Tag Archives: Funds

Grant Writing Confidential Scoops the Wall Street Journal and More on Being Creative in Finding Funds During the Great Recession

As the editor of my high school newspaper—the Cooper High School Hawk’s Quill—and a short-lived college journalism major, I take great delight in scooping the Wall Street Journal. Shelly Banjo wrote Donations Slip Amid Anxiety on June 9, which said:

For the second year in a row, philanthropy has seen the deepest decline ever recorded by the Giving USA Foundation, which has tracked annual giving since 1956. Donations fell 3.6% to $303.75 billion last year, down from $315 billion in 2008, according to the latest Giving USA study, released Wednesday. In 2008, they were down 2%.

Faithful readers will note that I made more or less the same point in my May 29 blog post, Tough Times for Folks Means More Grant Writing for Nonprofits, although with more humor and helpful advice. If one read Ms. Banjo’s article and knew little about nonprofits, one would get the impression that the end is nigh. This is because her article, like most stories about nonprofits, perpetuates the conventional wisdom that all nonprofits depend exclusively on donations, which is simply not true.

As I pointed out in my post, while donations are important, particularly for certain kinds of nonprofits, most human services providers support their service through grants, fee-for-service contracts, third-party payers and/or quasi-business enterprises, in addition to donations.* These alternative revenue streams, which can be ramped-up when donations are down, are not mentioned by Ms. Banjo and the cast of nonprofit “experts” she quotes and data she cites.

Although new contributions to foundations may be down, foundations still must give away 5% or so of their endowment every year, and the feds, through the Stimulus Bill and lots of other appropriations, have keep the grant spigot wide open. Cagey nonprofit executive directors are busy writing grant proposals and dreaming up other revenue strategies, not wringing their hands and gnashing their teeth over declines in donations. But not in the conventional wisdom world of newspaper writers.

A second Wall Street Journal article by Jennifer Levitz and Stephanie Simon on June 12, “A School Prays for Help”, confirms the importance of getting creative during tough times. While this article mostly discusses public schools, police departments and other public agencies seeking alternative funding sources, the same concepts apply to nonprofits.

In this article, the writers describe how some schools are getting local churches to “adopt” them and other strategies for what amounts to advertising in order to supplement limited tax dollars. Nonprofits can do the same sorts of things instead of just waiting around for donations to pickup.

One of the several odd aspects of a church providing donations to a public school, however, is that the church itself is a nonprofit that depends almost exclusively on donations from its members. Why would they do this? One reason could be that the church expects to get new members from school parents and staff, and they will eventually try to extract donations from the new members. In other words, the church and the school are probably competing for donor dollars and the church may be taking the longer view that investing a small amount of its money now, derived from its members, will result in more members and more money later.

While most nonprofits and public agencies like to present themselves as collaborating, in reality they compete with one another for donations, grants, and all kinds of resources. I pointed this out in What Exactly Is the Point of Collaboration in Grant Proposals? The Department of Labor Community-Based Job Training (CBJT) Program is a Case in Point, a post that generated quite a comment thread.

Some readers understood my point, while other denounced me as a hopeless cynic. Of course, I am a hopeless cynic, but nonprofits and public agencies are largely in competition, and the ongoing economic mess just makes this competition rise to surface, like the somewhat baleful giant crocodile in the best “big animal” movie of recent years, Lake Placid.


* Jake also wrote about funding sources in Bratwurst and Grant Project Sustainability: A Beautiful Dream Wrapped in a Bun.

Stuck on Stupid: Hiring Lobbyists to Chase Earmarks

A faithful Grant Writing Confidential reader and fellow grant writer, Katherine, sent an email wanting my take on a public agency hiring a lobbying firm to seek federal earmarks. For those not familiar with the term, it means getting a member of Congress to slip a favored local project into a bill, bypassing normal reviews and restrictions. The Seattle Times recently ran a nice article on the subject featuring our own Representative Jim McDermott, who is skilled at the art of earmarks. The only member of Congress I know doesn’t push earmarks is John McCain. For the rest of Congress, earmarks are a way of funneling money into often dubious projects, such as the infamous Bridge to Nowhere.

Back to the local school district where Katherine lives, which decided to hire a DC lobbying firm for $60K/year to get earmarks. She suspects this is a scam. I have no idea whether this particular lobbying firm is up to no good, but in my experience hiring lobbyists to chase earmarks will make the lobbyists happy and lead to lots of free lunches and dinners for public officials visiting DC to “confer” with their lobbyist and legislators, though it is unlikely to end with funding.

A small anecdote will demonstrate this phenomenon. About 20 years ago, when I was Development Manager for the City of Inglewood,* I was directed by the mayor via the city manager to contract with a particular DC lobbying firm to chase earmarks. Since the city manager and I knew this was likely a fool’s errand, we agreed to provide a token contract of $15K. I accompanied the mayor and a few others to DC for the requisite consultation with the firm. About 10 in morning, we strolled from the Mayflower Hotel over to K street, where all the lobbyists hang out, and were ushered into a huge conference room with a 25 foot long table.

Over the next two hours or so, just about every member of the firm wandered in to opine on potential earmarks. Around 12:30, we all repaired to an expensive DC restaurant (are there any other kind?) for steaks and cocktails. We had a fine meal and I met then former Vice President Walter Mondale, who had morphed into a lobbyist himself and was taking his clients out for lunch. When I got back to Inglewood, I received an invoice from our lobbyist which exceeded the contract amount. Our contract paid for less than one meeting in DC and resulted in no earmarks. But I had a great time, since it is always fun to visit DC using somebody else’s money.

That experience schooled me on earmarks and about why Inglewood had gone about acquiring them in the wrong way. If a public agency wants to try for an earmark, the agency can do so just by contacting the chief field deputy for Senator Foghorn Leghorn. Congressional field deputies know all there is to know about the earmark process. If your representative is in a mood to support your project (e.g., needs help to get re-elected and wants to say they are standing up for schools), they will fall all over themselves directing their staff to push the earmark. If they don’t want to for some reason, all the lobbyists in the world won’t force the issue. In that situation, the school district might just as well use the money to buy lotto tickets in hopes of funding the project, rather than hiring a lobbyist. Furthermore, going through the congressional field office will avoid the EDGAR problems described below.

Another problem is that if you have almost all of the 535 members of Congress promoting various earmarks, the chances of your particular project being included are pretty slim. This is another reason we don’t recommend pursuing earmarks. If Katherine’s school district really wants to fund education projects, this is not the way to go about it. Instead, they should hire an experienced grant writing firm, like Seliger + Associates, to help them refine and prioritize project concepts, conduct grant source research, and start submitting high quality, technically correct proposals. If the concepts have merit, they will eventually be funded. The Department of Education and others provide billions of dollars in actual grant funds every year. This is a larger, more reliable source of funding than earmarks.

Finally, if an organization is lobbying, it can end up closing off grant funds. The “Education Department General Administrative Regulations” (EDGARs) govern grants and contracts made through the Department of Education, and they’re designed to prevent corruption, kickbacks, and the like. Subpart F, Appendix A, deals with lobbying. It says:

The undersigned certifies, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

And so on, which you can read if you’re a masochist. EDGAR basically means that an agency which pursues lobbying can end up screwing itself out of the much larger and more lucrative grant world.

Katherine has also found questionable math regarding the particular lobbyists’ probable efficiency, and the lobbyist also makes the dubious claim that it has a “90% success rate.” But what does “success” mean in this context? Does that mean 90% of clients get some money? If so, how much? And from who? And through which means? Seliger + Associates doesn’t keep “success” numbers for reasons explained in our FAQ. We constantly see grant writers touting their supposed success rate and know that whatever numbers they pitch are specious at best for the reasons described in the preceding link.

Public agencies hiring lobbyists for earmarks is often a case of being stuck on stupid.


* “Inglewood always up to no good,” as 2Pac and Dr. Dre say in California Love.