Tag Archives: Wall Street Journal

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.

You’re Not Going to be a Professional Blogger, Regardless of What the Wall Street Journal Tells You

The Wall Street Journal published a misleading article by Dennis Nishi called “Early Transition to Blog Pro,” about BoingBoing’s Mark Frauenfelder. It has two major problems: it implies that many more people make money solely from blogging than actually do, as though one can make a quick career of blogging (“How You Can Get There, Too”) and it doesn’t discuss how people actually use their blogs to make money, which is by selling ancillary services.

Problem One: No Money

Frauenfelder says that his blog does “make enough from advertising alone to cover costs and salaries,” but that “it’s hard to grow on just advertising.” Other bloggers—whose blog is a cornerstone of their career strategy—have already dealt with this issue in almost the exact language that he uses. As Penelope Trunk writes in “Reality check: You’re not going to make money from your blog,” people whose blogs are their income are very much the anomaly.” Right: even she doesn’t derive her primary income from blogging. Google ads pay almost nothing. Banner ads are worth almost nothing, and the market for advertising has cratered with the Great Recession.

Notice her first point: “Big bloggers come from big media.” She wrote a syndicated column before Brazen Careerist. If you’re not already involved in big media, you’re even less likely to make money blogging.

The experience described in “Blogs Falling in an Empty Forest” is probably more common: “Many people who think blogging is a fast path to financial independence also find themselves discouraged.”

First-Move Advantage

Frauenfelder has a first-mover advantage. Notice this:

Not long after [Frauenfelder’s magazine distributor folded], I discovered blogs and loved how easy they made it to publish, so I turned BoingBoing into one in 2000. It had already become a web zine (so) it seemed like a natural evolution.

He started nine years ago, before anyone on a newspaper staff had even heard the word “blog.” BoingBoing is now one of the most popular blogs on the Internet, in part because it covers technology, which is perhaps the most pervasive topic on the net. Very people are going to get there, even if they do work as hard as he has. Even then, I’d love to see Frauenfelder’s tax returns, because I bet he’s not making all that much despite running one of the Internet’s most popular blogs. Virtually no one is making any money directly from web advertising except Google (more on that later).

Lying With Numbers

The sidebar to “Early Transition to Blog Pro” claims:

Salary range: According to Henry Copeland, founder of BlogAds.com, a Web advertising concern based in Carrboro, N.C., self-employed bloggers in 2007 took in between $2,000 and $10,000 a month from ad sales.

I’d love to see what those numbers are based on, how Copeland defines self-employed, and so forth, especially since the numbers come from a person with an interest in making them appear high. This is a classic example of bogus data appearing in newspapers, and it’s the sort of thing that makes people doubt the news; this statistic could be an example in James Fallows’ Breaking The News: How the Media Undermine American Democracy.

Paul Graham explains how bogus numbers get into newspapers in The Submarine, which concerns how public relations lurk beneath much of what you read and watch. In one example, he says:

Our greatest PR coup was a two-part one. We estimated, based on some fairly informal math, that there were about 5000 stores on the Web. We got one paper to print this number, which seemed neutral enough. But once this “fact” was out there in print, we could quote it to other publications, and claim that with 1000 users we had 20% of the online store market.

Copeland did the same thing to the WSJ, which is unusual—not because he tried, but because they bit. Without real metrics, Copeland’s numbers are garbage, and I doubt they’d stand up to, say, peer review. You can see the same kind of twisting in data about, say, job creation through government spending.

Still, Blogging Isn’t a Waste of Time

That being said, Trunk also argues that “Blogging [is] essential for a good career,” which is true for the reasons she gives and one she doesn’t: it sends a powerful signal of your intellectual engagement and prowess. You can’t fake enthusiasm and knowledge on a blog, where what you know and how you express what you know is available for all to see; Geoffrey Miller discusses extensively in his book Spent: Sex, Evolution, and Consumer Behavior.

Note, however, that Trunk’s article doesn’t map to “you’ll make a lot of money from blogging,” which is the subject of the WSJ story, and the likelihood of it being one’s primary income source is, again, low.

Problem Two: How People Do Make Money Via Blogging

They sell something else besides ads on their blog. If they run XKCD, they sell T-Shirts. If they run Ph.D. Comics, they sell… T-Shirts. If they run Joel on Software, they sell software. Trunk began a startup around headhunting.

Far more seem to make money by showing expertise and then selling said expertise. In other words, they’re producing something useful for the world.

To be Fair…

I wrote an e-mail to expressing some of these concerns Nishi, who replied:

Most of the people I interview for this column probably have some advantage or more sheer will than most people. But they do represent exceptional examples and are meant to inspire and show what’s possible. So if I interview Bill Gates, it wouldn’t be an instruction guide about how to create a software giant. It’s more of a glimpse into what it took to build a software giant, hence the name of the column.

(The name of the column is “How I Got Here”).

Bill Gates isn’t a very good analogy—if you told someone you could be like Bill Gates and get rich selling desktop software in, say, 2001, you would’ve been misguided at best: the world was (and still is) moving to web-based applications. Hell, even if you said that in 1989, you would’ve been wrong: between then and now, the only companies that have really made money from shrinkwrapped software are Microsoft and Adobe. Everyone else folded. His timing advantage isn’t just “some advantage”—it’s the advantage that allowed him to massively succeed.

Nonetheless, Nishi has a strong point. But the tone of the story differs from the tone of his e-mail. Look at the first line of the story: “When blogs first came to the Internet over a decade ago, nobody believed they would make money,” which implies that now some of them do make money. Which is correct—but it’s probably an astonishingly small number relative to the number of blogs out there, especially given the (cratered) advertising market. Look at the aforementioned sidebar: “How You Can Get There, Too.” Lots of people build blogs about subjects they’re passionate about and will never make money from them, as Trunk observes.

Late May Links: Stimulus and American Recovery and Relief Act (ARRA) Madness, Free Money Wannabes, Economic Recovery, Grants.gov and the Government Accountability Office (GAO), and More

* The Government Accountability Office (GAO) released a report stating that “Consistent Policies [Are] Needed to Ensure Equal Consideration of Grant Applications.” No? Really? It goes on:

[A]pplicants lack a centralized source of information on how and when to use [Grants.gov] alternatives, rendering them less effective than they otherwise might be in reducing the strain on a system already suffering from seriously degraded performance. Moreover, inconsistent agency policies for grant closing times, what constitutes a timely application, when and whether applicants are notified of the status of their applications, and the basis on which applicants can appeal a late application create confusion and uncertainty for applicants […]

The primary question I have is, “How does this differ from business-as-usual?”

(Hat tip to the WSJ’s Washington Wire Blog, where I also get a shout-out. See also Isaac’s quote in “Economic-Stimulus Cash Is Moving Slowly“)

* Texas released the first stimulus bill pass-through RFP we’ve seen in the form of the Target Tech in Texas (T3) Collaborative Grant. This is an example of the long delays between allocation and implementation that Isaac wrote about in Stimulus Bill Passes: Time for Fast and Furious Grant Writing. If you’ve seen other stimulus bill pass-through funds in genuine RFP form, let us know!

* If you’re wondering why California’s legislature and bureaucracy is so dysfunctional, the Economist has some answers in “The ungovernable state.” It probably understates the importance of Prop 13 but still offers a better overview of the situation than most of the reporting we’ve seen so far. This story explains Schwarzenegger Puts Legacy on the Line With Budget Vote better than the Schwarzenegger story itself, which has this money quote: “For Mr. Schwarzenegger, a defeat would mark a repeat of the hard lesson learned by many of his predecessors: California is essentially ungovernable, especially during an economic crisis.”

* A page one Wall Street Article called “Crazy-Quilt Jobless Programs Help Some More Than Others” notes some of the bizarre disparities that arise in jobless programs; apparently, if a Department of Labor office decides that you’ve been laid off because you’re one of the “manufacturing and farm workers who lose jobs due to imports or production shifts out of the country,” you get two years of extra assistance.

Applications are already overwhelming the Labor Department, where just three “certifying officers” sign off on trade-adjustment petitions. In 2007, the most recent year tracked, the trio ruled on 2,222 petitions, approving 1,449. (The Agriculture Department signs off on a smaller number of TAA benefits for fishermen and farmers.) Hundreds are currently pending, including from Georgia-Pacific Corp., Mercedes-Benz, Bobcat Co. and Dell.

“We are drowning,” says Elliott Kushner, a certifying officer who has been inspecting TAA applications for 30 years.

* The risk of Federal debt is a wildly under-appreciated problem that might very rapidly and unpleasantly become extraordinarily appreciated. Consider yourself warned.

* Under the department of “Who knew?”: Tax information for Parents of Kidnapped Children.

* Get your free money! (or not): Slate asks, What’s the deal with those stimulus scams that are all over the Internet? and answers its own question in the headline: they’re scams. Take notice, those of you searching for free grant samples and the like.

* Along similar lines, someone found us by searching for “grants that are actually free.” Perhaps the Costco Samples post linked to above will encourage them to give up.

* I keep being tempted by the Amazon Kindle, despite my many posts on the Digital Restrictions Management (DRM) and other problems with the device. Then I see a post like “Amazon has banned my account – my Kindle is now a (partial) brick” and all those bad feelings return. The poster in question apparently returned too many items to Amazon, causing them to suspend his account and causing his Kindle to stop working.

* Slate reports that efforts are underway to change California state law that effectively prohibits firing bad teachers. The full article is at the L.A. Times: “Firing tenured teachers can be a costly and tortuous task.”

* The New York Times notices that J-Schools are Playing Catchup because of changes in journalism. Strangely enough, the Times seems to imply that journalism might become more like something akin to Grant Writing Confidential: people who find niches and then write the hell out of their subject.

* Wall Street Journal reporter Louise Radnofsky reports that “States Can Use Stimulus Money to Track Their Stimulus Spending.” From our perspective, the most interesting sentence is this one: “Many cash-strapped states had worried that without money upfront, they couldn’t set up offices to coordinate stimulus spending or hire independent auditors” because it implies that states still aren’t spending the money they’ve been passed by Congress, which goes back to the numerous posts we’ve written on the subject of how stimulus funds will be spent and in what sort of timeframe.

* On the value of a liberal arts education:

The great value of a liberal arts education is that it prepares you to be relatively happy even if you find yourself working in a corrugated cardboard factory. Partly because books are cheap, and cultivating the ability to take great pleasure in a well-crafted novel lowers you hedonic costs down the road. But more broadly because the liberal arts might be descibed as a technology for extracting and constructing meaning from the world. If you know your Hamlet, you know that’s all the difference between a prisoner and a king of infinite space.

(Those of you are loyal GWC readers might tie this into One of the Open Secrets of Grant Writing and Grant Writers: Reading.)

* The economic downturn is hitting Mongolia with zud:

Falling demand for cashmere among recession-hit shoppers in the West is cutting into earnings among nomadic herders in Mongolia, whose goats produce the soft fiber used in high-end sweaters, scarves and coats. The result: herder loan defaults.

Mongolians are calling the current situation a financial zud, invoking a local term for unusually harsh winters that devastate herds. After Mr. Sodnomdarjaa couldn’t pay back a $2,700 loan, he says bank officials pressed him to sell his livestock — which he used as collateral. The bank says he misrepresented the number of animals he owned, which he denies. Now a judge has ordered the seizure of Mr. Sodnomdarjaa’s family home — a tent — if he doesn’t come up with the rest of the money soon.

* Speaking of economic downturns, Derek Thompson’s “Can the Oil Shock Alone Explain the Financial Crisis?” is a fascinating post that has relatively little to do with grant writing:

Hamilton went back to 2003, when crude oil was around $30 a gallon and forecast what an oil shock like the one we experienced in 2007-08 (when oil peaked around $140) would do to GDP. He graphed the result through the end of 2008 and, lo and behold, it was damn close to actual GDP. As though there were no such thing as a collaterized debt obgligation in the first place! […]

Perhaps you’ll join me in thinking: Huh? Are we really to believe that this whole thing was caused by oil shocks? I mean, it certainly makes you appreciate the mess Detroit is in, but really. How anti-climactic. It makes this crisis seem so … 1970s.

* Txting and sex ed at the New York Times.

* Mark Cuban writes “A Note to Newspapers:”

I’ve always been a believer that Amazon has excelled not just because they have great customer service and decent prices, but because they have those, PLUS they have my credit card on file. It’s easier to buy from Amazon than it is to go to the store.

* Megan McArdle writes “Economy Ends; Women and Minorities Affected Most.”

* Edward Glaeser, who is perhaps my favorite economist, asks why, if the world is so flat, “Has Globalization Led to Bigger Cities?” His answer:

Globalization and technological change have increased the returns to being smart; human beings are a social species that get smart by hanging around smart people. A programmer could work in the foothills of the Himalayas, but that programmer wouldn’t learn much. If she came to Bangalore, then she would figure out what skills were more valuable, and what firms were growing, and which venture capitalists were open to new ideas in her field…

Knowledge moves more quickly at close quarters, and as a result, cities are often the gateways between continents and civilizations.

This, incidentally, is also why I don’t expect schools to go digital, or universities as they exist to shrivel and die as commentators have implied. If knowledge moves more quickly, one can also expect the relative value of places like universities to grow.

And pay special attention to this bit:

Abundant land hides many sins, including the failures of government. But when people crowd into cities, the costs of governmental failure become painful and obvious.

* I used the delightful word “bogosity” in a recent post, and now Language Log has a whole lot more on that term.

* Although we don’t often cover international grant-related issues, Please Stop Building Schools in Iraq and Afghanistan stands out as an example of the genre:

Here’s a general rule that applies to basically every development program in every poor country in the world, including Iraq and Afghanistan: want to do something nice and useful for these people? Don’t build them a school. Believe it or not, people in poor countries actually have buildings. And they are capable of building more of them. They know how to do it, and it usually, for fairly simple economic reasons, does not cost more in any country to build a building than local people can afford. You know what they don’t know how to do? Teach science and math and English. And often, employing a trained teacher does cost more than they can afford in a small village, because such people are scarce, and it’s hard to spare extra labor in subsistence economies. If you want to spend your money on education, don’t build them a school; pay to train some teachers, and then pay the teachers’ salaries.

March Links: Stimulus Madness, Grants.gov, Health Care and More!

* We wrote about how to get your piece of the stimulus pie, noting that better-prepared organizations are more likely to be funded. Now the Washington Post reports that “Much in Obama stimulus bill won’t hit economy soon:”

It will take years before an infrastructure spending program proposed by President-elect Barack Obama will boost the economy, according to congressional economists.

[…]

Less than half of the $30 billion in highway construction funds detailed by House Democrats would be released into the economy over the next four years, concludes the analysis by the Congressional Budget Office. Less than $4 billion in highway construction money would reach the economy by September 2010.

* At The New Yorker, Steve Coll decided to blog the Stimulus Bill. Good luck on your journey! I, for one, would prefer not to wander in the desert for 40 years, but I’m glad someone else is willing to do so and perhaps bring something enlightening down from the mountain at the end. From his first post:

I particularly like the turn from the setting to the main title: “Begun and held at the City of Washington on Tuesday, the sixth day of January, two thousand and nine…An Act.” It’s all very grand—and a long way from the aesthetics of Fox News or MSNBC, which is how we usually encounter this material, in a summary of a summary.

And so, herewith launches an irregular series about the stimulus bill. I will read all of it, carefully, so that you don’t have to, and every so often I will stop and try to write something useful. It seems doubtful that the full law will prove either as funny or as morally edifying as the Old Testament, but I will do what I can.

* The Washington Post reports that Grants.gov Strains Under New Demand:

An early casualty of the stimulus package was identified by the Office of Management and Budget this week when OMB Director Peter Orszag told agency heads to plan for a possible meltdown of the government’s online grantmaking portal… “Grants.gov continues to experience system slowness due to the high volume of users,” the Grants.gov blog advised readers Tuesday.

The question is, how will we be able to distinguish new problems from business as usual?

* From the department of unintended consequences: “Doctor-Owned Hospitals Fare Poorly in Child Health Bill” says:

A bill making its way through Congress to provide more low-income children with health-insurance coverage could spell financial trouble for scores of hospitals owned by physicians.

The number of doctor-owned hospitals has tripled to about 200 since 1990, but they have long been mired in controversy. Supporters say these hospitals, which often focus on one or two lucrative services, such as cardiac care or orthopedics, are highly efficient, saving expenses for both patients and insurance programs, including Medicare.

Critics say physicians who refer patients to hospitals in which they have an ownership stake drive up costs, because they order more tests or perform unnecessary surgery. They argue that the physician-owned hospitals also cherry-pick the healthiest patients, which hurts the finances of other hospitals, the majority of which are nonprofits.

* More on unintended consequences and kids in “New Law Cripples Small and Independent Children’s Toy and Clothing Makers:”

The gist is that the new regs impose debilitating new testing requirements on anyone who makes, markets, or sells toys to to children. The bill is a hysteria-filled reaction to last year’s China lead scare, and its reach is really pretty incredible. Thrift stores, libraries, independent toymakers, people who hand-make toys and clothes to sell online, and on down the line are all going to be affected. It’s going to put thousands of people out of business. Just what the economy needs.

As is the case with most new regulations, the one group that won’t have any problem complying will be the giant toy companies—the very companies responsible for the lead scare that inspired the legislation in the first place.

* The New York Times is In Search of the Just-Right Desk. They neglect the best desk of all, however, which is one with a Humanscale keyboard system attached to it. The 5G system can be found for $225 – $300, and once one has it, the only question is having a surface on which to mount it. We wrote about such equipment issues in Tools of the Trade—What a Grant Writer Should Have.

* Although the Wall Street Journal editorial page is a notoriously lousy place to seek informed or balanced opinions, it does have a useful piece about What Medicaid Tells Us About Government Health Care. Ignore the political slams and focus on the parts about access to care:

The federal and state governments are equally culpable for the program’s troubles. The federal government matches state Medicaid spending, paying an average of 57% of costs. States expand enrollment in order to qualify for more federal aid. Insurance coverage has become the end itself, with states spreading resources widely but thinly — without enough attention to the quality of care, accessibility, or whether coverage was actually improving health. States have no obligation to rigorously measure health outcomes in order to qualify for more federal money.

One major healthcare problem in the United States is insufficient access to care, and in particular to specialty care. While insurance rates get enormous amounts of media coverage, virtually no one discusses how hard it can be to use public insurance like Medicare/Medicaid because relatively few providers accept them. We’ve worked for clients in relatively large cities that lack an adequate number of basic specialists like ob/gyns and cardiologists, and often have no practices that will accept Medicare/Medicaid. As the editorial notes, the preference for these programs has been on enrolling the maximum number of people—sometimes at the expense of the quality of care given:

For its part, the federal government has often prevented the states from taking steps to fix their own Medicaid programs, such as by devising outcome-based standards for evaluating performance, and de-emphasizing the goal of growing the number of covered people to focus more on improving the health of those served.

* Elsewhere in the WSJ, an article discusses “Heroin Program’s Deadly Toll: Needle Exchanges Save Lives but May Imperil Workers:”

Worker drug abuse is “a huge problem,” says Jon Zibbell, the founder of a Massachusetts drug users’ coalition who is now an assistant professor at Skidmore College. “We prevent [overdoses] among our clients,” he says. “So we should try to prevent them among our workers.”

Studies suggest that needle exchanges work. In San Francisco, Chicago and New Mexico, heroin-related deaths dropped after users were taught how to administer an anti-overdose medication to each other. In New York City, the rate of new HIV infections among injection-drug users dropped more than 75% between 1995 and 2002 as the number of clean needles distributed doubled, according to a study by epidemiologists there.

Many needle-exchange programs employ recovering addicts who might not always be as recovering as they say. This is a near-universal tactic in service delivery under the theory that those who can empathize with a person’s struggle are better able to help that person and to provide a positive role model.

* Ever wondered why people can’t give unused airline tickets or frequent flyer miles to you? So did the WSJ, and in “Why Fliers Can’t Donate Unused Tickets” Scott McCartney explains that airlines make a lot of money from unused tickets and would rather make specious security and technical arguments than allow greater customer choice.

* Note to the person who found our site by searching repeatedly for “grant writeting in la.”: you’ve correctly realized that you need help with writeting writing.

* In other search news, someone found us by searching for “should we hire a grant writer?” Being grant writers, our answer is almost always yes, but one can find more on this subject in a tangentially related post on “Why Can’t I Find a Grant Writer? How to Identify and Seize that Illusive Beast.” This subject might also become a post of its own at some point: watch this space for more.

* In still more search news, someone else found us by searching for “free grant writing software.” Software isn’t going to help you: learning how to write, however, will. But there are a number of lovely free and open source pieces of writing software, including AbiWord and OpenOffice.org. In the paid but inexpensive world, I’m fond of the Mac program Mellel.

* Why is the U.S. Department of Transportation (DOT) giving out money for the Garrett A. Morgan Technology and Transportation Education Program, which is designed “to improve the preparation of students, particularly women and minorities, in science, technology, engineering, and mathematics (STEM)?” Isn’t that the Department of Education’s job? It’s a good example of a point we occasionally make: just because a federal, state, local, or foundation/corporate giving resource doesn’t appear to fund in your area doesn’t mean they won’t issue an RFP in it anyway.

* If you think running your program is hard, consider the Chiricahua Leopard Frog Conservation project, which “will involve hand removal of frogs and monitoring refuge sites to determine status of the Chiricahua Leopard frog and possible re-invading bullfrogs.” Where do I sign up?

* The New York Times is smart enough to try following federal money to A.I.G., as reported in “Where Taxpayers’ Dollars Go to Die.” They should try the same with federal grant programs.

* State smiling lessons for liquor store employees in Pennsylvania. Good luck! One of the nice parts about moving from Seattle to Tucson was the civilized practice of selling booze in grocery stores, which Washington State lacks.

* One of the very few genuinely intelligent recent articles about the financial mess: The Problem With Flogging A.I.G.:

By week’s end, I was more depressed about the financial crisis than I’ve been since last September. Back then, the issue was the disintegration of the financial system, as the Lehman bankruptcy set off a terrible chain reaction. Now I’m worried that the political response is making the crisis worse. The Obama administration appears to have lost its grip on Congress, while the Treasury Department always seems caught off guard by bad news.

And Congress, with its howls of rage, its chaotic, episodic reaction to the crisis, and its shameless playing to the crowds, is out of control. This week, the body politic ran off the rails.

There are times when anger is cathartic. There are other times when anger makes a bad situation worse. “We need to stop committing economic arson,” Bert Ely, a banking consultant, said to me this week. That is what Congress committed: economic arson.

* Writing in the Wall Street Journal, Dambisa Moyo examines Why Foreign Aid Is Hurting Africa: Money from rich countries has trapped many African nations in a cycle of corruption, slower economic growth and poverty. Cutting off the flow would be far more beneficial. He also wrote the book Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa

* Your eyes might deceive you: Slate’s Dahlia Lithwick asks: “Have the Eyes Had It?
Is our eyewitness identification system sending innocents to jail?
” The answer, according to her article, is yes.

Self-Efficacy is underrated

I’ve written about the foolishness of trying to use self-esteem as a metric (“Self-Esteem—What is it good for?“), as well as the impossible question, “Who gets funded?” (“Rock Chalk, Jayhawk—Basketball for Grant Writers“). Now “If at First You Don’t Succeed, You’re in Excellent Company” blends both subjects; the author, Melinda Beck, relates how Julie Andrews was “not photogenic enough for film,” publishers rejected J.K. Rowling’s first Harry Potter novel multiple times, and—my favorite—Decca Records passed on the Beatles.

The common thread in these tales of success arising out of initial failures is a concept psychologists call “self-efficacy,” meaning that one has a strong belief in one’s capabilities to do specific things (e.g. Lennon and McCartney had a pretty good idea that could write and play great pop songs, but probably not become professional soccer players), as opposed to the generalized feelings of self-worth that are typical of those with high self-esteem. Moreover, a person works to incorporate feedback and develop their skills, rather than assuming that one’s skills and abilities are fixed. RFPs often reference building “self-esteem” among, say, at-risk youth, but I have never seen a reference to self-efficacy or its cousin resilience, which seem more important as metrics of societal success.

Grant writers should use self-efficacy instead of self-esteem in program models. Let’s consider Project DARN (Dubuque Action and Referral Network), which provides after school enrichment for teens. Instead of trying to get the participants to feel good about themselves by somehow increasing their self-esteem, the project will help each youth find something they’re good at and foster that skill so they actually have a reason to feel positive beyond simply existing. As the WSJ article states, “‘It’s easy to have high self-esteem — just aim low,’ says Prof. Bandura, who is still teaching at Stanford at age 82.” For example, if Joe likes playing computer games, a project staff person could see if he has a knack for programming, and if so, find a mentor from a local software company. This might set Joe on a path to a living wage job, as opposed to having him chant, “we’re all special” in a group. This could help differentiate the Project DARN model from others, and it may actually help your participants.

Self-efficacy isn’t just useful for participants—it’s also a key trait for grant writers trying to get their program funded. If you believe in the organization and the services it provides and have or will develop the skills to write compelling proposals, you should keep trying. The key thing you should do is learn from failure, as Michael Jordan has said: “I’ve failed over and over and over again in my life. That’s why I succeed.” Eventually, if you find the right RFPs or foundations, work diligently at improving your writing skills, and tailor your proposals and programs to available funding sources, your program will be funded.

It’s not enough just to want the money—you also have to want to change and improve your proposals or programs, which too many organizations seem unwilling to do, as the innumerable schools with great mission statements and high dropout rates show. Or, better yet, those districts have ironically named “successful school guides” even as their students fail almost every ability test imaginable.

Déjà vu All Over Again—Vacant Houses and What Not to Do About Them

The Wall Street Journal ran “As Houses Empty, Cities Seek Ways, To Fill the Void” (link goes to a blog that copied the article—see the original here) by Michael Corkery and Ruth Simon on February 6, 2008. They document the large number of vacant and abandoned houses in many American cities and attempts by public officials to address this latest urban crisis. For me, as Yogi Berra once said, “This is like déjà vu all over again.”

Faithful Grant Writing Confidential readers may recall that, in my first post, They Say a Fella Never Forgets His First Grant Proposal, I waxed nostalgically about setting up a Vacant Housing Task Force as a 21-year old intern and proto-Community Organizer a la Barack Obama. I tried all kinds of approaches—chasing down absentee owners, running home repair workshops, starting a nonprofit hardware cooperative, and sitting through endless meetings with local politicos. But it was to no avail, as many houses remained vacant. America finds itself once again mired in the difficult days of 1972 (e.g., vacant houses, endless war, stagnant pop music scene, etc.) and bright young minds once again confront the vacant house conundrum.

While Corkery and Simon did a nice job with the basic story, they did not explore the long history of public agency attempts to grapple with the vacant housing issue. They mention the Community Development Block Grant (CDBG) program, which can be used to tackle this issue, along with about 482 other social problems, but they did not cover other efforts. For example, HUD’s 203(k) Housing Rehab program sells HUD-owned houses to nonprofits at a discount, provided they rehab the houses and sell to low-income people.

Also, at one time HUD had a Urban Homesteading program that provided cities with HUD-owned houses. I don’t think this program still has funding, perhaps making it a Zombie program, but there were also variations that encouraged cities to resell the houses to police officers and teachers in hopes of diversifying disadvantaged neighborhoods. There are lots of other well-intentioned state and local government initiatives, all designed to recycle vacant and abandoned houses.

Corkery and Simon come up with many wringing of hands and gnashing of teeth quotes from grim public officials in such places as San Diego and Cleveland—now there’s an odd couple—about the dire consequences of what is supposed to be the biggest vacancy problem since the Great Depression. Yikes! What to do? The article suggests such approaches as “land banks,” which is a great way of replacing vacant houses with vacant lots. The representative of the Genesee County Michigan Land Bank seems proud that the Land Bank has bought and demolished 800 houses and built 200 houses. It they keep it up, eventually no one will live in Flint, the city immortalized by Michael Moore in Roger & Me. Regardless of whether the Land Bank is a good thing, it’s hard to see how creating more vacant lots will stop speculators from “perpetuating neighborhood blight,” as reducing density will probably have the same negative impacts on neighborhood vibrancy that Jane Jacobs wrote about in 1961.

The article also suggests that another solution is to somehow have a public agency buy the vacant houses and resell them to poor folks, keeping the houses “affordable.” Having also worked on endless schemes like this when I was the Development Director for the City of Inglewood, CA, the major problem is that such an effort often involves deed restrictions, which in turn restrict the ability of low-income homeowners to gain future price appreciation and virtually guarantees they will never get out of poverty and the neighborhood will never become economically diverse. If a large number of low-income homeowners cannot benefit from rising property values—which over time will probably happen—and can only sell to other low-income buyers, which is a central tenet of these programs, the entire community becomes stuck in an economic rut.

So, under the banner of trying to preserve affordable housing, the public agency can end up inadvertently causing the neighborhood to stagnate. Perhaps Flint should emulate Detroit, where urban farmers plant corn in neighborhoods where houses once stood. It may seem odd, but there is a movement in Detroit, a city with vast stretches of empty residential lots, to plow up the infrastructure and put the land to agricultural uses. The grant writer in me starts salivating at this idea, as once could combine biodiesel production with bootstrap economic development and help the vacant housing crisis—a grant writing trifecta.

My experience, starting with knocking on doors in North Minneapolis long ago, is that none of these efforts work, or at the very least none will be consequential enough to notice. Eventually, market forces will equalize and the houses will become so inexpensive that people will move back in, fix them up and the neighborhood will gentrify. This is an interesting narrative, but, as Tim Harford writes, “[…] neighborhoods do not tend to ‘up and come’ at all. Anyone who doubts this should look at Charles Booth’s famous map of London’s rich and poor areas at the end of the nineteenth century […] Overlaying Booth’s map with today’s poorest areas is a sobering experience: With few exceptions, yesterday’s poor areas are also today’s poor areas.” This is probably less true in the United States—think of Manhattan of the 1970s versus today—but still instructive.

Of course, if gentrification does happen, this will start the handwringing all over again, as periodically the New York Times will run a story about the poor folks being driven out of their homes by gentrification, instead of predatory lenders. Newspapers thus have a choice of running two stories in alternate years: falling housing values are harming the poor by destroying neighborhoods, or rising housing values are harming the poor by pricing them out of the market. In either case, newspapers confirm that poor people are always getting screwed one way or another, which is probably true.

As a grant writer, however, I am delighted to see the media and our politicians focused on a new crisis because, wherever a major social problem emerges, grant programs are sure to follow. Not to hope for doom, but, as Chairman Mao said, “let a hundred flowers bloom.” When Congress comes up with a new grant program to address the vacant housing challenge, as it surely will, Seliger + Associates will be ready to write the proposals till the next crisis arrives.

More on Charities

A previous post linked to a Wall Street Journal post on charities; now the paper released a full article (may not be accessible to non-subscribers) on the subject of how donors evaluate the usefulness of a program, arguing that donors are becoming more engaged in measurement. One thing missing: statistics showing this is actually part of a trend, rather than just a collection of anecdotes. The article is more descriptive of the practices around how to evaluate effectiveness and uses hedge words:

Wealthy people and foundations sometimes hire philanthropy consultants to help them gauge a charity’s effectiveness. But other donors who seek that kind of analysis usually have had to rely on guesswork or do it themselves, which makes it tough to figure out whether one approach to solving a problem is better than another.

“Sometimes” they hire consultants, other times they essentially use the hope and pray method. That’s not terribly different from how things have always been done. Most interesting, however, is a topic relevant to evaluations that we’ll comment on more later:

The problem is, it can be difficult — and expensive — to measure whether charitable programs are actually working, and most nonprofits aren’t willing to devote scarce resources to collecting such information.

Most federal programs have in effect chosen a tradeoff: they provide more money and almost no real auditing. This is because real auditing is expensive and generally not worthwhile unless a blogger or journalist takes a picture of an organization’s Executive Director in a shiny new Ferrari. To really figure out what an organization is doing with $500,000 or $1,000,000 would cost so much in compliance that it would come to represent an appreciable portion of the grant: thus, the hope and pray method becomes the de facto standard (more on that below).

The writers also are pressed for space or don’t fully grok nonprofit evaluations, because they write:

Philanthropy advisers suggest first asking nonprofits about their goals and strategies, and which indicators they use to monitor their own impact. Givers should see how the charity measures its results both in the short term — monthly or quarterly — and over a period of years.

Measuring results isn’t a bad idea if it can be done, but the reason such measurements often don’t occur is precisely because they’re hard. Even if they do occur, you’re asking the organization to set its own goal marker—which makes them easy to set at very, ahem, modest, levels. If you set them at higher levels, the measurement problems kick in.

If you’re going to decide whether an after school program for middle-schoolers is effective, you’ll have to get a cohort together, randomly divide them into those who receive services and those who don’t, and then follow them through much of their lives—in other words, you have to direct a longitudinal study, which is expensive and difficult. That way, you’ll know if the group who received services were more likely to graduate from high school, attend college, get jobs, and the like. But even if you divide the group in two, you can still have poisoned data because if you rely on those who present for services, you’re often getting the cream of the high-risk/low-resource crop. You have numerous other confounding factors like geography and culture and the like.

The research can be far more costly than the project, and as little as donors like not knowing whether their money is effective, they’re going to like it even less if you spend 50 — 80% of the project on evaluating it. This is why the situation donors say they want to change is likely to persist regardless of what is reported.


EDIT: We wrote another, longer post on evaluations here.