Issue 27: August 2009

What's New with the Economic Recovery Package:
by Leah Goldstein Moses

The February 13, 2009 American Recovery and Reinvestment Act represents “a strategic -- and significant -- investment in our country’s future”. Some of the efforts that will be implemented in partnership with State, local and non-profit organizations include, among other things:

• Computerize health records, reducing both mistakes and long-term costs;
• Increase renewable energy capacity;
• Weatherize and modernize 75 percent of federal building space and more than one million homes;
• Invest $150 billion in new infrastructure, including roads, bridges, and mass transit systems.

Minnesota’s organizations can benefit in three ways from the Recovery act. First, many State agencies will be direct recipients of funds for State operated programs and services. Second, some of the funds received by States will be passed-through, either by formula, competitive grant or service contract, to local governments, nonprofit agencies and companies. Finally, the Federal government may contract with or grant funds directly to local governments, nonprofit agencies and companies.

So far, $4.7 billion has been obligated to the State of Minnesota, with Health and Human Services and related agencies and Education receiving the highest proportion of funds.

Distribution of Recovery Act Funds to State Agencies

Source: State of Minnesota Spending Graph, http://www.mmb.state.mn.us/multisites/recovery/graphs

The largest recipient of funds in Minnesota is the State, and a portion of these funds will be passed through other organizations. For grants, the largest non-State recipients in Minnesota are the public housing authorities in the Cities of Saint Paul ($10.0 million) and Minneapolis ($18.2 million). All other federal grants directly to public and nonprofit organizations in Minnesota have been under $10 million.

Organizations that currently do, or hope to work directly with, just a few Federal agencies (for example, you receive grants directly from the U.S. Department of Education) can track those agencies’ efforts through their weekly reports (primarily narrative lists of activities) or monthly reports (which includes information about disputes and their resolution as well as grants given).

Contracts that are signed with organizations (primarily for-profit corporations, but many might work with non-profits to either deliver some of the services or support to show their commitment to the local economy) are listed through the Federal Procurement Data System. Minnesota’s largest contracts that are related to the Recovery Act went to Hammel, Green and Abrahamson ($8.7 million, for architectural work in Ft. Snelling), Bongard’s Creamers ($5.7 million, for producing cheese), and the Meyer Contracting ($5.4 million, for renovating the Humphrey Job Corps Center).

If your organization hopes to benefit from Recovery Act funds, there are a few key things to keep in mind.

First, although the six months since the Recovery Act may feel like a long time, the spending has moved incredibly fast by federal standards.  For several of our clients, grant applications had to be submitted within a matter of weeks as opposed to the 2-4 months they were used to.

Second, not all (and to date, very few) funds will come directly to nonprofits or local governments from federal agencies. Because the State is the largest recipient, maintain contact with State agencies to determine how they plan to use Recovery Act funds and whether any will be contracted or granted to other agencies.

Finally, there are two clauses that are universal to every Recovery Act funding stream. The first is a clause requiring rapid reporting of results. At the conclusion of every quarter, a funded agency must report within ten days about activities and outcomes. That means that agencies must have current data at their fingertips virtually all the time. Second, regardless of the overall purpose of the funds, recipients must show how many jobs were saved or created—meaning that one item agencies will have to track is employment.

Final thoughts: the acronym ARRA (American Recovery and Reinvestment Act) will tip you off that funds are related to the Recovery Act. Large Recovery Act investments are expected to continue over the next two years, and taper off after that. Because the Recovery Act has been touted as requiring unprecedented levels of transparency and accountability, think strategically about you can help the primary funding agency meet that target. Finally, job creation and recovery is a primary goal. If you will use ARRA funds to add positions, begin planning for and describing how those jobs will be sustained once the funds expire. ___________________

An overview of the Recovery Act can be found at http://www.recovery.gov/?q=content/act. The full text of the Act, along with an opportunity to leave comments, can be found at http://www.whitehouse.gov/the_press_office/ARRA_public_review/.

Detailed expected expenditures by Source, State Agency the funds go to and Funding type are listed at http://www.mmb.state.mn.us/doc/citizen/summary.pdf

http://www.recovery.gov/?q=content%2Finvestment-award&type=grants&state=MN&budget=10&agencyid=&Button1=Go

http://www.recovery.gov/?q=content/agency-weekly-reports

http://www.recovery.gov/?q=content/inspector-general-financial-status-reports

GAO analysis, http://www.recovery.gov/sites/default/files/GAO-09-580+Recovery+Act.pdf

Talking About Funding
by Susan Murphy

You make a living by what you get. You make a life by what you give. - Winston Churchill

In August 2009, the Improve Group held another in our series of online chats. This month’s topic was Show Me the Money: Competing for funds in today’s economic reality where we discussed ways to compete for funding using your data, and what the more successful trends are when making the funding ask.  The talk was co-facilitated by Improve Group President and CEO, Leah Goldstein Moses and Greg Ritter, Principal of The Ritter Group. Mr. Ritter is part of our network of collaborators and has more that 25 years of expertise in major gift development, annual and capital campaigns and planned giving.

Leah began the chat by commenting on how clients are requesting deeper, richer, more meaningful data to help distinguish them when competing for funds. This is consistent with the direction government is taking in its requirements for Stimulus funding.  It is no longer good enough to be a great organization, you must be able to clearly say why you are, and how you will continues to be so in the future.

Bill Gates, while talking about school reform and Stimulus money at the 2009 National Conference of State Legislators:

“The institutions and innovations that are getting great outcomes should be expanded. Those that aren’t should be changed or ended.”* 

These are very uncomfortable words for nonprofits that rely on donations. Greg Ritter stressed that organizations need to be able to show what the current economic times have done to them and also show what success means, and how what they do will make things different, and for whom.

The online chat discussed the power of an emotional appeal backed by data.  Those who are giving will feel more invested to possibly give again if they hear about the effect of their gift has on the lives of others.  Example:

"Because of your donation, fifteen families that were facing foreclosure were able to remain in their homes. Thank you!"

In the way one might make an appeal to yearly donors, Leah suggested nonprofits can make a strong case for proposals for multi-year, federal or state grants by showing that the need will still be there next year and the expenses will keep rising.  Organizations need to be collecting data on process and outcomes to support their requests.

Among other topics covered in the online conversation were face-to-face asks vs. funding letters, the use of a logic model to help track success, and collaboration with other organizations seeking funds. The full replay of the talk can be found through a link on our website homepage. 

Our final online chat for the 2009 season will be held on Wednesday, October 14th.  Our topic: Self-Promotion for the Humble Minnesotan: letting your data do the talking (non-Minnesotans welcome). This discussion will assist non-profits and others who have great stories to tell by giving practical strategies on how to tell them, advice on charts and other data tools you can use to make your point, communication strategies, and how to put it all out there on the web and other social networking resources.  If you would like to receive a reminder about this free event please email me at susanm@theimprovegroup.com.___________________

* http://www.gatesfoundation.org/speeches-commentary/Pages/bill-gates-2009-conference-state-legislatures.aspx

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