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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.

→ No CommentsTags: Links

Someone in the Federal Government REALLY Wants School Kids Counseled, as the “School Climate Transformation Grant Program” Shows

May 11th, 2014 · by Jake Seliger · No Comments

This week’s e-mail grant newsletter included this long-winded program title: “Office of Elementary and Secondary Education (OESE): School Climate Transformation Grant Program: Local Educational Agency Grants.” The program’s purpose is to offer yet more school counseling, although the RFP uses 50 words where five will due; it says the purpose is to “develop, enhance, or expand systems of support for, and technical assistance to, schools implementing an evidence-based multi-tiered behavioral framework for improving behavioral outcomes and learning conditions for all students.” I became exhausted reading this sentence several times—it’s a nice example of bureaucratic word salad.

Sound familiar? It should. We’ve seen a spate of nearly identical program RFPs recently, including:

All five programs have subtly different project descriptions but are all intended to engage in the same basic set of activities: getting “trained” adults to do something—on a one-on-one or small group basis—with students who have been reported by teachers or other “trained” adults in the kids’ lives. You could submit a proposal for any one of these programs, change the name on the header of the next proposal, and do more or less the same thing. The only exception is the last one, YEP II, which is less a Columbine-Newtown-response-style program and more of a traditional urban youth program of the sort that have been around for forty years.

In 2012 Isaac wroteSandy Hook School Shootings Tragedy Likely to Lead to New Grant Opportunities for School Security, After School and Mental Health Project Concepts.” The programs we’re seeing the Federal government issue are the ones Isaac predicted.

At their most basic level,* these programs are really mental health early warning systems: they’re trying to figure out which ninth grader is likely to bring a gun or knife to school this week. They’re like Foucault’s famous panopticon, or the Stasi, though better intentioned. We’re not convinced the effort will be successful, but it’s happening right now, and no one in the Federal government asked for our opinion. Smart LEAs and nonprofits are going to ride this grant wave.


* Free proposal phrase.

→ No CommentsTags: Advice · Education · Government · Grants · Programs

Speech Codes, Microagression and Grant Writing: Words that Shouldn’t (and Should) be Used in Proposals

May 8th, 2014 · by Isaac Seliger · 4 Comments

One of the most unfortunate changes in the academic world since I left the warm bosom of the University of Minnesota in the Great Frozen North over 40 years ago is the rise of so-called “hate speech codes.” These Orwellean codes purport to regulate speech to prevent “hate speech,” as defined by the local campus Thought Police, and thus avoid dreaded microagressions. This is pretty rich for someone who started at the U of M in 1968 during the height of campus free speech demonstrations regarding an essay, the title of which—”The Student as ________“— I can no longer put in print because of changing speech mores.*

George Orwell presaged the decline of real meaning in his 1948 essay “Politics and the English Language,” which is a must read for any grant writer.

In grant writing, there’s a strict, albeit unwritten, speech code that budding grant writers would be wise to learn. Here are some words and concepts to avoid—or use—in grant writing and why:

  • Bureaucracy: The bureaucrats who read typically read and score proposals might be offended if they’re reminded that they actually are bureaucrats and not saintly givers of OPM (other people’s money). Jake likes the word “bureaucrat,” which I find very annoying when I have to edit it out. By the way: don’t use the term “OPM,” either!
  • Victim: Never characterize the recipient of whatever human service you’re writing about as a “victim,” which is now seen as pejorative. For example, a homeless person is “experiencing” homelessness and a drug addled teen is “living with the scourge of addiction.” They are not victims of their situation.
  • Ex-offenders: Never refer to a formerly incarcerated person as an ex-offender. The term now in use is “returning citizen.” To me it sounds like they got back from a cruise, but who am I to blow against the wind?
  • Win: If someone is characterized as “winning,” this implies a loser—and we can’t have losers in grant writing. Like grade school soccer in some precincts, all players are winners and get a trophy (dodge ball is out). You can, however, use the hoary, but acceptable “win-win”, or even better “win-win-win” phraseology to summarize the wonderful world that will exist in the afterglow of project funding and implementation.
  • Guardian: “Guardian” is a legal term and should be avoided. Instead, when writing about at-risk children and youth, it’s best to always refer to “parents/caregivers” rather than just “parents,” since many of them live in the ever popular termed “single-parent household.” Parents/caregivers implies an extended “family constellation” (another great grant phrase that should be used) that is somehow looking after the interests of the young person, even though dad’s disappeared, mom’s incarcerated, but will soon be a returning citizen, and grandma’s “living with a disability.”
  • Disabled, and So On: No one is disabled. Instead, as above, they’re “living with a disability” or even better, “living with a condition of disability”. Why use four words when six will do? They can also be “differently abled.” Similarly, no one is blind, they “live with a visual impairment,” no one is deaf, they “live with a hearing impairment.”
  • Infected: People are not infected with HIV, but are rather “HIV positive,” or in shorthand, “HIV+”. This puts a positive spin on things, don’t you think? Or, I suppose you could try, “person of HIVness.” Phrases like “living on the down low” are acceptable, however. So is MSM (“men who have sex with men.”)
  • Of Color: Shorthand for minority residents is “residents of color.” Obviously, don’t say it the other way around!
  • Ethnic Capitalization: In a laundry list of ethnic groups living in a target area, do this: African American, Hispanic or Latino (Latino generally preferred in CA and the southwest), Asian and white.
  • Partnership/Collaboration: Every project is going to be implemented by a partnership or collaborative, even if it isn’t. Usually it isn’t.
  • She/he: It’s always “she/he” and “her/his,” not the other way around. Draw your own conclusion.
  • LBGTQ: The is for “Q” for “questioning” or “queer,” depending on your point of view, and has recently been added to the catchall, LBGT, for sexual orientation/gender identity. The whole gender identity issue may throw my “she/he” convention into a cocked hat. Maybe, I should start using “she/he/not sure” instead.
  • Poor: No one is never poor; a person or family might “economically disadvantaged” or “low income.” Describing the world in terms of “advantage” and “disadvantage” is a good; contrasting “economically disadvantaged residents” with their “affluent, privileged” neighbors is particularly good.
  • Career Ladder: Any job training or education effort should lead to a “career-ladder job” with “living-wage potential.”

I could go on, as there are lots more examples, but, I of course, have to finish the proposal draft I’m working on. This list may be updated as we think of more examples.


* Camille Paglia and I are the last people alive who remember the real ’60s left, which bears only a passing resemblance to and shared name with the current left:

My essays often address the impasse in contemporary politics between ‘liberal’ and ‘conservative,’ a polarity I contend lost its meaning after the Sixties. There should be an examination of the way Sixties innovators were openly hostile to the establishment liberals of the time. In today’s impoverished dialogue, critiques of liberalism are often naively labeled ‘conservative,’ as if twenty-five hundred years of Western intellectual history presented no other alternatives.

→ 4 CommentsTags: Advice · Writing

Seliger’s Quick Guide to Setting Up a Nonprofit Corporation and Getting a 501(c)(3) letter (I Hope You’re Not in a Hurry)

May 1st, 2014 · by Isaac Seliger · 2 Comments

We get a couple of calls a week from folks saying, “I’m in the process of setting up a nonprofit to help _______.” We always say the same thing: “Do you have your IRS 501(c)(3) letter of determination of tax-exempt status, and, if not, have you applied to the IRS?” Too often the response is “No” and “No,” or even-more troubling, “Huh?”, which means the caller doesn’t even understand what she’s doing.

We’ve never had anywhere useful to send these callers, but we’d like to—so here’s Seliger’s Quick Guide to setting up a nonprofit:*

  • Spend some time learning about nonprofits, including the IRS tax-exemption rules, as well as the rules in your state. Presumably one goal of a new nonprofit is to secure grant funds. Most funders expect your nonprofit to be incorporated in the state in which most services will be provided. So, if you want to help cyclopses being emancipated from the foster care system in Owatonna, Minnesota, don’t randomly incorporate in Florida. This step usually takes a few weeks.
  • Apply for a nonprofit corporate charter in your state, following the state rules, as well as the national IRS rules, with respect to board membership, composition, interested parties and so on. To do this, you’ll need appropriate articles of incorporation, but you might as well draft bylaws at the same time, as these will be needed shortly anyway for your state (probably) and your federal tax-exemption applications. This step will likely take a few weeks to a month.
  • If your state has a corporate income tax, apply for state tax-exempt status. This step can take a few weeks to several months—think “several months” in a state like California, which has a very complex application process; Pennsylvania, by contrast, has a simple, quick process.
    At the end of the above steps, you’ll have a conformed copy of your formation documents. “Conformed” is just a fancy way of saying a signed, state-approval stamped copy. You’re going nowhere with the IRS without conformed documents. This is a key point.
  • Apply for a federal Employee Identification Number (EIN). This is the only part of the process that is almost instantaneous.
  • If you haven’t given up or died of old age, you’re finally read to complete your Form 1023, which is the actual IRS application for determination of 501(c)(3) status. You need the letter of determination, because without it, your new organization is not exempt from paying taxes and, even more importantly, donations to it are not deductible by the donor.

Most foundations won’t consider a proposal from nonprofits that lack a letter of determination. You can always try to find a fiscal agent while you’re waiting for the IRS to respond to your application, but that carries its own problems, as we discuss at the link.

Wait you will: it can take the IRS anywhere from three months to several years to approve your 1023. Along the way, you’re likely to get a series of interrogatories from the IRS that are designed to make you crazy, discourage you from continuing, or are genuinely aimed at ferreting out phony applicants, depending on your point of view.

If you do the math, you’ll see the completing the nonprofit formation process typically takes about nine months to two years. This news usually comes as a shock to the hopeful but frequently hapless callers I mentioned at the top of the post. We generally advise such callers to contact an attorney or accountant in their area that works with nonprofits and can help them with the paperwork.

I incorporated my first nonprofit over 40 years ago, when I was a young and starry-eyed intern, but the process is much more complex now. Trying to to this yourself or using one of the $99 Internet incorporation outfits is penny wise and pound foolish. You have been warned; as Robbie the Robot said, “Danger Will Robinson!

There is one way of forming a nonprofit more quickly (and it is not the “expedited review” offered by the IRS for an additional fee, which I don’t think actually speeds anything up). Instead, you wait for a giant disaster and try drafting behind it like cyclists behind a big rig.

After events like 9/11 or Hurricane Katrina, state tax officials and the IRS will often quickly approve new nonprofits because of obvious need, even if the proposed nonprofits have no apparent connection to the disaster. Most of the time the IRS and state tax officials are as motivated as any kind of government bureaucrat. Only the possibility of widespread political heat and anger motivate them to act with the kind of haste one otherwise associates with Amazon.com.

If you have a plausible charitable purpose, don’t be discouraged by the process. Thousands of nonprofits get incorporated and receive their 501(c)(3) status every year. Even the NFL is nominally a “nonprofit,” albeit a 501(c)(6) and it made almost $10 billion last year. Stay the course. Don’t lose heart. And while you’re waiting around for a disaster, you might as well start down the IRS Yellow Brick Road.


* The various state and federal fees are going to run around $800. They’re not refundable.

→ 2 CommentsTags: Advice · Government · Nonprofits

Seven Years Later, We’re Number One in the Grant Blogosphere

April 25th, 2014 · by Jake Seliger · 2 Comments

By at least one metric, we’re now #1.

Seliger + Associates started Grant Writing Confidential over seven years ago: Our first post was “About Us,” which both of us wrote. The first substantive post I wrote was “Zombie Funding,” and Isaac’s first substantive post was “They Say a Fella Never Forgets His First Grant Proposal.”

During the first two or three years we wrote the blog, we watched our fortunes on Google rise and fall, but we never got to the top because of established competitors—one factor Google considers in its ranking is the age of the site; older sites with recent updates generally get ranked higher than newer sites. By now, though, most of those competitors have disappeared, while we’ve persevered. Being #1 on Google is also a fickle prize: Google could change its ranking criteria at anytime, and there’s a cottage industry of people trying to fool Google. I’m not sure any of that really works, but then again people also try to rob banks despite the futility of that endeavor.

Our strategy is simple: post on topics likely to be interesting to executive directors, project managers, directors, and board members in nonprofit and public agencies, and make those posts based on our direct experiences in writing proposals, reading RFPs, talking to clients, and dealing with funders. Long-time readers know that we post about once a week. We’ve thought about posting more, but it’s not really feasible given the number of hours we already spend writing and preparing proposals. Grant Writing Confidential is only a small slice of that world.

One business slogan we’ve used for over 20 years is “we help you get your slice of the grant pie.” Grant Writing Confidential gives readers free, but valuable slices, of our experience and insights into the opaque world of grant making and grant seeking. We see things almost no one else sees and know things almost no one else knows, and that’s what makes this blog valuable.

→ 2 CommentsTags: Blogging · Stories

Volunteers: Nonprofits Really Want Their Money, Not Their Bodies

April 20th, 2014 · by Jake Seliger · 1 Comment

Today’s New York Times has a rarely expressed view (and, almost as rarely, a view that we share): that volunteering is largely a waste of time. In it, Aaron Hurst quotes an anonymous nonprofit executive director saying that “If I get another volunteer I am going to go out of business.”

It’s a common misconception that volunteers help nonprofits to do work that wouldn’t get done otherwise. But volunteers are actually there to keep them involved in the organizations and for purposes of seeking donations—or buying tickets for galas, art auctions, and so forth. The more contact a volunteer has with an organization, the more likely they are to donate. Nonprofits, like other businesses, need money in order to carry out their activities effectively—not untrained volunteers. Volunteer labor is often not worth the money that’s paid for it.

Decades ago, Isaac was the Executive Director of a nonprofit called the Hollywood-Wilshire Fair Housing Council, and he learned quickly to dislike volunteers. Volunteers didn’t know anything about fair housing and rarely had the skills that matched what the nonprofit needed. This is intuitive in your own life. Let’s say you need to get divorced. If a plumber shows up and says, “Gee, I’ll help with the divorce paperwork,” you’re going to be pretty unhappy with the outcome (so is the judge who has to read pleadings written by a plumber). If you have a clogged toilet you are not likely to want a lawyer in a $1,000 suit standing there charging you $350 an hour to scratch his head and ask which side of the plunger goes down.

When Isaac worked in Fair Housing, he realized how much time he spent messing around with volunteers relative to the amount of real work that got done. To him it seemed a waste of time, especially because volunteers would often screwup the work that then had to be redone by staff—but because they were volunteers, no one could say, “You screwed that up and need to do it right.” Consequently, volunteering comes to resemble a game in which volunteers are praised for doing almost anything, no matter how ineptly or counterproductively, like many public school students.

It can be more expensive to do something with volunteers than it is to do something without, in the same way that giving canned food to the homeless is much, much less efficient than giving them equivalent cash.

Wrangling and deploying volunteers is difficult. Let’s say you want to hand out flyers. You have to give them T-shirts, get them breakfast, and transport them—and handing out flyers is not usually fun and exciting. Volunteers who get bored just leave. Mixing volunteers and paid staff in the same activity tends to demoralize both groups, since paid staff are having otherwise paid hours stolen from them, and volunteers feel like they’re not doing work that wouldn’t get done otherwise.

Many would-be volunteers also find working with kids and helping the next generation to be more satisfying than working with average adults or “elders.”* But working with kids today means police background checks, constant supervision, and limited if any one-on-one time. Arranging the police background checks can be expensive and time consuming, and the costs for screwing up the background checks or not doing them properly could be catastrophic.

Finally, as Tyler Cowen points out in Average is Over, low-skill labor is not in short supply. The number of people willing to work for $9 an hour is high. The news is filled with stories about 20,000 people applying to work at every new Wal-Mart. In addition, anyone who wants to learn about teamwork or whatever else volunteering is supposed to teach can try working at McDonald’s or Wal-Mart. Those places are as good as anyone for learning such virtues and at least as good as volunteering for Habitat for Humanity.

To return to Hurst, he also says something that’ll resonate with our readers:

Working in a nonprofit is no guarantee of having meaning in your daily life. Many nonprofit employees lack purpose in their work. Their organization may be doing inspiring work in the world, but the day-to-day job doesn’t generate much involvement.

Find meaning elsewhere. There is nothing intrinsically not-meaningful in working for a corporation. In the past decade who has provided more net happiness to the world: Apple Computer or every nonprofit in America? It’s not an answerable question but one could create a reasonable set of arguments for each side in a debate.

In the grant world, there seems to be a general trend away from volunteering: we don’t see many RFPs that require volunteers or even mention volunteers. But almost every proposal requires collaboration with other organizations. That’s ascendent. When even the Department of Labor or Education stops talking about volunteers, you know the idea is dead.


* Free proposal word here; I prefer the more accurate, direct term “old people.”

→ 1 CommentTags: Advice · Nonprofits

Vaporware, the Media, and the Dept. of Labor’s “Trade Adjustment Assistance Community College and Career Training” (TAACCCT) Grant Program

April 16th, 2014 · by Jake Seliger · No Comments

The Associated Press is bringing vaporware, an annoying feature of the tech world, to grants: in “Obama, Biden announce $600M for competitive job grants,” an anonymous AP reporter manages to spend 746 words blathering on about job training grants (a topic almost as dear to our hearts as shocking celebrity nudes is to Us Weekly), but the reporter doesn’t manage to learn or say the obvious: name of the program. All that the reporter manages is “Applications were to be available starting Wednesday and due by July 7.”

Which is completely wrong.

Fortunately, the Department of Labor’s website has a little more detail in their exhaustively headlined story, “$450M in US Labor Department grants available to expand job-driven training partnerships between community colleges and employers,” but the DOL says that the program is called “Trade Adjustment Assistance Community College and Career Training”—which readers of our e-mail grant newsletter ought to already recognize at TAACCCT. (The DOL pronounces it “tacit,” though we sometimes use more colorful pronunciations.)

More fortunately still, Grants.gov actually rode to the rescue with the full SGA today: “Trade Adjustment Assistance Community College and Career Training Grants Program.” There are 50 grants available with grants to $20,000,000.

If you’re a community college and reading this notice, you want to apply for this program. Pity that you won’t learn as much from the popular press reporting. There are some mildly better articles—like Maya Rhodan’s in Time—but most of what you see in the media about TAACCT is garbage.

EDIT: The last TAACCCT reference we can find is from 2011, when it appeared in our e-mail newsletter; that year even had $500 million available, but the RFP for this year actually says $450 million available.

→ No CommentsTags: Advice · Government · Grants · Job Training

Don’t Overmatch: You Need to Look Like You Need the Money

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

As you no doubt know, many grant programs require matching funds, and we’ve exposed the secrets of matching funds. But in that post we didn’t mention one other key aspect of matching funds: don’t overmatch.

If there’s a 10% match, get a 10% match—and no more. There’s a signaling hazard: If you come up with a 90% match when only 10% is required, you’re demonstrating that you don’t need the money because you already (theoretically) have the money necessary to run the program. This in turn implies the dreaded supplantation problem, which is about as welcome in grant proposals as Sauron is in Gondor.

Beyond that top level reason, there are others. Let’s say you have a $250,000 project cost and in your proposal you say that a huge match will bring the project cost to $450,000. Somehow get funded anyway: now you’ll have to spend $450,000 on the project as part of the contract with the funder. Whatever you say the project cost is, that must be the project cost in the eyes of the Federal government. If you happen to get a project audit, you’re going to have to account for every dollar of $450,000. In the real world, people who happen to have an extra $200,000 sitting around can just add it to the program anyway, without promising to the Federal government that they’ll spend the extra $200,000.

There’s also the fact that funders calculate matches in two different ways: as a percentage of the grant or as a percentage of the total project cost. The first is easy to calculate: 10% of a $1,000,000 grant = $100,000. In the second method, however, its not quite as simple: Assume a $1,000,000 grant and a required match of 10% of the total project cost.

If you propose a $100,000 match in this scenario, you’re actually proposing a 9% match ($100,000/$1,100,000 = 9%). To get to a 10% match, the match must be $110,000 ($1,000,000 grant + $110,000 match = $1,110,000 total project cost and .10% of $1,110,000 =$110,000). Always make sure you know which method is being used by the funder before you start gathering match letters. In scenario two, if you document a $100,000 match, the proposal will likely be rejected as technically deficient and not scored. In Monopoly terms, you do not pass go and do not collect $200.

The only exception to the rule that says you should avoid overmatching happens when a program offers extra points for extra leveraging. YouthBuild is a prime example. In this case, if the required match is 10% but there are bonus points for a 25% match, applicants should find a larger match—but only to the point that gets the extra points.

In general, though we counsel clients not to overmatch. But, as we’ve said before, we’re like lawyers: we offer our clients advice, based on our 20 plus years of business experience, and they’re free to accept or reject it. Our advice is good and if we say that a thing should without doubt be done one way and not another its prudent to follow of advice (there are many other occasions in which there is no right answer, only sets of tradeoffs, and when that’s true we describe the tradeoffs). We were once working for a rural school district on a Department of Education proposal. The superintendent wanted to claim the value of all of their school buildings as a match, and therefore wanted to offer something like a $20 million match. We counseled him not to, and he didn’t.

The grant was funded.

In addition, take care about where the match is coming from. In most cases, federal dollars cannot be directly matched with other federal dollars, usually with the exception of CDBG funds. If you do, and anyone notices, your application will again likely be thrown out.

Anyway, there’s a pernicious line of thinking that goes like this: if some is good, more must be better, right? Wrong: if you take more Tylenol than you’re supposed to you could end up dead or on the waiting list for a liver transplant. Working out or running is great, until you lift so heavy or run so far that you hurt yourself.*

Maybe the overmatching rule seems unreasonable. Much of the grant world is a set of imagined behaviors and situations that don’t correspond well to reality. The matching fund process is one of those fictions that applicants have to go through, like a marriage of convenience to get a visa, to get to the end goal of the money—or, in the case of the marriage of convenience, to get to America.**


* Having done this recently, it’s a salient example that’s on my mind.

** I’m reading a wonderful book called A Bintel Brief: Sixty Years of Letters from the Lower East Side to the Jewish Daily Forward, which is a collection of pithy advice columns for Jewish immigrants from Russia and Poland in the early 20th Century, so the idea of making it to the promised land of America is on my mind.

But many of the immigrants discovered that, although America was a much better place than Czarist Russia (it’s also a better place than contemporary Russia for that matter), the streets were not and are not paved with gold, and all of God’s children have problems. In my own family, lore has it that one set of my grandparents used a marriage of convenience to escape Nazi Germany.

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