How Are Community-Based Overdose Prevention Activities Funded?
Community-based organizations delivering overdose prevention and substance use services are generally funded by a variety of federal, state, philanthropic, and other funding sources. Figure 1 illustrates the various pathways by which federal, state, and opioid-settlement funding can flow through state-level agencies to community organizations to support programming and services at the local level. While state grant-making agencies (departments of health, behavioral health, and/or single state authorities) are responsible for administering many state and federal substance use funding streams, state-level opioid funding may either be administered by a state agency or a separately designated abatement fund depending on a state’s unique settlement structure. As discussed in later sections, a number of state-level agencies or abatement funds also contract with nonprofit or foundation intermediaries to distribute funding to community organizations while also providing networking support.
Unique Considerations for Settlement Spending
The terms of the National Settlement require that 85 percent of funding awarded to states, localities, and Tribes be used for abatement purposes (including a list of allowable activities). However, states have significantly more flexibility in allowable settlement funding expenses as opposed to federal grants. Through legislation and memoranda of agreement, each state has established its own policies for awarding settlement funding. Depending on agreements within each state, settlement funds administered through separately created statewide abatement funds may or may not be subject to the same administrative or procurement rules as other state-administered grants.
Why Do CBOs Often Face Challenges Accessing Funding?
Opioid settlement funds, like many state-administered funding streams, are often awarded through rigorous procurement, contracting, and competitive grant processes designed to promote transparency and accountability for taxpayer dollars. By design, these processes are often slow, with lengthy application periods and review processes for competitively awarded grants. Rigorous proposal and reporting requirements that ensure funds are spent according to legal and funder requirements often require an administrative capacity that may be out of reach for many CBOs operating with limited staffing and thin margins. Additionally, many CBOs operate on three- to six-month financial reserves, making it difficult for CBOs to hire staff or begin work until cash is in hand. These financial realities are often incompatible with cost-reimbursable state contracts or lengthy timelines for grant awards and reimbursement.
Taken together, these factors embedded in many state grant-making processes have the unintended effect of prioritizing organizations with existing resources, capacity, and grant-writing expertise over less-resourced organizations that may be well-positioned to deliver services within their communities. CBOs may also be reluctant to engage with state agencies given unequal power dynamics, low value proposition (if funding is inadequate and reporting burdens are high), or a history of strained relationships.
Throughout interviews and listening sessions, CBOs shared many of the challenges they face in financing and administering substance use and overdose prevention programming. Despite a wide range of perspectives and unique challenges across states, state administrators and CBOs often reflected a shared understanding of where state grant-making systems can be misaligned with the financial realities of CBOs — as well as where there are existing opportunities for collaborative solutions.