Many in government are currently trying to overcome budget shortfalls, delegate among lean staff and determine re-opening strategies and telework. All these challenges make it an interesting time to be in the world of grants.
But grants administration is a complex enough endeavor on its own. Add the difficulties that come with being in the public sector following an unprecedented economic crisis (like the COVID-19 pandemic), and you have your work cut out for you.
If you are new to grants management and are wondering how to quickly get up to speed, this series is for those in state, local and tribal government, with insights for beginner and advanced grants personnel. Those who do not interact directly with grants may glean important insights as well, considering that grants are becoming an important source of revenue during this time. This is especially true because between now and the end of 2021, state and local governments are facing cumulative budget shortfalls of roughly $959 billion. Thus, the role of a grants professional has never been more challenging or important.
This first article will focus on the main types of grant funding and how such funding is disbursed. Some other helpful resources to help you get started include:
- This free online course from GovLoop on tools and best practices to maximize grant funding
- This free mini-guide from GovLoop that discusses the lifecycle of grants (from pre-award, to award, to closeout) and tools that can help you manage the minute details of grants management
There are two primary types of federal grant funding that are applicable to state and local governments: competitive grants and formula grants. Below is a further breakdown:
Competitive Grant Funding
Also known as discretionary funding, competitive funding is a process of proposal selection based on an evaluation by a reviewer or team of reviewers. Recipients are not pre-determined and funding is based on the merits of an application. Applicants must respond to a Notice of Funding Opportunity (NOFO) and ensure they can meet the stringent requirements of the grant while ensuring it is a suitable fit for their own needs. The best place to start searching for competitive funding is grants.gov.
Continuation Funding (formula or entitlement grant dollars)
These types of programs offer current award recipients the option to extend grants for the following year. While some programs are restricted to recipients only, others invite applications from existing recipients and new applicants. Because current recipients have demonstrated success in the delivery of their programs, priority is often given to those grantees. Thus, new applicants should consider partnering with existing recipients. Taking a regional approach can provide a competitive advantage, as in the case of COVID-19 response and mitigation, directing funds to a more broad impact for the community.
Mandatory Grant (Formula Grant Funding)
As opposed to competitive funding, formula grants are given to pre-determined recipients. These types of awards are usually allocated to eligible entities according to population and/or other census criteria, and all applicants who meet the minimum requirements of the application process are entitled to receive money. In many cases, formula grants are distributed from the federal level to states. States then determine how they will award funds to their local jurisdictions.
For example, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, cities and counties with over 500,000 populations are eligible to receive direct funding based on a population formula. New Mexico is a state with a relatively low state population of 2.1 million and is expected to receive a minimum amount of $1.25 billion from the Federal Government, according to Federal Funds Information for States. A city like Rio Rancho, New Mexico (with a population of less than 500,00) will receive an allocation directly from the state.
How These Grant Funds Get Delivered to Communities: Pass-Through Funding
Pass-through entities, such as state and local jurisdictions, whether through competitive or formula grants, can channel funds directly to local governments and nonprofits on the frontlines of serving communities.
As an example, funds available from the Federal Emergency Management Agency (FEMA) Category B Public Assistance Program are directly allocated to state departments (like the state of Arizona’s Department of Emergency and Military Affairs). Such departments administer the “passing through” of federal funds within their states. In Arizona’s case, DEMA will pass funds to other state agencies and local jurisdictions to meet community needs.
Tune in next week to read more about the primary differences between grantors and grantees, unique challenges they face in managing grants and important grants terminology.
As Chief Customer Officer for eCivis, Merril Oliver leads the company’s key business strategies, product development and growth initiatives. Having served four governors, both Democratic and Republican, Merril served as the Director of the Maryland Governor’s Grants Office, where she revolutionized an enterprise approach to full lifecycle grants management during 2015-2017. Merril is a past president of the National Grants Management Association (NGMA), having served three consecutive terms (2009-2012). During her presidency, Merril launched the industry-recognized standard professional certification of Certified Grants Management Specialist (CGMS®) and participated on the credentialing exam development team as a Subject Matter Expert (SME).