Tag: Economics

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Time Banks, Barter, Community Gardens and More: Economic Misery Provides Opportunities for Nimble Nonprofits

As we’ve written about before in “What Budget Cuts? The RFPs Continue to Pour Out,” “One, Two, Three* Easy Steps to Start-Up a Nonprofit Upstart,” and “Grant Writing from Recession to Recession: This is a Great Time to Start a New Nonprofit,” the Great Recession and continuing economic malaise present tremendous grant opportunities for nonprofits—provided they are fleet of foot and keep their eye on the prize.

The Wall Street Journal’s “For Spain’s Jobless, Time Equals Money” offers a case on point. The story details self-help efforts by desperate unemployed Spaniards, particularly those in their mid-20s to mid-30s (their unemployment rate is over 50%, which is similar to that of African American young adults), to overcome jobless and essentially cashless lives. In addition to the ever popular community gardens and direct barter systems (“I’ll give you a chicken for a haircut”),* these efforts include time banks.

A time bank is essentially a formalized barter system in which hours worked or stuff provided by one member are quantified and “banked” to be used in exchange for goods or services from another member. Thus, if you have a chicken and need a haircut, you don’t have to find a hungry barber. Rather, you find another member who wants a chicken, get credit for the transaction, and spend the credit with a member who is a barber. The barber gets credit for the haircut and uses it to have his scissors sharpened.

The article cites other permutations of barter systems, including gardening co-ops, in which people garden together and trade their labor for shared produce. Free stuff exchanges, which are easily facilitated by social media, are also becoming popular. At itinerant locations, like somebody’s basement or an actual storefront, people bring piles of stuff they don’t want in order to pick through piles of other people’s stuff they might want, all without exchanging money. The ultimate expression of these ideas is to develop locally accepted script that takes the place of currency, a concept that bloomed in America during the Great Depression (“Hoover Bucks”).

Some or all of these make dandy project concepts for foundation grants—particularly for organizations working in extremely disadvantaged communities. As we’ve written about before, grant writing is largely the art of telling funders what they want to hear. Any of these time bank or barter-style ideas will warm the stone-like hearts of foundations with preconceived notions of how services should be delivered to the poor folks—through methods like sweat equity, bootstrapping, using local resources to reduce carbon footprints, and the like. A thousand programs and communes have been started with similar ideals, but why not begin a few hundred more?

Although ideas about time banks and bartering spring to life when the economy is sufficiently rotten, to most funders barter and self-help projects will seem like new ideas if they’re pitched carefully. In taking these project concepts and running with them, you’ll keep your staff busy, build neighborhood social infrastructure, and you might even help a few people in need.

While the trend toward time banks, barter, co-op gardens, free stuff exchanges, and the like help keep people afloat, they are of course disastrous for a modern, currency-based national economy, which is underpinned entirely on people being willing to accept pretty pieces of government issued paper for their labor. It also makes tax collectors unhappy, since the vast majority of these transactions are “off the books,” even though the value is supposed to be reported.**

* Even Seliger + Associates has bartered before. When we were starting out about 20 years ago, we had little money for equipment and were struggling to make do with a single PC and its 12-inch screen. But a computer recycling nonprofit appeared, and we traded grant writing services for a couple of somewhat out-of-date but serviceable PCs with luxurious 15″ monitors. About 12 years ago, I came across a party company run by a fellow who also had a nonprofit on the side that worked with at-risk kids. At the time, I had teenage twins, so we traded grant writing services for a party—which is surely a one-time trade in the annals of barter. And, yes, I reported the value of goods and services received on my tax returns. I’m still open to the idea, if someone has an interesting trade to make. Grant writing for a Porsche 911, anyone? Send me your ideas and maybe a trade can be made.

** For a great description of how the underground economy works in poor communities, see Sudhir Venkatesh’s seminal Off the Books: The Underground Economy of the Poor.

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Tilting at Windmills and Fees: Why There is no Free Grant Writing Lunch and You Won’t Find Writers for Nothing

People often find Grant Writing Confidential by searching for terms like “commission only grant writers,”* “free grant writers,” “free grant writing,” or variations on those themes. I see such queries in our blog stats every week, so I’ll address these anonymous multitudes now: in grant writing, you’re likely to get what you pay for. Caveat emptor. Others find us by searching for “free examples of written grants.” Those seeking example grants shouldn’t use them, both because the writing is probably of low quality and, even if it isn’t, if one person can find them, so can everyone else—readers aren’t likely to be amused by three proposals all cribbing from the same source. Buying papers for college assignments exposes the lazy or indifferent student to the same manifold dangers.

The cliché goes, there is no such thing as a free lunch. In grant writing, many snake-oil salespeople of various stripes want to entice you with promises of vast quantities of free money that turn out to be nothing but a mirage. For example, you may have seen infomercials for Matthew Lesko, the doofus dressed in a question mark-covered suit who touts billions of dollars for the average guy. Think about it logically: were there really this vast flow of money out there, wouldn’t everyone be seeking or taking it?** The story doesn’t pass the credulity test.

Free grant writing services don’t exist either. In looking for them, you’re wasting time. As with most services, you have three choices: pay a professional, learn how to do it yourself, or hope your sister marries a grant writer who wants to ingratiate himself with you. The first costs in monetary terms, the second in time terms, as well as being impossible for some people, and the third is just thrown in to illustrate the absurdity of the proposition. Notice that all three options have costs.

Even if someone did write high-quality, free proposals, they’d be so swamped by nonprofits seeking their services that they’d probably have a backlog stretching far into the future—certainly further than any live RFP. As a result, they wouldn’t be of any use to you, meaning that you’ve once again substituted time for money, just in a different sense. All this would be obvious to readers of Greg Mankiw’s excellent and surprisingly readable textbook, Principles of Economics, which deals with many of these issues and provides attractive graphs of supply and demand to boot.

In this case, a competent grant writer offering free services would have far more takers than she has time, creating a shortage situation where the quantity of time available is less than the number of people who want to use that time. The Soviet Union discovered the hard way that goods and services without prices tend to produce sub-optimal outcomes, and I’m sure that most seekers of anything for nothing, including grant writing services, will find the same.

The search for “free grant writing training,” and variations on that theme is both more and less pernicious. Free grant writing training is about as likely to materialize as free grant writing, but since grant writing training is probably useless to begin with, as Isaac discussed in “Credentials for Grant Writers—If I Only Had A Brain,” you won’t actually be losing much outside of your time, and you won’t be paying for bogus training. On the other hand, you’ll still be wasting your time, as you’d be better off paying for a journalism or English course at your local community college than you would with grant writing training, no matter the cost. Free grant writing training would lead to the same quality problems as free grant writers.

That’s the theory, anyhow, and the manifestation of that theory appears when people search for free grant writers. They’re never going to find those grant writers, and even if such grant writers are found, they won’t be very good, and even if they were, they wouldn’t be accessible. It would probably be more effective to focus on alchemy and through that invent a way to transmute base metals into gold and then sell that gold to fund the nonprofit.

Given that the history of humanity is one of credulous people being hoodwinked or duped by their own false hopes with the assistance of charlatans, I’m not expecting this post to stop many from searching for the philosopher’s stone, a cousin of alchemy. This post does at the very least explain why the quixotic search for free grant writing help will prove futile.

* Fewer discover us using the terms more common to grant writers, like “contingent fee,” demonstrating perhaps the knowledge of those involved; last time I searched for “contingent fee grant writers,” every hit in the top 10 on Google explained why this is a bad idea or why the grant writers in question wouldn’t or shouldn’t do it, including us. Other nomenclature problems exist in queries: the person who sought “free grant writing attorneys” doesn’t get legal jargon right, as attorneys who donate their time do so pro bono, or “for the public good.” Even then, there’s no guarantee that attorneys are going to be any better at grant writing than anyone else, and they might very well be worse. At the very least they’re likely to be more expensive, as law school doesn’t pay for itself.

** An old joke: An economist is walking down the street and passes $20. A pedestrian stops him and says, “Hey, why didn’t you pick up that cash?” The economist says, “In an efficient market economy, if it were worth doing, someone would’ve already done it.”