities.

Don’t trip over the homeless on your way to the LA Proposition HHH Homeless Facilities Bidders Conference

Although we rarely go to RFP bidders conferences, last week I was in Downtown LA during the Prop HHH Homeless Facilities RFP, so I stopped by—and noticed the interaction between the homeless services professionals and the homeless.

The conference was held on the 15th floor of City Hall South, a faceless 60s concrete monolith between the iconic City Hall and somewhat infamous Parker Center, the LAPD headquarters.* City Hall South is surrounded by the kind of lifeless concrete plaza Jane Jacobs railed against.

As I walked across the plaza, I noticed a fairly elaborate homeless encampment (e.g., tents, tarps, shopping carts, etc.); real homeless are hanging out around the public fortress, and inside the fortress City slugs and nonprofit reps are discussing how to hand out $1.2 billion to help the homeless. I was tempted to invite a couple of real homeless folks to come up to the conference with me, just to gauge the reaction, but I demurred.

I sat in the plaza for about 15 minutes after the conference and not a single attendee—they were marked by their visitor badges—even looked at the homeless. Consider this another small but notable dispatch from the real world to the proposal world.

* When I worked for Mayor Tom Bradley in the mid-70s, my office was on the 23rd floor of City Hall; I parked next to Parker Center and walked through City Hall South every morning and afternoon for about 18 months. It’s a strange, slightly melancholic feeling to be back after all these years. There were no homeless around City Hall or City Hall South back then. I’m not sure what this means, but it doesn’t feel much like progress to me.

Los Angeles’s Prop HHH Funding for homeless facilities meets NIMBYs

The NYT has learned that “For Homeless Advocates, a Discouraging Lesson in Los Angeles: Money is Not Enough.” The story describes how an LA nonprofit is struggling to build a 49-unit housing development for the homeless in Boyle Heights neighborhood, and the main funding source is a Proposition HHH grant—a program we first wrote about back in August.

As we wrote then, Prop HHH authorizes $1.2 billion for homeless facilities. Although the NYT reporter doesn’t seem to know it, Prop HHH funding is not limited to housing; it can be used for any facility—including medical clinics or supportive services—that can be construed to “benefit persons experiencing homelessness, chronic homelessness, or at risk of homelessness.” The key phrase is “at risk of homelessness,” since, given LA’s astronomical rents and relatively low incomes, Prop HHH grants could be used for almost anything. Remember that, adjusted for the cost of living, California has the highest poverty rate in the country. Overall, the proposed Lorena Plaza illustrates how how challenging it is for nonprofits to get facility grants—and then actually get the facility built.

LA and California as a whole are progressive Democratic Party strongholds that superficially care about affordable housing. While most politicians and voters support expanded human services initiatives like Prop HHH (which is great news for grant writers), the Democratic LA City Councilman Jose Huizar, who represents Boyle Heights, killed Lorena Plaza.

In other words, the City that giveth with one hand taketh away with the other. Councilman Huizar would probably support a homeless housing development in the distant, white and affluent Pacific Palisades neighborhood, but he’s not so much interested in one in his low-income and Latino district. We’re seeing a specific instance of the long-standing NIMBY (Not in My Back Yard) phenomenon.

Even though the City is trying to give away huge Prop HHH grants and Boyle Heights residents likely voted overwhelmingly for Prop HHH, they voted in the abstract for “more funding,” which feels different than looking at concrete plans to build a facility down the street from their home, business, school, church, whatever. As anyone who’s worked in affordable housing development, and especially housing for potentially less than angelic residents, knows that, no matter the income level or ethnicity of the neighborhood, residents with metaphoric pitchforks and torches will oppose a project like Lorena Plaza. In Lorena Plaza, 50% of the units are or were to be for homeless folks with severe mental illness. All politics is local and apparently Councilman Huizar opted for re-election over a place for the most vulnerable people in our society to sleep at night.

At Jake’s recommendation, I’m currently reading Seth Stephens-Davidowitz’s excellent Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are. The author uses Google searches and other big data sources to illustrate that much common wisdom is wrong. It turns out that people often lie about things in the abstract (e.g., “I support housing for the homeless” to a pollster), while at the same time googling “how to stop a housing project,” when one is proposed down the street.

All this doesn’t mean that some version of Plaza Lorena won’t get built or that the City won’t eventually award the $1.2 billion in Prop HHH grants. It just means that nonprofits have to be prepared for the struggle. Legal struggles also increase costs, and, in the aggregate, those legal costs help explain why California has the highest poverty rate and affordable housing crisis in the nation. Legal and political struggles also mean at that much of Prop HHH funding will actually be used for non-housing projects, like primary care clinics, which are much easier to “sell” to NIMBYs who have been legally empowered to block any change, anywhere.

Whether an LA nonprofit is proposing a project like Lorena Plaza or a clinic, it’s important for the nonprofit seeking a Prop HHH or any other facility grant to understand that the proposed site can usually be easily changed after the grant award. The funder doesn’t want the grant to be returned. The leverage shifts from the funder to the grantee after funding.

We advise our clients seeking facility grants to pick a site that can be made to seem easy to build for purposes of the proposal but also to be ready to swap the original site for a new site if something goes wrong with the original site, including an attack of the NIMBY Zombies. We see this site-swap frequently in facility grants from HUD, HRSA, etc. YouthBuild projects, for example, often feature site switching. In grant writing, it’s always critical to remember the difference between the proposal world and the real world. In the proposal world everything with the site will work out perfectly and smoothly. In the real world… well, as you can see from the Plaza Lorena example, things rarely works out smoothly.

And, in other LA housing news, “Up to 600,000 expected to apply when L.A. reopens Section 8 housing list this month after 13 years.” Section 8 is a fine program, but it cannot overcome parochial zoning that restricts the supply of housing. Until LA overcomes zoning that limits livable space by mandating height limits, lot setbacks, and parking minimums, it won’t and can’t achieve anything like affordable housing goals.