Strategy 7: Adjust grant timelines to improve uptake
Many CBOs manage a patchwork of funding for services, and smaller CBOs do not have financial reserves to hire staff until money is in hand. Thin financial margins also pose obstacles for these organizations to compete for cost-reimbursable contracts, which require organizations to deliver services that are reimbursed weeks or months in the future.
State administrators are adopting creative ways to adapt funding mechanisms to meet these challenges. Many states have fewer restrictions for grants under a certain threshold, often $10,000, which can support flexible “microgrants” or planning grants. State agencies and intermediary organizations may also be able to shift the timing of grant payments to earlier in the cycle, alleviating financial pressure for organizations.
Specific examples include:
Consider “micro-grants,” which are low-barrier innovation grants below state procurement thresholds:
State agencies and abatement funds that must issue grants through state procurement rules can consider offering lower-dollar “microgrants” or planning grants to community organizations. Grants under state procurement thresholds do not need to go through a competitive process and can be awarded non-competitively. Although grant dollars may be limited, they can be used flexibly to build CBO capacity to deliver services.
Strategy in action: Through the Local Impact Initiatives grant opportunities, New York’s Office of Addiction Services and Supports, which distributes a portion of the state’s settlement funding, offered community-based organizations project funding up to $9,500, a value just below New York’s state procurement threshold. Funding was made available for organizations meeting specific criteria, such as having a revenue total less than $300,000 or being registered as a not-for-profit organization.
Redesign grant payment structures to allow advanced grant payments:
When small organizations must wait until grant funding is received to begin hiring or planning, it may be months into a one-year grant until they are able to begin delivering services. To address these cash flow problems for organizations without upfront financial reserves, some states have redesigned grant funding timelines to frontload grant funding at the beginning of the grant.
Strategy in action: Legislation in Colorado allows the Department of Public Health and Environment to pilot an advance payment model for grant-funded projects, wherein the state can give up to 25 percent of the annual award up front to grantees. These grants are generally for three to five years, which provides stability for CBOs, and state officials offer extensive technical assistance to grantees.
Additional examples: Many state abatement funds and state agencies have shifted payment schedules to allow for greater upfront funding, which can alleviate burdens on both CBOs and administrators for managing reimbursements. South Carolina’s Opioid Recovery Fund Board awards 100 percent of grant funding up front, while Oregon’s Opioid Settlement Prevention, Treatment, and Recovery Board pays 75 percent upon signing of agreements. Using user-friendly technology such as Docusign can also alleviate funding delays.
Leverage existing state grant-funding mechanisms or sole-source awards to expedite receipt of funding:
CBOs that have already gone through a state procurement or approval process may have already been vetted and approved for funding. Using existing funding vehicles or cooperative agreements may help avoid hurdles and expedite funding to organizations that have already gone through necessary paperwork and compliance processes previously. While potential grantees are limited to organizations that have a previous relationship with the state, this allows states an opportunity to get money out the door quickly to trusted organizations. Some states have worked across agencies to create specific designations for CBOs that can help facilitate future funding opportunities.
Strategy in action: In an early round of settlement grant funding, Connecticut’s Department of Mental Health and Addiction Services distributed settlement funding to previous state funding recipients that support opioid abatement projects, allowing the state to fund reputable programs quickly. The department received instruction on which grantees to award with settlement funding based on decisions from Connecticut’s Opioid Settlement Advisory Committee. In addition to sole sourcing, the department also uses a request-for-proposal process to award settlement funding.
Strategy in action: Kentucky’s Finance and Administration Cabinet, which houses the Office of Procurement Services, created a minority-led and women-led designation for organizations that receive state funding or are registered with the state, with the goal to use the designations as avenues to enhance funding opportunities for such organizations and expedite receipt of funding, as the organizations have already been vetted.
Considerations for Implementation
- While microgrants can be quick and flexible for CBOs to meet urgent needs or gaps, smaller grants are often not sufficient to address underlying challenges faced by CBOs. Coupling this strategy with additional efforts to provide long-term funding and supports for CBOs will have the greatest impact.
- Expending opioid settlement funds quickly to address an ongoing crisis has been a priority in many states. However, urgency of getting funding out often conflicts with ensuring the funding opportunities are equitable. While leveraging existing funding vehicles or existing partners can help expedite funding into communities, this approach has tradeoffs regarding equity of opportunity and widening opportunities to new partners. It is important to strike a balance between meeting timelines and ensuring time for equitable planning and allocation of funding.
- There are invisible costs to bringing grant partners together. Investing in building avenues for funded applicants to connect can help a small amount of grant funding go further, as a cohort of grantees will be able to foster connections, learn from each other, and amplify each other’s work.
- Consider the amount of time grantees have to spend awarded funding — it’s often difficult for small organizations to spend a lot of money quickly, and initial processes may eat up a significant amount of a contract period. States should be mindful of the time it takes to move through contract processes and maximize time for program implementation.