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One Foundation Grant Can Lead to Another: A Bill and Melinda Gates Foundation Funding Story

July 13th, 2014 · by Jake Seliger · No Comments

A few years ago we conducted foundation grant source research and wrote ten foundation proposals for a national membership nonprofit that wanted to do a complex education study. One of the national foundations we identified, and wrote a proposal to, awarded the client $200,000. The award is terrific but not the end of the story—if it were, we wouldn’t be writing this post. The funder then referred our client to the Bill and Melinda Gates Foundation, the largest foundation in the world, who awarded our client a still larger grant. The study was completed and the American education system presumably improved.

Everyone who works in the grant world knows that the Gates Foundation usually doesn’t accept unsolicited proposals.* The Gates Foundation has to come to the organization.

This specific example illustrates a general principle: with any kind of grant writing, but especially with foundation funding, it’s impossible to know what might happen when the proposal is submitted. Every big foundation knows every other big foundation. Local foundations know other local foundations. Foundations are often fond of funding organizations that have been funded by other foundations. Life many human endeavors, the first grant is the hardest and funding typically get easier after that. If you get into the foundation club, you’ll find that being a member is much more pleasant and fun than watching from the outside.** (Venture capital works the same way.)

But there’s no easy way in, unless you happen to have a friend or relative who happens to sit on a foundation’s board. We, like most people, don’t have any friends or relatives like that. The only practical approach in seeking foundation grants is to carefully research foundations, prepare a compelling boilerplate foundation letter proposal***, customize this generalized proposal to create technically correct submissions to several plausible foundations, submit the proposals, and retire for a cocktail or three.

(Warning: The next paragraph is a shameless plug. Skip it if you’re likely to be offended.)

Incidentally, we’re having a Sizzling Summer Sale right now, and our foundation proposal package fees are discounted by 25%. Call us at 800.540.8906 for details, but don’t delay, as the sale ends July 31.

(Advertising section over.)

Our client’s story also illustrates the challenge in responding to common questions that potential clients frequently ask. They want to know how many clients we’ve gotten “funded.” But this case demonstrates how hard it can be to answer. When our client was initially funded, he didn’t tell us. If we were trying to keep a client batting average—which we don’t, because a batting average is a waste of time, given the wide range of our clients in terms of size, track record, location, type and so on—we wouldn’t have known that he should be included.

In addition, it can be hard to answer the question, “What is ‘funded?’” We wrote and submitted the first proposal, so we’ll take credit for it. But the first funder, which is very large, led directly funding for the save project by the second. Does the Gates Foundation grant count for our tally? Did we get the client funded only for the original $200,000 grant, or for the millions that followed? One could reasonably argue both sides, since the second funder wouldn’t have appeared without the first one.


* The Gates Foundation may run specific RFP processes from time to time, but those are narrow and rarer. Almost anyone who says they want to submit to the Gates Foundation but who doesn’t have connection is actually saying they don’t know what they’re talking about.

** If you want a hot date to the Prom, it helps if you’ve had dates to fall and winter formal dances first.

*** We use the term “foundation letter proposal” to characterize the initial foundation submission. We initially format these as a five-page, single-spaced letters, since many foundations request a short LOI. The final submissions may be customized to create the appropriate letters with proposals, on-line inserts, or some combination—depending on the requirements of the particular foundations.

→ No CommentsTags: Clients · Foundations · Grants

The Mystery of LAHSA Homeless Census Numbers, HUD and Data Implications

July 7th, 2014 · by Jake Seliger · 1 Comment

The LA Times’s story “County’s homeless population difficult to quantify” tells us that there are 54,000 homeless people in L.A.—or are there? Apparently “The U.S. Department of Housing and Urban Development says it lost confidence in the survey methodology” used by our friends LAHSA—the Los Angeles Homeless Services Authority—and consequently HUD knocked 18,000 homeless people out of L.A. county. So there are 54,000 homeless in L.A. County, or 36,000, or any other number you care to make up.

It’s almost impossible to accurately define the number of homeless because the definition of homelessness is itself fluid. Does one night on the streets count? Does two? A week? What if someone has a home but runs away for a period of time. For grant writing purposes, homeless counts are a facet of issues we’ve described before, in posts about finding and using phantom data and the difficulty of performing a significant evaluation. Fortunately, funders are like journalists in that they often care less about the epistemological and statistical questions meaning of the number than they care about having a number.

Despite the debate, the numbers may not actually matter: the reporter, Gale Holland, doesn’t mention this, but HUD actually doesn’t allocate McKinny-Vento Homeless Assistance Act grant money based on homeless censuses. Instead, McKinney Act funds—otherwise known as “Continuum of Care” grants—allocates money based on population, poverty, and other cryptic metrics in specified geographic areas. Consequently, the estimated number of homeless derived from the annual homeless count required by HUD isn’t real important.

HUD also requires that urban cities, counties and states draft “Continuum of Care Plans,” or something similar, to end homelessness as part of the Consolidated Plan process. We know because we read and analyze Continuum of Care and Consolidated Plans whenever we write a HUD proposal, which is pretty often. We’ve been reading these plans for 20 years and they all say more or less the same thing. No Consolidated Plan says, “Our goal is to increase homelessness.”

Instead, there is inevitably a vague plan to increase the amount of affordable housing and to end homelessness, usually in about twenty years. Ending homelessness is the cold fusion of grant writing, always on the horizon and never actually here.

Twenty years is just soon enough to be plausible but long enough that the officials who are currently in office are likely to be elsewhere, which leaves space for the next crop of officials to make the same promises. Homelessness is probably not amenable to being cured. Leaving aside the fact that most major coastal cities like L.A. are actually becoming less affordable, not more, a lot of long-term homeless also don’t necessarily want to live in conventional housing, because conventional housing tends to come with lots of rules: no booze, no (illegal) drugs, anyone with a mental illness must take meds, low noise requirements, and so on. For a lot of the long-term homeless, the street doesn’t impose those rules and can actually seem preferable, despite its well-known hazards.

Worcester Massachusetts, where I went to college, has a famous, controversial “wet” homeless shelter. That shelter’s philosophy is simple: the homeless are better off in a relatively safe place, even if they want to drink, rather being forced onto the street by sobriety rules. Not surprisingly, the neighborhood NIMBYs are not fond of the shelter. This schism between wet and dry shelters demonstrate the way real homeless programs run right into all sorts of progressive ideal problems. Those problems can be ignored in the grant world, but they remain stubbornly entrenched in the real world. Gravity opposes the best intentions of rocket engineers.

To return to our previous point, in neither real world or the grant world does the size of the homeless population really matter. In the real world, there is nothing at stake in whether L.A. has 54,000 or 36,000 homeless. Neither number is going to an increase in the number of beds available—which matters—or the rules associated with those beds. In the proposal world, homelessness is always a crisis that needs just a few more grant dollars to fix—within, say, the next 20 years.

→ 1 CommentTags: Government · Grants · Housing

Issues Facing Old-Line Nonprofits Differ from Those Facing New Nonprofits: Think Bambi Meets Godzilla

June 29th, 2014 · by Isaac Seliger · No Comments

We’ve written various posts on the challenges of starting a new nonprofit (like this one), mostly because we get lots of calls from fairly new nonprofits or folks trying to get one off the ground. Last week, however, I got a call from an agency in a large east coast city that’s been operating for about 200 years. I’m not making this up. The nonprofit originally was an orphanage that morphed into a broad-based children’s services agency.*

Though the caller was delighted to recite the exceptional history of his nonprofit, I didn’t get excited, as we we’ve worked for many nonprofits that have been around for decades—including one in a big Midwestern city that started in 1860s as a “settlement house” in the vein of Jane Adams’s Hull House. By now Seliger + Associates is older than many nonprofits.

While the caller was interested in a standard-issue federal RFP that’s on the street, we also talked over the challenges of keeping an Ancien Régime agency going in the face of an endless onslaught of Nouveau Riche competitors. Nonprofits face the innovator’s dilemma too. They must evolve over time and not get stuck in the “these are the services we provide” trap. It helps that most long-established nonprofits have contracts to provide capitated services or services with handy third-party payers (e.g., foster care, family reunification, residential care, primary health care, substance abuse treatment, etc.). Capitated-service agencies have a base cash flow, which they supplement with fundraising and grants (that’s were we come in).

Unlike new agencies, which are struggling for recognition and any funding scraps they can find, the main challenges old-line agencies face are relevance, ossification, and the inevitable disputes that arise with donors and funders.

Old-line agency must meet emerging needs. For example, there is apparently an astounding, sudden and unexplained surge of unaccompanied Central American children crossing into Texas this year, and they are essentially begging to be “caught” by the Border Patrol. This could reach as many as 100,000 random kids this year, who will overwhelm the current residential care capacity in the border states. The border patrol turns these kids over to Immigration and Customs Enforcement (ICE), which then hands them off to DHHS for transportation and temporary or permanent—depending on your interpretation of immigration laws—resettlement in small and big cities across America.

Not surprisingly, the Obama administration is requesting $2 billion in new funding to address this human tidal wave or humanitarian crisis, once again depending on your point of view. I’m confident much of this money will end up as competitive grant opportunities from the DHHS Office of Refugee Resettlement (ORR). As the former White House Chief of Staff and current Chicago Mayor, Rahm Emanuel put it, “you never want a serious crisis to go to waste.”

Say you’re our former midwestern client and have been around since the Civil War. You provide family and child support services but not residential care, so it’s essential to develop this capacity; thousands of Central American refugee children are likely to be dumped into your service area. You should meet this new crisis, as part of your mandate and mission, while at the same time bolstering your revenue with tidy ORR grants. This is a basic “win-win.”

Regarding ossification, old agencies are usually larger and bureaucratic, mimicking the funders that support them. It’s easy for a large, established nonprofit to become moribund, not only in the services they deliver, but also in the way in which services are delivered. Old agencies are less likely to adopt new technology and cultural practices—like contacting clients and conducing outreach through social media—because they do things the way they’ve always done things. Change is hard and inertia is seductive. This phenomenon is not limited to the nonprofit sector. Examples in business are common: huge companies like Motorola, Sears and IBM (before IBM reinvented itself under the remarkable CEO, Louis Gerstner) rise, lose focus or miss market shifts, and fall.

Finally, old-line nonprofits will often become embroiled in disputes with donors and funders. This can range from rich Mrs. Himmelfarb, who makes $100,000 annual donations, getting pissed off because she got seated at the wrong table at the nonprofit’s annual gala to the agency failing to submit required reports to the DOL for the agency’s YouthBuild grant. Once donors and/or funder program officers get annoyed with a large nonprofit, the organization may suddenly find itself in financial trouble.

Beneath the feet of every lumbering old-line dinosaur nonprofit are tiny new mammal nonprofits scouring around and trying to meet new community needs, provide nimble services in innovative ways, and eventually take away the big boy’s donations and grants.** The old-line nonprofit needs to address these upstarts by acting like Godzilla in Bambi Meets Godzilla, perhaps the best short film ever made.


* Fun fact: although it may be moving against the conventional wisdom to defend orphanages, Richard McKenzie explains why they’re often better than foster-style systems in “The Best Thing About Orphanages.” Saying “They’re better than the alternative” is not equivalent to saying, “They’re great!”

** Some grant programs are explicitly designed to provide challengers to incumbents; Community Health Centers (CHCs), for example, are eligible for “Service Area Competition” (SAC) grants. As readers of our e-mail newsletter know, the last two weeks have seen more than $150 million in SAC grants. Every geographic area in the U.S. is supposed to be covered by a SAC-funded agency, and every time a competition arises, new CHCs can try to wrest the grant from the existing grantee.

→ No CommentsTags: Advice · Government · Grants · Nonprofits

Until you get a call from your congressman and sign a contract, grant notifications don’t count

June 21st, 2014 · by Jake Seliger · 2 Comments

Last week, a client got a federal funding notification e-mail for a proposal we wrote a few months ago, and and the client started celebrating… until an hour later, when the Federal department sent a second e-mail, recalling the first and saying our client hadn’t really been funded.

That hurts, but it’s also not the first time something like this has happened to our clients. It’s a truism that, in any business, until the contract is signed and the money obligated, nothing counts. There are innumerable stories in the venture capital world about analogous shenanigans, including small companies that have picked up and moved, only to be told “just kidding.”

The cliché “money talks” exists for a reason. It’s still a pretty nasty mistake, however, for a federal agency to tell a nonprofit they’ve been funded when they haven’t. Mistakes do happen and one learns pretty quickly in grant seeking that federal bureaucrats are far from perfect.

Many of our clients first learn they’ve funded for a federal grant not from the funding department, but from their congressperson, or from a press release via their congressperson’s office. Every SF-424—which is the cover sheet for all federal proposals—has an input box for the applicant and project area congressional district(s). Congresspeople love to take credit for money going to their district, especially if the congressperson exerts no effort whatsoever.

It is common practice for federal departments to notify the affected congressperson when a grant award is made, often before the applicant is notified. Thus, an applicant may hear from their congressperson or read about it in local newspaper, before they get their notice of funding award email. The good news about this system is that it tends to make the program officers, who send out the funding award emails, marginally more interested in being correct. Congresspersons* get very angry at mistakes like the one suffered by our client. They tend to make a much louder ruckus than any nonprofit or public agency. Imagine Congressman Frank Underwood, as portrayed by Kevin Spacey in House of Cards, learning that the press release he just sent to the Gaffney Picayune Press concerning a YouthBuild grant to a local nonprofit having been sent in error because a DOL GS-12 sent award emails to the wrong list.

With our client, it’s pretty clear that both the proposal and client were fundable, but political machinations (or, more charitably, “considerations”) got in the way and the first email was sent in error. If you’re in the game, not every call goes your way. And the “game” here can refer to grant writing, but it can also refer to “life.”


* Is it “Congresspeople” or “Congresspersons”? Internet authorities appear split. Most seem to agree that it is a good idea to use “congressperson” as a lowercase, non-proper noun unless one is referring to a specific congressperson.

→ 2 CommentsTags: Advice · Government · Nonprofits

Talking About Progressive Ideals in Proposals: Money, Time, and Poverty in Grant Writing

June 15th, 2014 · by Jake Seliger · 1 Comment

No Money, No Time” helps set the cultural tone for the proposal world. In the proposal world—which does sometimes overlap with the real world—poor people spend time where richer people might spend money. Rich people are rich in many ways, but one is simple: their lives aren’t as organized around other people’s bureaucracies.* A nonprofit or public agency should help the poor, and it would be a good idea to incorporate the idea that poor people don’t have the time wealthier people do. This idea also ties into other important parts of contemporary thinking: if low-income people** weren’t so busy with day-to-day survival, they’d go buy arugula from the farmers market and make a salad, instead of buying Cokes and Big Macs.

There is some truth to the argument: a lot of low-income people are surrounded by endless appointments, case managers, social workers, parole officers (sometimes called corrections officers), and others who want a piece of their time. That time does add up. Years ago, we wrote a proposal to L.A. County for a nonprofit proposing to fund “master” case managers who would manage each client’s roster of case managers, parole officers, court cases, etc.

That’s not a totally superficial idea, though it has the ring of parody. If a poor single mom misses an appointment with her Child Protective Services (CPS) case manager, her kids might be put in foster care and she’ll end up in court. If she misses a shift, she might lose her job. If she fails to fill out out a form completely, she (and her children) might lose Medicaid or a Section 8 apartment. Life for the American poor is like a game of Chutes & Ladders—which is not an original thought, since Katherine S. Newman made the argument in a book called Chutes and Ladders: Navigating the Low-Wage Labor Market (and she’s written a number of others, all good; used copies are under $1 on Amazon. If you’re writing social and human service proposals, you can’t afford not to buy them).

In the proposal world, solutions spring from government funding, but in the real world, many of the problems derive from laws passed by legislatures. Among the poor in particular—who cannot afford good lawyers and who often cannot afford service fees and other penalties—lives get complicated by entanglement with officialdom and by drug prohibition. Legal issues usually involve drugs and kids; jailing men for failing to pay child support has a real, under-appreciated downside that is not being widely discussed (though you will hear about it in some places).

Even outside the realm of drugs and kids, we have so many laws, rules, and regulations—many not at all intuitive and many counter to the ways actual people want to live—that no one is innocent and everyone breaks laws, usually inadvertently. Tyler Cowen’s “Financial Hazards of a Fugitive Life” also describes this; the column is substantially about Alice Goffman’s brilliant book On the Run: Fugitive Life in an American City, which you should also read (and cite).

These laws came, not surprisingly, from good intentions. Before Prohibition, progressives theorized that getting rid of Demon Rum and John Barleycorn would mean that men wouldn’t get drunk, lose their jobs, eventually lose everything, and send their wives and daughters into prostitution. As any student of history knows, that didn’t turn out real well. Drug prohibition isn’t working out real well, but we’re still wasting a lot of time and resources doing it—in all sorts of ways.

Some costs to drug prohibition are quite small. Office Depot used to have tons of signs up saying, “We drug test employees.” But our thought was: who cares? We’re just asking someone where the pens are. If Office Depot’s employees want to light up after work, that’s their own affair. Nonetheless, Office Depot may have been unintentionally reinforcing poverty by denying jobs to otherwise qualified workers who like to dance with Mary Jane on the weekends (just like many social workers and case managers, at least in my experience).

The net result of this is the time crunch. The first article in this post should be cited in proposals—but only in the needs assessment. The problem should be forgotten in the project description, since participants must be assumed to have lots of time to serve on the Participant Involvement Council (PIC), community service etc. Other writers have also described the time trap of being poor: John Scalzi’s “Being Poor” is one particularly poetic example.

The time crunch is not unique to poor people and human service organizations serving them. Isaac actually tried to talk to the Small Business Administration (SBA) group in Seattle when he first started Seliger + Associates. They wanted him to sit through ten sessions on… something, all of which required lots of travel time he didn’t have because he was furiously busy writing proposals and finding clients. You do not discuss the nature of warfare, starting with the Greeks, when the enemy is shooting and your position is in danger of being overrun.

That being said, it’s useful to understand where these ideas come from. There are, loosely speaking, two big views on poverty right now. The one presented in the New York Times, which we’ve been discussing in this post, is the generally leftish, Democrat, progressive view, and that’s the view that should predominate in proposals. The other view is generally rightish, Republican / Libertarian-esque, and slightly more conservative, and that’s the view that the material conditions of being poor in the U.S. have improved incredibly over the last century or more. That’s where one gets The Heritage Foundation pointing out that 80% of poor people have AC, 75% have a car, two thirds have a TV, and so on. That’s also where one finds Charles Murray’s solutions in Coming Apart: The State of White America, 1960-2010 (these issues are not unique to the United States: Britain’s working class faces similar travails).

Just about everyone likes Murray’s research, but American progressives and conservatives tend to disagree on what the research means and what, if anything, should be done about it. Progressives tend to stress direct income transfer and government-paid supportive services, while conservatives tend to stress marriage, avoiding drugs, not getting knocked up outside of marriage, etc.

Beyond the drug war, there are other drags on the earnings and lives of poor people. Almost no one, right or left, mentions that the rent is too damn high, and that every time wealthy owners in places like Santa Monica, Seattle, and New York prevent new construction, they’re simultaneously making the lives of the poor much, much harder. Only a relatively small number of voices in the wilderness are speaking up.

We’re grant writers—that is, hired guns—so we’re not intensely political about these issues and are in it for the money (I know you’re shocked). Usually we shy away from the theory and thought behind grant writing, since most readers and human service providers don’t really care about it, or care to the extent that thinking translates into dollars.


* Isaac doesn’t like using the word “bureaucracy” in proposals, in any context, but I’m quite fond of it. Isaac says that isn’t a good idea to remind the bureaucrats reading a proposal that they are in fact bureaucrats who are making people jump through hoops in order to receive goods and services. He may have a point.

** In proposals, no one is poor and everyone is “low-income.” We use them interchangeably here only because a) this is where grant writers and nonprofit administrators come to talk about reality, not fantasy, and b) the original writer uses the term “poor.”

→ 1 CommentTags: Advice · Government · Grants · Media · Questions · Research · RFPs

The Grantnado Continues: The Department of Education Finally Issues the GEAR-UP RFP—and $650M for Early Head Start

June 8th, 2014 · by Isaac Seliger · No Comments

As I predicted last January, the Department of Education has issued the FY ’14 Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR-UP) RFP. While it took longer than I thought, the RFP butterfly has finally emerged from the hidden DOE cocoon. My previous post asked: Why do federal agencies usually keep prospective RFP issuance dates for programs like GEAR UP a secret?

I don’t have any idea why DOE behaves this way, but it’s detrimental to applicants.

The GEAR UP RFP was not issued unit June 4 and the proposals are due July 7—conveniently just after the 4th of July holiday. This means that applicants only have about 30 days to complete a very complex proposal. If they (or, let’s be honest: you) actually want to enjoy the 4th of July weekend, applicants really only have about three weeks to get the job done. If you’re a faithful GWC reader, however, you’d have known the GEAR-UP RFP was coming and could have been working on your proposal well in advance of the RFP being issued.

By the way, GEAR-UP is similar to the many TRIO Programs.* While the various TRIO programs have differing approaches, they all share the same basic goal: to increase the number of low-income students, minority students and/or students with disabilities completing high school, as well as earn a college degree. GEAR-UP is intended to help the same target groups “gear up” for postsecondary education through after school academic enrichment activities during middle and high school.

Continuing the self-congratulatory theme of this post, ACF just issued a huge RFP for the Early Head Start program. This bad boy has $650M up for grabs and 300 grants will be awarded for early childhood education providers. At least the deadline for EHS, August 20, is reasonable—unlike the psychotic GEAR UP deadline.

Last October, Jake predicted that the then-government shutdown and budget deal would lead to a Grantnado of RFPs, as the feds untangled the RFP logjam. The late issuance of the EHS RFP illustrates that the feds have to move money out of the door in any given fiscal year; FY ’14 is unusual because lots of big RFPs are still being issued relatively late in the fiscal year.


* When Jake taught upper division Technical Writing at the University of Arizona, he assigned writing a mock program plan for the Educational Opportunity Centers (EOCs) program—which is part of TRIO—primarily because the EOC RFP was on the street at the time and he’d just finished one, so he was very familiar with the RFP and program. As Jake wrote in this post, his students—all of whom were college juniors and seniors—were mostly unable to write coherent EOC program plans. Perhaps they would have done better if they’d been GEAR UP participants in high school.

→ No CommentsTags: Grants · Programs

Partnerships to Improve Community Health (PICH)—Riding the CDC Grant Gravy Train

May 31st, 2014 · by Isaac Seliger · No Comments

Even after a hundred years as a grant writer, the feds never cease to amaze me. Last week, it was the CDC issuing a Funding Opportunity Announcement (“FOA,” which is CDC-speak for RFP) for an entirely new program: Partnerships to Improve Community Health (PICH). The program is funded through the Affordable Care Act (ACA)—or ObamaCare as it is sometimes known to its many friends.

PICH is great news: as Pink Floyd put it in Have a Cigar: “And did we tell you the name of the game, boy? We call it riding the gravy train.” This post explains the game.

The game is walkin’ around money, as we explain at the link. In this case, there’s $150,000,000 up for grabs, with max grants ranging from $1,000,000 to $4,000,000, depending on the population of the service area.

What makes PICH nearly pitch-perfect walkin’ around money is that the program funds community collaboratives that meet to essentially talk about improving health, but not actually do anything, like deliver healthcare. It’s all process and no services. This means that the grantee only has to form the collaborative, hold meetings, conduct needs assessments and develop the ever popular action plans. Since there are no services, there’s nothing to evaluate, except process objectives like the “composition” of the collaborative, number of meetings held, plans drafted, long tons of donuts consumed during meetings, and the like.

This should make most public health officers and nonprofit executive directors swoon. Get a PICH grant and you’ll definitely be riding the gravy train. And, since you’ll be the one with the gravy ladle, other organizations in your service area will be sitting on their hind legs begging for the sub-grants that are required under PICH.

For example, say you’re Executive Director or Chairwoman of the Healthy Owatonna Collaborative. To make your pitch for a PICH grant, you’ll need to gather input from, and meet the needs of, all segments of the “community.” An easy way to accomplish this is to propose involvement of population-specific or advocacy groups in the planning and implementation process.

If cyclopes are an important population in Owatonna, propose a subcontract in your proposal with the Owatonna Cyclops Improvement Association, which has its eye, so to speak, on health issues confronting cyclopses in Owatonna. The ability to pass out big subcontracts to local advocacy organizations is going to make you very popular, as lots of organizations will try to get their snouts into the PICH trough. The applicant and lead agency is the Gatekeeper to this largesse.*

An interesting aspect of PICH is applicant eligibility:

  • Government Organizations: Local public health offices, American Indian tribes or Alaskan Native villages, local housing authorities, school districts, or local transportation authorities.
  • Non-government Organizations: Nonprofits with 501(c)3 IRS status (other than institution of higher education), or nonprofits without 501(c)3 IRS status (other than institution of higher education.

Two aspects of the listed eligible organizations are curious. First, essentially every kind of non-business entity is eligible to apply for PICH, except colleges and universities, for some arcane reason. Universities are unlikely to want to improve local health, but transportation authorities are? Welcome to the odd world of federal grantmaking.

Second, nonprofits with or without 501(c)3 status are eligible. Most people’s reaction to the eligibility of nonprofit, but not tax-exempt, organizations is probably “WTF?

Let me explain.

Many community collaboratives for various purposes (e.g., health improvement, substance abuse prevention, services to homeless cyclopses, etc.) are actually unincorporated associations composed of representatives of nonprofit and public agencies, who get together once a month or so to eat donuts, drink beer (if they’re lucky), and opine on the subject of interest. In most states, however, it’s very easy to get a charter for the collaborative as a nonprofit corporation. As we’ve written about before, the hard part is not incorporating—it’s getting a 501(c3) letter of determination out of the IRS. So the CDC is encouraging informal collaboratives, which are willing to incorporate, or incorporated nonprofits, to apply. Very sweet.

Now, don’t let the fact that your agency may not actually be part of an existing health collaborative prevent you from applying. Remember, this is the proposal world, not the real world. A good grant writer should be able to create a plausible collaborative out of polka dots and moonbeams. I know we can, as we’ve written many funded proposals like PICH over the years, including an $800,000 HRSA Community Access Program (CAP) grant for a rural public health department in Illinois, a $900,000 OCS CCF-CEY capacity building grant for a youth services collaborative in Wisconsin, a $2,000,000 CDC Capacity Building grant for a national HIV/AIDs coalition serving African Americans, and a $2,000,000 CDC REACH-US grant for a collaborative in Virginia to reduce the incidence of diabetes.


* Sigouney Weaver, as Dana, was possessed by the Gatekeeper demon, while Rick Moranis as the hapless Louis was possessed by the Keymaster demon in the 1984 classic Ghostbusters, which was Jake’s favorite movie as a kid.

→ No CommentsTags: Government · Programs

The Challenges of Seeking Grants for a New Facility

May 27th, 2014 · by Isaac Seliger · 2 Comments

Facility grants are among the most difficult grants for a nonprofit to secure and almost impossible for a new organization with no track record.

Last week, a guy in Atlanta called about grants for a transitional living facility for pregnant teens. I immediately asked the caller if his organization had received its IRS Letter of Determination of tax exempt status under Section 501(c)3 of the IRS Code, and the organization’s track record. At first he said he had the letter, but after some questioning he finally admitted that he had just applied to the IRS.*

I know from decades of incorporating nonprofits that the organization was unlikely to get the all-important IRS letter for at least six months to a year. Ordinarily, I would have brought up the potential of the caller finding a fiscal agent to serve as the applicant, but he also eventually revealed that the new organization hadn’t actually done anything yet—and he was seeking capital grants to buy a facility for the proposed transitional living facility.

The conversation declined and he eventually hung up on me. Why? Because I told him, as I always do with such callers, what I told you in the first paragraph of this post: that “facility grants are among the most difficult grants for a nonprofit to secure and almost impossible for a new organization with no track record.” I suggested he consider seeking start-up grants to lease a facility, hire staff and so on. Nonprofits, like most businesses, should test their idea first and worry about long-term real estate second, or really eighth—behind a host of other factors.

It’s also challenging to get grants of any kind for transitional living facilities, which are sometimes called group homes, board & care homes, or sober living housing, depending on the population being served. Most such facilities serve a small number of residents—often only six, because of zoning restrictions, and rarely more than 25 or so.

Let me do the math: the organization seeks $500,000 to buy, renovate and equip a building for use as a transitional living facility to house ten pregnant teens. That’s $50,000/teen, without providing staff, supportive services and so on. If the funder simply gave $50,000 to the teen, she could rent her own apartment, provide child care, hire a personal case manager and have her nails done weekly. There’s really no need for the nonprofit.

Additionally, funders all know that most transitional housing operators charge rent to residents, which is usually provided at least in part by a third-party payer (e.g., SSI, foster care system, child protective services, insurance, family, etc.). Thus, a facility grant request requires a cash flow analysis and sources & uses statement to demonstrate a funding gap. Every real estate developer trying to get investors or a bank loan knows that a positive cash flow must be demonstrated, but in the nonprofit world of facility grants, the reverse is true: a gap must be demonstrated.

This is called a “but-for” analysis; but for the grant in question, the facility can not be purchased or built. In any other condition, the nonprofit faces supplantation problems. Back to my example: a sources & uses analysis might demonstrate that a $100,000 grant is enough to support a $500,000 facility acquisition, taking into account projected revenue, mortgages costs, and the like. Nonprofit executive directors, and especially founders of new organizations, never want to hear this reality; they want money for nothing and chicks for free.

Funders generally will not even fund the gap for new organizations with no track record, for perhaps obvious reasons. Most new organizations that require purchase of a facility are actually funded by a combination of a direct loan from the founder and/or a bank line of credit, secured by the personal guarantee of the founder or an “angel” who loves the project. This, of course, eliminates most would-be facility acquisition proponents, as they either don’t have much money, lack credit, and/or have yet to meet an angel.

The better, more realistic approach is to gather enough capital and/or grants to lease a facility, operate on a shoe-string and collect third-party payments. After a few years of successful operations, the organization can then plausibly seek capital grants, based on demonstrated expenses and documented projected revenues.


* For reasons that elude me, callers often lie to me about their nonprofit and operational status. Since I’ve been fielding such calls for 21 years, I recognize pointless obfuscation immediately. As Long John Baldry put it, “Don’t Try to Lay No Boogie Woogie on the King of Rock & Roll.”

Moreover, there’s little point in lying to your doctor or grant writers: what we don’t know can hurt you.

→ 2 CommentsTags: Advice · Clients · Nonprofits · Stories

Collaboration is Often Inefficient: The Camille Paglia, Mark Zuckerberg, and Chris Christie examples

May 17th, 2014 · by Jake Seliger · No Comments

Almost all RFPs include requirements for “collaboration” with local entities. Yet I recently read this from Camille Paglia:

After endless quarrels with authority, prankish disruptiveness, and impatience with management and procedure, I now see that hierarchical as both beautiful and necessary. Efficiency liberates; egalitarianism tangles, delays, blocks, deadens.

(Emphasis added.)

Furthermore, in the fascinating article “Schooled: Cory Booker, Chris Christie, and Mark Zuckerberg had a plan to reform Newark’s schools. They got an education,” Dale Russakoff writes:*

Early in the summer of 2010, Booker presented Christie with a proposal, stamped “Confidential Draft,” titled “Newark Public Schools—A Reform Plan.” It called for imposing reform from the top down; a more open political process could be taken captive by unions and machine politicians. “Real change has casualties and those who prospered under the pre-existing order will fight loudly and viciously,” the proposal said. Seeking consensus would undercut real reform.

(Emphasis added.)

Neither hierarchical nor egalitarian decision processes are automatically better. They’re different. Highly open, transparent processes work in some situations and don’t work in others. You’d never know that from reading contemporary RFPs, however, which make endless consensus building sound like an eternal truth akin the Second Law of Thermodynamics.

Many if not most successful companies aren’t run on a primarily consensus basis. At Apple, if Steve Jobs said the bezel should be one millimeter, then the bezel was one millimeter regardless of what anyone else thought. He got the right answers, at least in terms of revenue. The bosses at Google appear to get a lot of answers right. As we’ve said before, nonprofits are more like businesses than is commonly realized. They compete with each other, and within the organization the Executive Director can (usually) fire people at will. That’s particularly true when an Executive Director says, “This is the way it’s going to be,” and a subordinate staff member refuses, or wants to keep litigating after a decision has been made.

Sometimes fast, “wrong” decisions are better than slow, “right” decisions—and open, transparent, consensus-driven projects can be subject to self-interest. In Seattle, for example, it has taken literally decades to build even very simple light rail lines, in part because every constituent along the way first had to be consulted and then had to file a lawsuit, which had to be fought, and only then could the effort proceed. We’ve got so much process involved that in building that we’re too often unable to build anything.

In the real world, organizations collaborate to the extent they need to and don’t collaborate to the extent they don’t. Smart executive directors ask knowledgable parties for information and input, then they make the best decisions they can based on the information they have.

That can mean telling someone they don’t get what they want. That’s how life works, as Paglia understands. Subordinates who are sufficiently disruptive might eventually be fired. Those who think current management is dumb can decide that “You Don’t Have to be in a Shithole Nonprofit.” For most nonprofits in most fields, quitting and starting a new nonprofit is a viable option. There are some situations in which the local powers-that-be can block new entrants to market—as anyone who wants to provide homeless services and gets crosswise with their local Continuum of Care can attest—but in most situations grants, whatever their other flaws, are a market-based system.

Someone who thinks they can do it better than the competition can make a go. We’ve worked for lots of upstart nonprofits that want to take grants or contracts away from the local heavies. We’ve also worked for lots of incumbent nonprofits worried about local upstarts (threatening the local power structure is one way to ensure that better proposals get written). Neither upstarts nor incumbents are inherently “better.” The situation is always situational. Too bad RFP writers don’t realize it.


* We’ve worked for clients in Camden, albeit smaller but very similar to Newark, and parts of the article read like our needs assessments.

→ No CommentsTags: Advice · Government

Links: Classrooms, Sex Economics, Hackers, Bill Gates, Drugs, and Keep It Short

May 15th, 2014 · by Jake Seliger · No Comments

* Good news if true (and long overdue, whether this report turns out to be a true trend or a false growth): “Shaking Up the Classroom: Under an increasingly popular system called competency-based learning, students are promoted after they master material—not just because they have spent a year in a class.”

* “In-Depth Report Details Economics of the Sex Trade;” the funniest thing is the way pimps fill a niche created by prohibition. Take away the laws and the pimps likely go too.

* Have liberal arts degree, will code.

* The Bill Gates Rolling Stone interview; pay special attention to the sections about anti-poverty programs.

* Ham Sandwich Nation: Due Process When Everything Is a Crime. In other words, virtually anyone can be arrested for something in the contemporary United States.

* Keep it short.

* “Made in the U.S.A. (Again): The new industrial revolution won’t be in India or China. It will be right here in America.” But it likely won’t include a lot of jobs.

* Someone found Grant Writing Confidential by searching for “best grant writing certification.” There is no such thing because they’re all bad and pointless.

* “The Value Of An Engineering Degree,” which complements “Have liberal arts degree, will code.”

* Crowd funding is market research.

* “It’s Time to End ‘Rape Culture’ Hysteria.”

* “One big reason we lack Internet competition: Starting an ISP is really hard.” If I had Zuckerbergian money I’d fund ISPs.

* “Judge says prosecutors should follow the law. Prosecutors revolt.”

* Deeply chilling sentences.

* “Is HUD threatened by a Christian group’s plans to expand?” Unlikely; although Todd Starnes, the reporter, has probably never heard of this, it’s more probable that the group doesn’t want to join the local Continuum of Care.

* “Why RFPs Waste Time – Choose a Better Approach to Finding a Great Consultant;” almost all the other nonprofit-world blogs we’ve found are bogus, but this one isn’t. See also our post Why Seliger + Associates Never Responds to RFPs/RFQs for Grant Writing Services.

* Phages versus drug-resistant bacteria—really?

* It’s been at least 800,000 years since carbon-dioxide levels were this high.

* Addict. Informant. Mother. If rural towns in Eastern Pennsylvania have a heroin epidemic what hope do the rest of us have? So much for 40 years of the War on Drugs. Clearly, drugs have won this war.

David L. Kirp argues that Head Start should work like Section 8. He should consider how successful school bussing was.

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