Category: Media

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Urban doom loops mean that a new “Grant Wave” is forming

Many nonprofit and local government executives think that federal and foundation grant funding priorities are relatively static, but they’re not—we’ve written about grant waves before, and a massive new grant wave is forming just over the horizon. Unlike sudden funding shifts due to unanticipated disasters such as COVID, or a major hurricane like Katrina, grant waves develop over time as the legislative and executive branches react to emerging challenges. The new and building grant wave is one I’ll call the “Urban Doom Loom Grant Wave.”

The media is filled with Urban Doom Loop stories like “The risk of an urban doom loop for America’s old-line cities: Ailing metropolitan centres need creative solutions from the public and private sectors.” This article gets two major points wrong and one correct:

  • First Wrong Point: It’s not just “old-line” cities that are at risk of economic implosion, as this can happen to any city, old-line or new. By old-line, the author refers to “San Francisco, Chicago, New York.” Urban economic woes, either historic or current, can be demonstrated using various metrics, one of which is simple population increase vs. decrease. Chicago’s population, for example, peaked at 3.6M in the 1950 census, declined to 2.7M in 2020 and is down to 2.6M in 2023. A case can be made that San Francisco, which the tech revolution has transformed in recent decades, is more of a “new-line” city than an old-line city. Still, its population peaked at 874K in 2020 and has dropped 17.7% to 715K in 2023. While this simple change metric ignores underlying factors like the incomes and other socioeconomic indicators of who’s moving in and out, it’s one approximation of local economic health—people tend to move toward job opportunities, affordable housing etc. But the median sale price for a San Francisco housing unit is $1.4 million—hardly a sign of doom, although prices are down about 8.5% in 2023 from 2022.Population obviously isn’t a perfect metric. Seattle and Portland, which appear in daily apocalyptic news stories about crime, are both new-line cities. Leaving aside the “if it bleeds it leads” aspect of news coverage, both seem to be facing significant economic and quality of life challenges, which are reflected in modest population change: Seattle’s population has dropped by 1.7% and Portland’s by 2.8% since the 2020 Census. One reason population growth or decline is a fair measure of urban vitality is that a city’s public and private infrastructure (e.g., roads, transit, office/retail buildings, housing stock, etc.) grows as the population grows. Expanded infrastructure is a “spent cost” and public and private infrastructure must be maintained even if the tax base and lease/rent revenues fall. In the short- to medium run, this inevitably means higher taxes and/or lower services, which are strong feedback loops for the Urban Doom Loop phenomenon. Detroit, for example, has lost 50% of its population since 1960, despite endless attempts by the city, state, feds, Big Three car makers, and more recently Rocket Mortgage to reverse this trend.
  • Second Wrong Point: The article attributes the current Urban Doom Loop to “the lingering effects of the pandemic.” While lockdowns in cities like LA and NYC disrupted city economic life with work-from-home leaving office buildings empty and few retail shoppers, this is not the only cause of the current Urban Dom Loop cycle. For many Midwestern and Eastern industrial cities, there are been several Urban Doom Loop cycles starting around 1950. This began with the shift of manufacturing first to suburbs, later to the South, and eventually developing countries.Returning WWII GIs took advantage of the GI Bill to buy starter homes in burgeoning suburbs aided by the Interstate system that facilitated commuting. Then, the wave of civil disturbances in 1967 and 1968 accelerated the urban-to-suburban migration, along with well-intentioned but misguided federal urban renewal policies. This might have been better termed “urban removal,” with thousands of commercial buildings and housing units bulldozed in the name of “slum and blight clearance.” The replacements were usually high-rise public housing like the infamous Cabrini Green Housing Project in Chicago and soulless windswept office plazas like the Empire State Plaza in Albany (Jane Jacobs prescient 1961 book, The Death and Life of Great American Cities is still relevant in understanding the implications of poor urban land planning). The planners either didn’t understand or didn’t care that the original residents would never return to the “decent safe and sanitary housing” (HUD lingo) or want to work in isolated office building “islands.”I grew up in the then Jewish immigrant trending African American Near Northside of Minneapolis, which was “blighted” but was actually a well-functioning urban neighborhood with plenty of inexpensive housing, shops, and a street-car line to downtown 10 minutes away. By 1960, the city had begun buying the properties for wholesale clearance, including our house. While my parents could have bought a house in a better part of the Northside, they bought a modest house further west to a working-class first-tier suburb. In his new book, Untenable: The True Story of White Ethnic Flight from America’s Cities, Jack Cashill analyses this urban-to-suburban migration.
  • Correct Point: The article argues that “failing metropolitan centres need creative solutions from the public and private sectors.” The resurrection of most downtowns and commercial nodes like Times Square in NYC in the 1980s from decades of decline took a combination of public funds in the form of grants and other subsidies and pioneering developers willing to risk capital. Around 1980, a pioneer developer tackled Times Square. The developer used city tax abatements and a HUD Urban Development Action Grant (UDAG) to renovate the dilapidated Commodore Hotel into the Grant Hyatt Hotel, just ahead of the 1980s economic boom. Cities can’t facilitate this kind of urban metamorphosis without private developers and developers won’t make risky investments without grants and subsidies. Like or it or not, this is how American cities come back from the dead, although it can take years or decades for this process to unfold.

Many American cities, large and small, are in some stage of the current Urban Doom Loop. This is due to a perfect storm including the COVID pandemic and work-from-home policies/lockdowns and an array of sudden and perhaps not well thought out public policy shifts like ending cash bail, reducing police budgets, allowing homeless encampments on streets and in parks, adopting the new Housing First approach to addressing homelessness instead of the traditional treatment first strategy, the flood of fentanyl and other drugs across the porous southern border, the tolerance of shoplifting and other crimes, and so on. Whatever the reasons one ascribes the current Urban Doom Loop to, it’s real. People, no matter how committed they are to urban living (I love big cities and am a fan of New Urbanism planning concepts), will flee unsafe and dirty streets, while businesses that become unprofitable will close or move, leaving vacancies.

In the face of the above, how will government policymakers and foundations respond? A typical response would be an avalanche of new federal, state, local, and foundation grants, not only for redevelopment and adaptive reuse of vacant office and retail buildings into affordable housing, but also for human services. As downtown economies falter, low-income and working-class residents will need more services at the same time as local tax revenues fall. We are currently in the Post-Covid Grant Wave with lots of funding for EVs, carbon reduction, advanced manufacturing, etc., but this won’t last because grant waves never do. We’ve seen this before and the Urban Doom Loop Grant Wave is approaching. Nimble nonprofits and local governments should be poised to take advantage of the new funding likely to emerge as the 2024 election approaches.

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Bad nonprofits: An unfortunate reality of charitable giving in America

I recently saw an article about “The WORST charities in America? These are the organizations giving over 90 PERCENT of donations to their fatcat executives – while ignoring their causes.” Anyone who’s worked with nonprofit organizations over time knows that, while most are reasonably honest and at least try to perform needed services, some aren’t.

Since 1993, we’re written grants for somewhere between 600 and 1,000 nonprofits across America. When a prospective nonprofit client calls for a fee quote, I can usually tell within a couple of minutes if the caller is a true believer (about 10%) or a more typical nonprofit. It’s much harder, however, to tell if the nonprofit is honorable, because nonprofit executives are skilled in the art of happy talk—a bit like Gríma Wormtongue in Lord of the Rings.

During initial calls, the prospective client is interviewing us, but to a degree we’re also interviewing them, since we try not to accept assignments from clients who are illegible applicants. Eligibility is almost always straightforward, but we also try to avoid scammers and scoundrels, which is much harder. A few times, callers have told us outright that they plan in effect to misuse the grant money.

Some of the red flags we look for:

  • The caller refers to their nonprofit as a “business” or “company,” or otherwise talk about their organizations as if they’re running a business that’s going to pay money out to its owners. Real nonprofit executives rarely use this sort of terminology, since nonprofits are not supposed to generate profit and there are no “shareholders” (excess revenue over expenses is usually termed “operating reserves” or “endowment”).
  • The Board of Directors has five or fewer members. While it’s possible to organize a 501(c)3 nonprofit will just a few Board members, they’re usually supposed to be “community-based,” so one expects to see a board of 7 – 11 members (odd numbers break tie votes). Tiny boards often enable the Executive Director to control the board by cherry picking compliant members. As we describe in the linked post, the Executive Director can run a nonprofit with this board structure like a small business without worrying about interference or a board coup.
  • The Executive Director admits that they own the nonprofit’s facility and lease it to the nonprofit. While not always technically illegal, this obviously raises self-dealing concerns.
  • The Executive Director brags about double or triple funders for the same client or service. For example, a substance abuse disorder (SUD) treatment provider might bill Medicaid and a specific grant or contract for the same service. This is a fairly common practice, but generally illegal and not discussed in polite company. Sometimes double-billing is the only way to provide effective services, but you’re not supposed to admit this to relative strangers.
  • The nonprofit is just straight up charging fees to its client for services rendered. I’m not talking about a Boys and Girls Club charging a modest, but waivable, fee to join a club basketball team, but rather something like a Board & Care home in effect stealing the client’s SSI payment and putting it towards “rent,” while providing little more that “three hots and a cot.” Some years ago, we had to terminate a retainer agreement with a nonprofit that was supposedly providing adoption counseling, but in reality was selling babies.

At least six Executive Directors of former S + A clients have gone to prison, usually federal, for various frauds and scams, though we only find this out when we happen to spot a news article or someone sends us the story, so the real number is likely higher. Let’s assume that under 1% of nonprofits are bad applies, but there are over 1.5 million American nonprofits, so even a 1% estimate results in tens of thousands of questionable nonprofits. Size isn’t necessarily an indication of honor, since our nonprofit clients range from mom & pop community groups to hospital chains with billions in annual revenue. The larger the organization, the greater the number of funders and potential for corruption. Why steal a small amount when you can steal a large amount?

While we attempt to identify potential scammers, it’s much harder to decide which nonprofits to donate one’s own money to. Some of my rules of thumb for personal philanthropy:

  • Don’t donate money to any organization that buys TV advertising.
  • Pick a type of charity that you’re familiar with. If you’ve had a relative struggling with addiction or homelessness, you’re likely already familiar with good local nonprofit providers.
  • Choose a charity with a local facility you can visit to meet the staff and possibly some of the clients. Mismatched office equipment or perfectly matched equipment doesn’t mean much, although if the equipment is super nice, ask how they got it. A scammer can fill their office with Goodwill rejects for show purposes, while a good nonprofit might have just received an in-kind donation from Steelcase of 20 new desks and chairs. If something doesn’t pass the smell test, ask.
  • Be wary of any organization that can “sell stuff out the back door.” This can range from re-selling donated computer gear that was supposed to go a after school program on eBay, or an animal rescue farm selling the occasional steer to McDonald’s.
  • If the donation is relatively large or your antenna has gone up, ask to see the nonprofit’s 990 Federal Tax Returns for the last few years, which among other things, should list salaries.
  • Consult Givewell.org
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Will we see involuntary confinement return, and what does that mean for mental health services grant writers?

The Atlantic has a long book excerpt titled “American Madness: Thousands of people with severe mental illness have been failed by a dysfunctional system. My friend Michael was one of them. Twenty-five years ago, he killed the person he loved most.” The story is about a brilliant man named Michael Laudor, who was also a schizophrenic and as a consequence of schizophrenia killed his pregnant fiancee while in the grips of delusion. The story is partially about what the author, Jonathan Rosen, calls “the wreckage of deinstitutionalization, a movement born out of a belief in the 1950s and ’60s that new medication along with outpatient care could empty the sprawling state hospitals.” Rosen says that:

During the revolutions of the ’60s, institutions were easier to tear down than to reform, and the idea of asylum for the most afflicted got lost along with the idea that severe psychiatric disorders are biological conditions requiring medical care. For many psychiatrists of the era, mental illness was caused by environmental disturbances that could be repaired by treating society itself as the patient

It turns out, however, that many psychiatric disorders are in fact biological conditions, rather than being caused by “environmental disturbances.”* The environment might exacerbate or mitigate some psychiatric challenges, particularly for things like psychopathy, but the psychiatric challenges remain. We’ve written grants for lots of mental healthcare providers that know how mental health challenges exist on a spectrum: someone with ADHD or many forms of depression might be addressable in a straightforward, outpatient manner, but schizophrenics and people suffering from other severe and persistent mental illnesses (SPMI, which is the current descriptor of choice in the grant writing biz) aren’t well suited to basic outpatient treatment. A lot of the online discourse around mental illness concerns people with issues that may be serious, but that are unlikely to result in fundamental breaks with reality, homelessness, and murder.

Rosen reports what I was discussing in the preceding paragraph—that some people don’t fit well into the outpatient model:

One problem was that nobody knew how to prevent severe mental illness; another was that rehabilitation was not always possible, and could only follow treatment, which was easily rejected. And despite having been created to replace hospitals caring for the most intractably ill, community mental-health centers, as their name suggested, aimed to treat the whole of society, a broad mandate that favored a population with needs that could be addressed during drop-ins

People with SPMI who aren’t involuntarily institutionalized often end up on the street, which is obvious to anyone who’s visited San Francisco, or parts of L.A., Denver, Seattle, or any number of other cities, which have been struggling with a combination of high housing costs, limited policing, and few tools to compel treatment. Rosen says that “The biggest improvements in people’s mental health can happen when they are involuntarily hospitalized, a psychiatrist who works with the homeless told me.” A lot of mental health services organizations and homelessness service organizations will admit as much in private—we know, because we’ve been on those calls—but they’ll almost never say so in public. Saying so is too incendiary, and too contrary to the hopeful messages of the ’60s, which still resonate in American culture today.

As a society, for various reasons, we’re not willing to have hard, honest conversations about tradeoffs and challenges. Freddie deBoer has a review essay of Rosen’s book that picks up these threads; he writes that “I look and look for some grappling with the messy, sad, sometimes tragic reality of mental illness in major media and I find nothing.” The reality is often not suited to the dominant narrative, and we’d prefer to ignore the reality. Foster family agencies are similar: they deal with issues that have no good answers and that most people would prefer not to think about. So most people don’t think about them.

Most people prefer not to think too hard about how to deal with SPMI, but reality can find its way through that preference to consider something else. Michael Laudor’s fiancee likely didn’t think she’d die by his hand, and preferred to think that she’d be okay, and that she could save him, when only medication, taken as scheduled, could. The severely and persistently mentally ill generally can’t be confined for more than a few hours or days until they commit a serious crime, even if their journey towards serious crime is evident to their loved ones.

We don’t yet know what happened to Cash App founder Bob Lee, who was murdered on the streets of San Francisco, but chances are SPMI played a role. It’s likely that his murderer, if he’s found, will have a long criminal history as well. The proximate cause will likely be something crime-related, or related to that particular day’s episode, but the ultimate cause will in part be that “dysfunctional system” Rosen writes of. Emergency rooms and police officers aren’t alone going to fix the system we have. Not even federally qualified health centers (FQHCs) and other kinds of behavioral health services providers will, or can. They can be part of the solution, but a big part of the solution has to be something we’ve not been willing to countenance since the ’70s. The alternative is the status quo: more Bob Lees and more murdered girlfriends. While Americans sort this out, the failure to deal directly with SPMI is contributing to the rapid decline of the quality in many cities. While San Francisco and Seattle are very beautiful, many folks will likely think twice before venturing to either for a vacation or conference, as they think: “who needs the risk?”

* Very few people today take Freud seriously, except as a storyteller, for obvious reasons.

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Depressing NAEP math and reading assessments provide grant-writing opportunities for nimble nonprofits

Despite the media’s fascination with irrelevancies like the Kardashians and moment-by-moment interpersonal political drama, many outlets at least partially covered the disastrous recent National Center for Education Statistics (NCES) Report on the 2022 4th and 8th Grade Math and Reading Assessments.* The Report says:

Between January and March 2022, the NAEP mathematics and reading assessments were administered to representative samples of United States fourth- and eighth-grade students. [. . . ] Student academic achievement during the COVID-19 pandemic is compared to pre-pandemic performance on the 2019 NAEP assessments as well as to previous assessments dating back to 1990.

In 2022, the Report finds (the next six bullets come from the Report):

Mathematics

  • The average fourth-grade mathematics score decreased by five points and was lower than all previous assessment years going back to 2005; the average score was one point higher compared to 2003.
  • The average eighth-grade mathematics score decreased by eight points compared to 2019 and was lower than all previous assessment years going back to 2003.
  • Fourth- and eighth-grade mathematics scores declined for most states/jurisdictions as well as for most participating urban districts compared to 2019.

Reading

  • The average reading score at both fourth and eighth grade decreased by three points compared to 2019.
  • At fourth grade, the average reading score was lower than all previous assessment years going back to 2005 and was not significantly different in comparison to 1992.
  • At eighth grade, the average reading score was lower compared to all previous assessment years going back to 1998 and was not significantly different compared to 1992.
  • Fourth- and eighth-grade reading scores declined for most states/jurisdictions compared to 2019.

Take a few minutes to read these bullet points again. It’s widely recognized that, if a student can’t read at grade level in 3rd grade, the likelihood that they will not graduate from high school (and may become functionally illiterate adults) goes way up. America’s increasingly information-based economy demands workers with at least an understanding of high-school-level math. No one is going to become a coder without algebra skills. On the other hand, the Bureau of Labor Statistics (BLS) shows that many fast-growing jobs require few reading and math skills—some of those jobs being cooks, for example. And the fields with the most new jobs include “Home health and personal care aides” and ” Waiters and waitresses.” These sorts of jobs, however, usually don’t pay living wages (or barely pay them) and have very little career ladder potential.

Still, although the COVID-era learning losses are bad, they also imply opportunities for nonprofits interested in after-school and tutoring efforts. While there’s already lots of federal, state, local, and foundation funding for educational enrichment programming, there’ll likely be much grant funds for this purpose soon, as reality sinks in.

So, if your nonprofit works with at-risk youth** or wants to, the coming months will be a great time to seek funding for after school and/or tutoring programs. For example, the state of Arizona just announced a second year of funding for the OnTrack Summer Camp, which provides educational enrichment for over 70,000 school-age kids. The OnTrack Summer Camp website states: “With over $100 million from the American Rescue Plan Act ready to fund engaging Summer Camp experiences, school leaders, educators, and youth service providers like you can apply for AZ OnTrack funding so parents in your community have a trusted place to send their students for up to 8 weeks of educational opportunities.” Translated into English, this means Arizona nonprofits can apply for grants to provide these services.

These kind of RFP opportunities will be popping up all over America soon, not just Arizona. Some of the money will come from long-standing federal pass-through to states programs like 21st Century Community Learning Centers (21st CCLC) Program and the Title I Supplemental Educational Services (SES) Program, while other funding will come from COVID-era programs like ARP. Expect some new programs, too. Make sure your agency gets on the mailing/email lists for your state department of education, municipality, and school district—and start knocking on community foundation doors. The last time there was a flood of money into educational support programs was during the Clinton era, and the early days of the George W. Bush Administrations, which overlap almost perfectly with the 30 year timeframe of educational stagnation highlighted by the NAEP report.

* The “media” is also a machine for responding to reader incentives, so if articles about banal interpersonal dramas do well, the media produces more of them. Look in the mirror, and see if that the enemy is there. This is also true of voting, by the way.

** The current politically correct phrase for “at-risk youth” is now “opportunity youth,” if you like that euphemism better.

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The effects of early childhood education programs don’t look good: a large, randomized pre-kindergarten study

There’s a large, new study out on the “Effects of a statewide pre-kindergarten program on children’s achievement and behavior through sixth grade,” and it’s important and unusual because of its results: it finds that pre-k education doesn’t help later educational or behavioral achievement and, if anything, hurts later student achievement. This study is also significant due to its comprehensiveness; the study follows 3,000 kids, who appear to be randomly assigned to pre-k services or not, and the study follows those kids for a long period of time—at least seven years, it seems, and possibly longer. I’ve not got the full manuscript yet but am seeking a copy. Most education studies are observational, in that they observe two or more cohorts, but they don’t use randomized controls, like this one does, and observational studies are particularly prone to bias. The new study is also pre-registered—that is, the authors say what they’re looking for, what success looks like, and how they’re going to measure success before they get their data. There’s a “replication crisis” in social science and medicine, because it’s possible to torture a positive result out of all sorts of data, and this study avoids most if not all of the common pitfalls.

The study’s abstract says:

Data through sixth grade from state education records showed that the children randomly assigned to attend pre-K had lower state achievement test scores in third through sixth grades than control children, with the strongest negative effects in sixth grade. A negative effect was also found for disciplinary infractions, attendance, and receipt of special education services, with null effects on retention

Wow: that’s counter to the intuition of most people, politicians involved in early childhood education, and “common wisdom.” The study is not the last word—no study is—but it is persuasive. For most practitioners, this won’t be immediately relevant, because Head Start and Pre-K For All aren’t likely to see real changes in the near term. But we may see the political winds change over time.

This post is not a policy recommendation: as grant writers, we don’t do policy recommendations, although I do think a lot of students are in college who’d be better served by alternatives, and yet society as a whole hasn’t yet figured that out or properly grokked it, even as total student loans owed passes $1 trillion. But, if America wants to do some form of daycare for all (“universal daycare”), as is proposed in the stalled Build Back Better legislation, that’s a fine goal and we should call it that, instead of pretending it’s possible to have academic, “educational” experiences for the vast majority of kids under the age of five. Four-year olds are not falling “behind,” because, except in the case of unusual prodigies, there is nowhere to fall behind. If anything, excess regimentation and premature optimization are likely to be bigger problems than “falling behind.”

I’ve long been somewhat suspect of early childhood “education”—not from studies per se, but from being around small children. Most don’t have the executive function to do much in the way of what might be called “education.” Trying to create “education” in the sense that we see with older kids or adults seems improbable for very young children. The veneer of “education” using “curriculums” like “The Creative Curriculum” and “The Creative Curriculum GOLD” that we cite in grant proposals seems faintly ridiculous; whether or not a four-year old can identify different kinds of leaves or songs or animals by name doesn’t seem to indicate how that four-year old will do in middle or high school, or college. But there’s a lot of social and economic anxiety around class, economic achievement, and housing; we’ve collectively adopted policies focused on creating scarcity, not abundance, and that’s resulted in intense, and probably pointlessly intense, competition in many fields.

Trying to indoctrinate small children into social, academic, and economic competition culture seems difficult to me, and yet that’s been one response to scarcity policies. Making early childhood teachers, who are really more like caregivers in the classroom, have degrees or advanced degrees seems like a way of raising the cost of childcare without providing much in benefits; everyday human experience seems to be sufficient for taking care of small kids. Maybe small kids are learning cultural markers and such in the early early childhood education setting that will help them later, but, if so, that later help isn’t showing up in the data. There’s a lot of desire to make education a panacea for various kinds of social and economic inequality, but that desire keeps running up against uncomfortable ideas (I won’t call them “truths,” although some might).

Head Start was launched in 1965 as on the initial programs in President Johnson’s “War on Poverty;” if there’s been a large boost in real educational attainment (which is different from “degrees achieved”), I’ve not seen it. I’ve been teaching college undergrads since 2008, and in that time my anecdotal impression is that smartphones and social media have been net bad for learning, noting however that some people do leverage Internet technologies to learn more and faster than they could without. Anecdotes are not data, but, since the late ’90s and early ’00s, we here at Seliger + Associates Grant Writing have been writing proposals for programs like the 21st Century Community Learning Centers (21st CCLC), and in that time we’ve not seen learning substantially improve from the dissemination of computers and the Internet. In 2013, I wrote a post about a pair of studies finding that computer access appears, if anything, to lower educational attainment. In 2015, I wrote about Kentaro Toyama’s book Geek Heresy: Rescuing Social Change From the Cult of Technology. “Computers in education” is not the same thing, obviously, as early childhood education, but both are attempts at improving education and life outcomes that are popular but may not be efficacious. If you work in the education industry with students ages 10 or higher—ages old enough for smart phones to have penetrated the population—ask those around you to look at their Apple “Screen Time” app or Android “Digital Wellbeing” controls. Those show how many minutes or hours a day a smartphone is being used, and what a person is doing on that phone. From what I’ve observed, very few people are using the book apps, the Duolingo systems for language learning, or Anki for space-repetition learning. Ask around, see what you find. Think about what that might mean.

Real education is hard. I’ve tried to impart some to students. Probably it’s always been hard and always will be. We should collectively try to do better while also understanding what might be limited, what might be futile, and what might be counterproductive. I’m struck by, at the college level, how little time is spent trying to learn how to teach more effectively, and friends who teach in K – 12 often report the same.

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Smash-and-grab robbery epidemic, economic development, and grant writing

There seems to be a growing smash-and-grab flash mob phenomenon, which is being widely reported in the media, with the practice starting in California, New York City, and Chicago and now spreading to other places like Minneapolis. These highly organized attacks are presumably being instigated by gangs of some sort; while most media accounts discuss police action or inaction, this post focuses on the likely disastrous outcomes for low-income communities—while offering a glimmer of hope for nimble nonprofits.

Before I set up Seliger + Associates in 1993, I worked for about 15 years in redevelopment, mostly in low-income African American neighborhoods, starting as a community organizing* college intern for the Minneapolis Housing and Redevelopment Authority in North Minneapolis, and later for four years as Economic Development Manager for the City of Lynwood and eight years as Redevelopment Manager for the City of Inglewood** in South Central Los Angles. I know first hand how hard it is to get developers to build retail facilities in low-income communities, and it’s harder still to get large chain retailers to open stores and operate them over the long term. You can ignore the social justice slogan virtual signaling of large corporate tweets or marketing, and pay attention to what they do in the real world, which is to largely avoid investing in low-income communities. Corporations work to appeal to their customers’ sensibilities, and most customers aren’t closely following the minutia of what a corporation really does, as opposed to what its marketing implies.

While it’s been interesting to read stories and watch videos of dozens of masked looters descending on high end stores like Nordstrom’s and Louis Vuitton, one smash and grab incident hit home to me: the CVS drug store in the Vermont-Slauson Shopping Center in South Central Los Angeles. I think this was the first shopping center built anywhere in South Central after the Watts Rebellion in 1965, and it was a remarkable achievement, because the few retailers that existed in South Central in 1965 fled as part of the overall “white flight” phenomenon after the rebellion. The Vermont-Slauson Economic Development Corporation, the nonprofit that developed the Center, was one of Seliger + Associates’ first clients, and I spent many afternoons in the office of then-Executive Director, Marva Smith Battle-Bey, a wonderful and dedicated woman who passed in 2016.

When I worked in Lynwood and Inglewood from 1978 to 1990, there was not a single chain drugstore in either city, and I wasn’t able to recruit any—despite years of trying and dangling huge redevelopment incentives. With the exception of making a deal in Inglewood for the first Price Club in the LA area (Price Club later merged with Costco), it proved impossible to attract national retail brands. In Lynwood, I reached out to the national real estate manager for K-Mart, then the dominant US big box retailer, to see if K-Mart would take over a vacant department store in the city. This guy listened to my pitch and said: “We know Lynwood. You could build the store, give it to K-Mart free, and we wouldn’t operate it.” When I was in Inglewood, the now now-defunct company Circuit City popped up as one of the first national “category killer” retailers. I found their national real estate manager and again made my pitch. He said: “We’ve already looked at Inglewood. You don’t have the demographics for a Circuit City”—meaning, too many poor black residents. That’s how hard economic development and redevelopment can be. Arguably, online delivery has alleviated some of these challenges, much like Uber and Lyft alleviated the some of the risks of trying to hail a taxi while black, but they’re still present and with us.

If this smash and grab epidemic continues, CVS and other national retailers will close their stores (Walgreens has already closed 18 stores in San Francisco, which, for the most part, isn’t low income, but it also doesn’t enforce or prosecute shoplifting) in low-income communities and flee to the suburbs, exurbs, and cities perceived as having strong law enforcement. This will especially hurt low-income folks in places like California, New York City, and Chicago that have effectively legalized shoplifting, or, in its organized form, flash mob looting. The stage is being set for the emergence of “pharmacy and retail deserts” to join the food deserts that we often include in our grant proposal needs assessments. Grant writers, take heed.

Still, the rapid assault on retailers may have some positive impacts for nimble nonprofits and grant writers: as drug stores and other retailers flee, the shopping centers and stand-alone stores will remain. These will present opportunities for nonprofits to seek grants for adaptive reuse as affordable housing, lower end retail (flash mobs are less likely to do a smash and grab at a Dollar Store or Old Navy), or community centers/human services providers like FQHC satellite sites (we wrote a funded grant years ago to convert an abandoned shopping center into a youth center in Milwaukee).

Also, anyone seeing the videos knows the looters are what we call in the grant writing biz, “at-risk vulnerable youth and young adults.” This presents a great needs assessment argument for any youth services project concept, including workforce development. For example, the DOL just issued the FY ’22 RFP for YouthBuild and we’ll include the smash and grab trope in the needs assessment for any urban YouthBuild proposals we write this year.

This situation also illustrates the importance of nonprofits and grant writers paying attention to emerging bad news in American society. Before opioid funding for medication-assisted treatment (MAT) became common from HRSA and SAMHSA, for example, news articles began describing what was happening on the streets. Most disasters, natural or manmade, mean new grant opportunities on the horizon. The feds, states, and large cities/counties will soon respond to the smash and grab crisis by issuing RFPs for both economic development (likely through the recently passed Infrastructure Bill) and youth supportive services. The lyrics of one of the great songs in West Side Story will give you the outline for your needs assessment for a youth services proposal to counter flash mobs: “Gee, Officer Krupke, we’re very upset; We never had the love that ev’ry child oughta get. We ain’t no delinquents,We’re misunderstood. Deep down inside us there is good!”

* Like President Obama, I was trained as a Saul Alinsky community organizer and worked as a community organizer for a year.

** This was not the gentrifying “new Inglewood” of a billion-dollar stadium for the Raiders and Chargers; this was the old Inglewood of Tupac’s “California Love:” “Inglewood, always up to no good.”

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COVID-19, donations, and foundation and government grant proposals

We’ve been in business since 1994 and have written proposals during several economic shocks; in the Great Recession in 2009, donations to nonprofits began drying up as soon as the stock market began diving (we wrote as much at the time). A decade later, COVID-19 is sending the economy into what could be a second Great Depression. While hopefully the crash will be v-shaped, there’s no way to know when a rebound will start, since much depends on the public’s response and on the success or failure of the drugs in clinical trials.

Nonprofits, and especially human services providers, are being torn between higher service demands and evaporating revenue. Particularly hard hit are Federally Qualified Health Centers (FQHCs); about 1,400 FQHCs deliver front line healthcare to Medicaid and other low-income patients. Total patient population estimates differ, but FQHCs may serve as many as 30 million people. FQHC CEOs have been telling us they have very limited capacity for treating infectious disease patients (no separate waiting rooms, scarce protective gear, etc.) and face staffing shortages, because clinicians staying home to watch their now out-of-school children. Some clinicians are pregnant and some are sick themselves. Inadequate testing infrastructure has been well-covered in the media by now.

Some nonprofits, like Head Start and other early childhood education providers or behavioral health service providers, face the same grim reality, as their centers are closed and third-party payments become delayed or non-existent. For other nonprofits that depend on donations, fundraisers, and/or membership dues (e.g., Boys and Girls Clubs, YMCAs, museums, performing arts, etc.) are likely even worse off. John Macintosh just wrote in the NYT that COVID-19 could mean extinction for many nonprofits. But this extinction can be averted—and will be by nimble nonprofits.

For the short term, nonprofits should stop or reduce screaming empty bowl-in-hand emails and mailers for donations. With the stock market in free-fall and unemployment probably already 10% and on a path to 20% *barring a sudden drug trial that works), seeking donations is delusional. When businesses, small and large, suddenly have zero revenue, millions are being laid off, and 401Ks being decimated, donations will quickly decline, no matter how good the cause or the relationship with the donor. Also, there’ll be no galas, art auctions, and other fundraisers for who knows how long.

The only real option for most nonprofits is to quickly ramp-up grant seeking and grant writing. As has been the case in previous economic crises, the federal response will likely be to dump money into grant programs and issue RFPs. In addition to already authorized FY ’20 federal funding for grant programs, by this week Congress will have passed three huge COVID-19 stimulus bills totally close to $2 trillion—dwarfing the 2009 Stimulus Bill. These bills will have a lot extra money for existing programs, as well as for a flock of new grant programs.* We saw this in 2009, when we wrote proposals for all kinds of oddball programs and projects, and this will unfold again with astonishing speed. Federal agencies will approve grant proposals much faster than usual—like most Americans, the federal bureaucracy rises from its normal stupor to meet extreme challenges. But RFPs are likely to have very short deadlines. Nonprofits that start preparing for intense grant writing will be more likely to succeed.

Most foundations, meanwhile, respond to crises like this by quickly increasing the amount of funds available from their endowments and speeding up their normal approval processes, both to address issues related to the crisis, as well as to keep essential nonprofits operating. In addition to emergency operating support, foundations will be very interested in project concepts relating to primary care access, public health education and outreach, telehealth, and behavioral health. But this foundation response won’t last more than about six months. At some point, they’ll turn off the spigot, either because their endowments will have been depleted too much or the crisis will have passed.

Even nonprofit royalty, which usually don’t sully their hands will grant writing, unless the grants are wired, know that reality has changed.** You may have read, “Met Museum Prepares for $100 Million Loss and Closure Till July.” The author reports that the Met will be “fundraising from foundations and pursuing government grants.” If the Met is turning to grant writing, so should your nonprofit and the sooner the better.

Want to talk about how Seliger + Associates can help? Give us a call at 800.540.8906 ext.1. By the time you read this, your organization’s leadership will probably already be convening meetings about what to do next.

* Extraneous program authorizations in federal spending bills are common and referred to as “ornaments.”

** As Bob Dylan put it in Things Have Changed, “People are crazy and times have changed.”

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Do “child-care deserts” highlighted in the Washington Post really exist?

The Washington Post says, “A Minnesota community wants to fix its child-care crisis. It’s harder than it imagined.” Duluth City Councilperson Arik Forsman wants to solve the “region’s child-care crisis” and the reporter, Robert Samuels, vaguely cites “studies [that] have shown… more than half of the country lives in a child-care desert — places where there is a yawning gap between the number of slots needed for children and the number of existing spaces at child-care centers.” The link in his story leads to the highly partisan Center for American Progress website, which defines a child-care desert crisis using cherry-picked data to fit this definition: “any census tract with more than 50 children under age 5 that contains either no child care providers or so few options that there are more than three times as many children as licensed child care slots.”

Numerous rural census tracks are likely not to have any child-care providers, due to vast travel distances and low population density, but could still meet the low bar of 50 young children. The second part of the definition presupposes that most parents want to place their child in child-care, ignoring the reality that there still lots of people who don’t want their child in institutionalized child-care—they have one parent who stays home or who works at home (like I did when my kids, and S + A, were young). Some parents prefer to use family and friend networks. The cost of providing child-cage to infants and toddlers is very high—imagine trying to care for 30 kids, who are not potty-trained, and go on from there.

The “crisis” is based on specious data collected to make a political point, not address the actual issues. I know because we write lots of Head Start, Pre-K For All, and similar proposals under the umbrella of “early childhood education,” which is the theme for almost all child-care grant programs. Head Start is by far the largest publicly-funded early childhood education program and emphasizes “education.” Government funders always insist that child-care providers, including Early Head Start (birth – 3), focus on “education” rather than the custodial care model that largely disappeared 30 years ago. It officially disappeared; in reality, most children under age five are mentally equipped for play far more than they are for educational activities. Still, when we write a child-care/early childhood education proposal, we always state that the program will use the ever-popular “TeachingStratgies Creative Curriculum.” In this curriculum, even very young children are supposedly taught things like “pre-reading” (whatever that is) and other quasi-academic subjects. The typical “class schedule” for child-care programs, however, includes maybe two out of eight hours in alleged academic activities, with the rest of the day devoted to things like welcome and closing circles, snacks and lunch, hand-washing, nap time, outdoor/indoor play, etc.

Many contributing factors that come together to limit child-care options: just like with the affordable housing/homelessness crisis, much of the shortage of child-care slots is due to basic zoning rules (a topic we have covered extensively), as well as strict licensing requirements. In the abstract, most people support the idea of convenient child-care—until an actual facility is proposed down the street, and then existing residents think about 60 frisky kids whooping it up on their block, with fleets of parents dropping-off and picking-up kids. This type of proposal brings out the NIMBYs in force. They will use zoning to fight this “blighting” influence—and will usually win.

Also, ever since the hysteria over the fake McMartin Preschool abuse scandal in 1983, child-care facility regulations, even for home-based child-care, have become very stringent. While likely a good thing overall, this drives up the cost of operating child-care facilities. Even Head Start programs, which are fully federally-funded, have a hard time opening new facilities and keeping them open. All child-care programs, whether for-profit or non-profit, operate on thin margins and can be sunk by regulatory problems.

Then, there’s the challenge of finding and keeping “teachers.” Since Head Start was created in 1965, the open secret has been that it’s as much of a jobs program as an early childhood eduction program. The teachers, who might have a certificate of some sort but are rarely licensed teachers, are often the same moms who put their kids in the program, creating a sort of closed-loop system.

This worked fairly well until a perfect storm recently hit. As we wrote about in early 2019 “The movement towards a $15 minimum hourly wage and the Pre-K For All program in NYC,” this effort spells trouble for all child-care programs—the Minnesota minimum wage rises to $10/hour on January 1, 2020 and is set to rise to $15/hour by 2022. Staff costs make up the vast majority of child-care program budgets and rapidly rising minimum wages mean higher fees for parents, and they require larger public subsidies (which are not available in most municipalities). Ergo, it’s much harder to open a child-care facility and keep it open, even if qualified staff can be found. With an unemployment rate of less than 4% in the Duluth area, good staff are hard to find.

In related news, “Government Standards Are Making 5-Year-Olds and Kindergarten Teachers Miserable.” It seems that the bureaucrats who make these decisions have never interacted with actual human five-year-olds.

Nonetheless, we’re delighted to add the concept of child-care deserts to the equally ephemeral “food deserts” concept we often use in proposals. In grant writing, it’s not possible to have too many Potemkin deserts to add color to otherwise drab needs assessments. And many funders are more excited about solving marginal problems than real ones, like regulatory overreach and zoning.

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Coding school is becoming everyone’s favorite form of job training

For many years, construction skills training (often but not always in the form of YouthBuild) was every funder’s and every nonprofit’s favorite form of job training, often supplemented by entry-level healthcare work, but today the skill de jour has switched to software, programming, and/or coding. Case in point: this NYT article with the seductive headline, “Income Before: $18,000. After: $85,000. Does Tiny Nonprofit Pursuit Hold a Key to the Middle Class?” While the article is overwhelming positive, it’s not clear how many people are going to make it through Pursuit-like programs: “Max Rosado heard about the Pursuit program from a friend. Intrigued, he filled out an online form, and made it through a written test in math and logic…” (emphasis added). In addition, “Pursuit, by design, seeks people with the ‘highest need’ and potential, but it is selective, accepting only 10 percent of its applicants.” So the organization is cherry-picking its participants.

There’s nothing wrong with cherry-picking participants and most social and human service programs do just that, in the real world. As grant writers who live in the proposal world, we always state in job training proposals that the applicant (our client) will never cherry-pick trainees, even though they do. In the article, important details about cherry-picking are stuck in the middle, below the tantalizing lead, so most people will miss them. I’m highlighting them because they bring to the fore an important fact in many social and human service programs: there is a tension between access and success. Truly open-access programs tend to have much lower success rates; if everyone can enter, many of those who do will not have the skills or conscientiousness necessary to succeed. If an organization cherry-picks applicants, like Pursuit does, it will generally get better success metrics, but at the cost of selectivity.

Most well-marketed schools succeed in “improving” their students primarily through selection effects. That’s why the college-bribery scandal is so comedic: no one involved is worried about their kid flunking out of school. Schools are extremely selective in admissions and not so selective in curriculum or grading. Studies have consistently suggested that where you go to school matters much less than who you are and what you learn. Such studies don’t stop people from treating degrees as status markers and consumption goods, but it does imply that highly priced schools are often not worth it. Thorstein Veblen tells us a lot more about the current market for “competitive” education than anyone else.

My digs at well-marketed schools are not gratuitous to the main point: I favor Pursuit and Pursuit-like organizations and we have worked for some of them. In addition, it’s clear to pretty much anyone who has spent time teaching in non-elite schools that the way the current post-secondary education system is set up is nuts and makes little sense; we need a wider array of ways for people to learn the skills they need to thrive. If Pursuit and Pursuit-like programs are going to yield those skills, we should work towards supporting more of them.

It is almost certainly not existing schools that are going to boost more people into the middle class, as they’ve become overly bureaucratic, complacent, and sclerotic; see also Bryan Caplan’s book The Case Against Education on this subject. While many individuals within those systems may want change, they cannot align all the stakeholders to create change from within. Some schools, especially in the community-college sector, are re-making themselves, but many are not. In the face of slowness, however, nimble nonprofits and businesses should move where this grant wave is going.

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Earmarks could come back: That’s great news for governance and nonprofits

I was wrong about earmarks.

Like a lot of good-government types, I opposed earmarks (which are sole-recipient funds to specific organizations allocated by Congress) and thought earmarks were a sign of brazen corruption, like cash kickbacks from vendors to mayors. I didn’t oppose earmarks out of greed, although earmarks can be seen as bad for grant writers because any funding that’s earmarked isn’t available for grant-funded competitions—I saw them as basically immoral. Corruption is bad, so we should get rid of it, right?

But banning earmarks was (and is) a cure worse than the disease. Without earmarks, congressional leaders have limited tools to discipline members of their caucuses. Members are free to grandstand, vote on principle, and block useful legislation in order to pander to primary voters, rather than general election voters. You, dear reader, may initially think it’s good to vote on principle—as long as the principle is one you uphold. But when it isn’t one you uphold, you’ll likely be angry. You’ll also be angry when Congress seems incapable of acting. Because of the way the United States is structured, there are many intentional chokepoints for legislation, and it’s much easier to block than pass legislation. As parties have become more polarized, we’ve gotten increasing legislative gridlock.

Without earmarks, voters have no incentive to vote for pragmatists who will bring the pork their district. Instead, they can vote for extreme partisans who engage in a lot of symbolic talk and votes without considering what’s really good for the country. When congressional leaders have earmarking power, grandstanding has a real consequence. When congressional leaders don’t have earmarking power, they can’t keep their caucus together and it’s much harder to cobble together the 60 votes needed to pass most anything in the Senate. In Congress, pragmatism is actually better than purity, but we’ve seen increasing ideological purity at the expense of a functioning country.

This is a post, not a book, so I can’t go into great detail about why and how this happens, but The Myth of the Rational Voter is a good place to start. I can say, however, that earmarks improve the incentives on legislators to cut deals and make sure the government can do something—anything, really.

Beyond high-minded principles, some nonprofit and public agencies will also be able to receive earmarks again. Pursuing earmarks isn’t in the scope of our business practice, but it is a useful thing to note.

This article, from 2016, gives some more earmark context on earmarks. This article, gives more context. Here’s a good Tweetstorm.

Note that no one is arguing that earmarks are perfect or that the process is without defect. When I’ve argued the case for earmarks to politically minded friends, they’ve told me that I’m a craven tool of corporate interests (let’s ignore the logic of that for the time being and just view it as a signaling mechanism). But earmarks are better than no earmarks; sometimes bad is an improvement over even worse. We’ve seen what happens to the quality of federal governance without earmarks to discipline congresspeople. It isn’t good. Bring ’em back. I admit publicly that I was wrong.

Here is an argument against earmarks, which I don’t find persuasive for reasons listed in the paragraphs above, but it is a reasonable view.