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Why should we focus on building systems versus programs?

What is Systems Building?

Those of us who work in social service related fields, like subsidized housing, early childhood education, and child welfare hear almost constant references to “systems building” from our funders, policymakers, colleagues and evaluators. Is systems building just another “jargony” term with a limited shelf life?

The answer is no: while systems building may be called by many different names, the concept is here to stay, because it represents the simple notion that you should look at the big picture of the system to figure out how better to serve the system’s target populations (whoever they might be).

A “system” in this context is the aggregation of different programs, services, policies, and funding streams that collectively respond to a particular need.

The term “systems building” refers to building a new system or working to improve an existing system that is fragmented, informal, or missing key pieces. ((www.coloradotrust.org/attachments/0001/1403/EarlyChildhoodSystemBuilding_IssueBrief.pdf))

 

What’s so complicated about systems building, anyway?

Systems building can be a messy and labor intensive process. It always requires collaboration and often requires navigating multiple complex bureaucratic departments and, at times, an entrenched and contentious political environment. However, the end result is worth it! An effective, coordinated system can make a difference in people’s lives in a way that simply improving siloed programs cannot.

Here’s an example: Take youth homelessness. The vast majority of homeless youth need much more than mere shelter. In addition to a new place to live, a homeless youth may need support from an attorney for a past infraction with the law, a medical home to ensure access to medical support and care, vocational training or access to a good GED program and/ or subsidized higher education so he can find a job and pay the rent in his new place to live, and counseling to address the child abuse, domestic violence, or other home-related problems that drove him to leave home and live on the streets in the first place.

This requires a pretty big variety of programs and supports to come together and “wrap around” the youth. Building the youth homelessness system involves collaboration between all these programs and services, and all these programs and services have other targets besides youth, their own funding constraints, and are accountable to their own populations, funders, policymakers, and evaluators. And this is just what one youth might need – it’s nothing like the universe of what all the homeless youth in Colorado might need in order to end their homelessness.

 

What are the ingredients needed for effective systems building?

Building an effective system requires, at its foundation, consensus building and planning – in essence, a thoughtful planning process that brings together a broad and diverse group of stakeholders who are willing to transcend territorialism and politics to come together around a shared goal.

But there are other things that are necessary as well:

  • A sound infrastructure on the policy / system level of governance and decision making.
  • People in the trenches doing the work and, subsequently, a well-defined management and operations system on the program/service level is another critical component.


In order to be able to effectively serve the population you are trying to support, careful thought and assessment needs to be dedicated to developing the service array/benefit design.

In concert with the service array/ benefit design, the system needs to have strong entry and exit plans for clients who ware transitioning out of a system. Does for example, that homeless youth who is transitioning out of the homeless system – and has finished vocational training and secured a job working in the solar energy field – have ongoing support to help ensure that youth know the basics of being a professional from showing up at work on time, to dressing professionally, and addressing and handling management?

What else does a system need? Relevant screening assessment/testing and service planning. A diverse array of funding to build and grow the system – the systems budget, funding and financing strategies.

How do you know if your system is operating at its highest potential? To ensure that your system is continually working to improve its responsiveness to the population it is trying to serve, you have to incorporate quality monitoring/data and evaluation.

Also, ensuring that the individuals providing the programs receive training and professional development can only benefit the system.

Finally, an effective system requires the input of the population it is working to serve. An effective system is culturally responsive and includes consumer and family leadership. Without consumer and family leadership a system is missing, perhaps, the most important contribution to developing a culturally responsive and fully operational system.

But don’t be alarmed by the length of this list! The good news is that you can work on these things one at a time – you just need to make sure you’re thinking about the big picture of the whole system as you work on each of these pieces. Whether your organization works to prevent domestic violence or is involved in environmental preservation, engaging in collaboration to support systems building, while often a long-term and messy proposition, will ultimately be the most powerful approach in accomplishing your goals.

 

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Braiding Your Funds: Tips and Tools

Braided funding is when you use multiple funding streams utilized to pay for all of the services needed by a given population, with careful accounting of how every dollar from each funding stream is spent. This blog will introduce you to a “Coordinated Finance Plan” – a tool for designing a braided funding approach that is streamlined and audit-ready.

What is a Coordinated Financing Plan?

A coordinated financing plan is:

  • A tool for talking with your funders so they can clearly understand the design of your braided system.
  • A tool to help your programmatic staff, your fiscal staff, and your board understand how and why each decision is being made.
  • A method for increasing the likelihood that every dollar of your funding is being used appropriately, including that blending or braiding multiple funding streams will not result in supplanting.

 

Part 1: The Program Budget and Cost Allocation

The program budget is the easy part. But what’s a cost allocation plan? This is the tool that will bring your budget to life and turn it into a braided or blended model.

  • If you are blending your funding, the cost allocation plan is a static budget that you can set in advance. Your priority will be to make sure you track sufficient information on eligibility and outcomes to report back to your funders.
  • If you are braiding your funding, the cost allocation plan is a flexible budget and accounting tool that tracks spend down across your funding streams.

Cost allocation plans in a braiding context are living documents that begin with estimations, but help you keep track of how you can flexibly allocate resources to meet monthly needs, based on eligible populations and services. In essence, the cost allocation plan provides you with upfront information to ensure you can cover all your expenses across all your funding streams and ongoing information on the progress of spending down your funding streams.

Want a tool to help you design your cost allocation plan? Go to: http://sparkpolicy.com/fiscalguides.htm#Guide1. Our team also has experience helping with this, so feel free to give us a call: 303-455-1740.

 

What does a Front Door/Back Door have to do with finances?

Just as in a grocery store, your program has a door people come through on their way in, and another one they exit on the way out. In a program, that backdoor is also where decisions are documented about the finances will be spent. Let’s break this down:

Front Door


At the Front Door, you will be identifying how eligibility and allowability are determined.

  • Eligibility refers to the clients who will be eligible for some or all of the services provided by your blended or braided model.
  • Allowability refers to the services that each client will be allowed to receive, based on their eligibility.

Questions to answer when you design the front door of your program include things like:

  • Who is responsible for determining eligibility? In other words, who has the tools and authority to decide whether a client should be accepted in your program?
  • Who is responsible for determining allowability? In other words, who has the tools and authority to decide which services are options for a new client in your program?
  • What is the protocol for turning clients away? In other words, what referrals or other supports can you offer as you reject a client who does not meet your criteria for eligibility?
  • How will you document eligibility and allowability? Where will the documentation live and when and how will it be used to make decisions along the way?

 

Back Door


At the Back Door, you will be identifying how allocation of costs to funding streams will be determined. The Back Door is responsible for making sure that all allowable services are paid for by appropriate funding streams, with appropriate services as defined by the eligibility and allowability of the clients. Additionally, the Back Door is responsible for maintaining appropriate spend-down across the funding streams, using a protocol designed to guide them. The protocol should also help the Back Door staff understand which funding streams to use first.

Some of the questions to answer when you design the back door of your program include things like:

  • Which funding streams need to be spent down steadily?
  • Which funding streams should be used whenever possible?
  • Which funding stream should be used as a last resort?

 

Keeping Track

Yes, this is where we discuss everyone’s favorite thing to do – document, document, document. While tracking how time and money are used is not a fun thing, it also doesn’t have to be as painful as we sometimes make it.

One of the critical components to a successful braided model, particularly a model that includes funding streams that fall under the federal OMB Circular A-87 (see Appendix A of the fiscal guide, link below), is to track personnel time by eligible populations/allowable services. To ensure the Back Door has enough information to allocate staff time to appropriate funding streams, all of the staff paid for through the braided model should keep time sheets that indicate the case ID of the client served and time spent on that client. If a staff person engages in non-service delivery activities, the staff person should also have a place on their timesheet for the major categories of activities, defined by what is allowable across the funding streams.

While you need this type of tracking system, one of the best things you can do for yourself is to create a system that is:

(1) As simple as you can get away with, only collecting exactly what you need to know. For example, if staff is tracking time spent, have them use a checkbox of options instead of open-ended notes. This simplifies for both the staff tracking time and the staff using the information for billing purposes.
(2) As flexible as possible, not programmed into rigid databases and complex accounting systems. Funding streams can and will change over time, whether due to your existing funding streams changing regulations or new funding streams being secured. Don’t create a system that is difficult to change over time. Be flexible, use easy to adapt tools like Excel, Word, Adobe Forms, Google Forms, etc.

You also need to keep track of your money – setting up your financial systems to have the same categories as those that your funders require you to report. Make sure your financial system aligns as closely as possible with your Front Door and Back Door plans. Don’t create any extra complexity in anything you do.

Want more information on how to build your front door and back door models and keep track? Visit: http://sparkpolicy.com/fiscalguides.htm#Guide1.

 

Align, Simplify, and be Flexible.

If you take nothing else away from this blog, remember these three terms and apply them to how you braid multiple funding streams. Align activities throughout your program, from how program staff check and document eligibility to how financial staff report to funders and track in their accounting systems. This will simplify everyone’s experience, from program staff to administrators to support staff. Don’t use rigid tools that make it hard to change and adapt with time – always remain flexible.

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Blend or Braid

The terms blending and braiding are used frequently, often together, and generally with little definition.  However, they refer to two very different approaches to fiscal coordination.   Rather than lump them together, let’s pull them apart and identify the settings where each is most useful.  Next week, we’ll explore some tips on how to develop your blending and braiding models.

 

Defining Blending

Blending funding involves co-mingling the funds into one “pot” where case managers can draw down service dollars, personnel expenses can be paid, or other program needs can be met.

Water In BucketIn order words, blending is a lot like a family’s bank account.  Each month, my husband and I deposit our paychecks into one bank account.  When we go to write a check for the mortgage, we can’t tell whether his paycheck or my paycheck paid for the mortgage.

So, if you can’t tell which funding stream’s dollars paid for a given expense, when can you do this type of funding?

  • When all of the services/expenses that are part of your program are allowable under all of your funding streams.
  • When you are able to track the eligibility of all of your clients, to make sure each funding stream has a sufficient number of eligible clients being served.

 

Defining Braiding

Braided funding involves multiple funding streams utilized to pay for all of the services needed by a given population, with careful accounting of how every dollar from each funding stream is spent.

BraidingTo simplify this concept, let’s use the visual of a braid.  If each funding stream is one rope in your braid, you initially have separate ropes.  In order to meet the needs of your client and pay for a variety of services, you bring those ropes of funding together.  However, your funders aren’t interested in paying for all of the services your client needs, so when you are done providing services, you pull those funding ropes apart and report back to your clients in the services each funding stream independently paid for.

Complicated, isn’t it?  Unfortunately, this is the approach we usually have to use.  Many of our funding streams are only permitted to cover specific services or may have time limits on the length of services.  By bringing multiple funding streams together, we can be more comprehensive in the services we provide, but we also need to be careful in how we track those services, so we can report back to our funders.

 

Which One Should You Use

A few signs that you need to use a braided funding model include:

Tip 1: Using federal government funding? You will probably have to braid your funding streams, unless you have explicit permission from your funder.
  • One or more of your funding streams cannot pay for one or more of the services you provide.  For example, if your services include screening for health issues and  one of your funding streams does not allow anything related to primary healthcare, you may need to braid.  Or, if your services include stipends for participation and one of your funding streams disallows any direct financial payment to client, you may need to use a braided model.
  • Tip 2: Using contracted federal funds that did NOT go through a grant process? Make sure you are designated a “vendor” – this decreases the complexity of the auditing requirements for some of the more complicated funding streams.

    One or more of your funding streams requires detailed accounting of the number of clients who received services paid for by that funding stream AND the services they received.  This has to be directly tied to the reimbursement request.  For example, you have to enter the client and their services into a database developed by the funder, which generates the payment amount.

  • One or more of your funding streams has frequent and in-depth audits, where auditors want to see how each dollar was spent, separate from all other programs and funding streams.

A few signs that you can use a blended funding model (less paperwork!):

  • You are largely using funding streams that come as lump sums, such as foundation grants, and have discussed your plan to blend funding with your funders (or included it in your grant proposal).
  • Tip 3: Using foundation funding? Most foundations allow their funds to be blended, but don’t forget to share your model with them and make sure it meets their needs!

    All of your funding streams are appropriate for all of your expenses.  For example, any funding stream you are using could pay for your curriculum expenses, stipends, and food for a youth leadership training seminar.

  • Your funders are interested in seeing the number of clients eligible for their funding who were served, the outcomes of those clients, and your overall program budget.  They are less interested in seeing exactly how many services their funding paid for, separate from all other funding.
  • You have open and frequent communication with your funder and can share your plan for how you will blend, get feedback, and move forward as partners.

Regardless of which model you use, talk to your funders and make sure they are comfortable with your choices, make sure you understand their contracting and auditing requirements, and be ready to solve problems together!

 

Reminder: Blending and Braiding are Just a Means to an End

One of the big downsides to the complexity of public/private funding models is how easily the funding can take over your mission.  The last thing we want to do as we work on blending and braiding funding is make decisions about programs, services, and clients based on the funding alone.  Funding is just a means to an end!  Ultimately, we want to make a difference with the funding, not just spend it.  Open communication with your funder is important because at the end of the day, even if they want to see the evidence that the money was spent appropriately, they chiefly want to know it made a difference.

For more information, visit Spark Policy Institute’s Blending & Braiding resources at: http://sparkpolicy.com/fiscalsolutions.htm.

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Introducing Spark Policy

At Spark Policy Institute, we are dedicated to helping communities and policymakers solve complex problems.  The Spark blog will focus on concrete strategies and actions you can take as you seek to make a meaningful difference on issues that are challenging, complicated, and critically important to you and your community.

 

What are complex problems?

Called “intractable problems” by some, complex problems have a mix of stakeholders at all levels of government, each of whom have different funding sources, mandates, and expectations; these problems also have private stakeholders, consumers, and communities that cannot be left out.

What are some examples?

  • As regards the obesity epidemic, finding the policy and individual behavior change solutions that can reduce obesity and its associated illnesses;
  • With healthcare access and reform, moving beyond playing politics and into making a difference;
  • With water policy in the arid west, finding solutions that balance environmental, agricultural, and population needs;
  • Healthy food access and its intersection with transportation infrastructure, water, land-use planning, nutrition education, and schools; and
  • Behavioral health and its intersection with all aspects of our lives, from workplace productivity to juvenile justice involvement to physical health outcomes.

Spark’s work is dedicated to the challenge of addressing complex problems such as these, bringing together a combination of research, engagement of all stakeholders, and information dissemination to help find solutions.

 

What do we know about these complex problems?

We recognize that regardless of which policy arena a problem emerges from, common issues are often present:

  • Policy solutions identified in one arena are likely to cause unintended consequences in others;
  • Money talks – part of identifying any policy solution is understanding how public and private funding operates, what the limitations are, and where to find opportunities to leverage;
  • Sustainable solutions and change in the status-quo are only successful when a wide range of stakeholders are involved in identifying both the problem and the solution; and
  • Finding solutions is only the beginning – implementing change is a long, slow process that requires commitment, resources, regular evaluation and feedback, and engagement of all the stakeholders.

 

How do we solve these complex problems?

As Spark has grown, we have built skills and expertise to tackle complex problems in a wide variety of arenas: human services, health, behavioral health, natural resources, agriculture, housing, juvenile justice, criminal justice, education, early childhood, and diversity / disparities.

The Spark team we have assembled over the years now includes a mixture of:

  • Researchers who are adept at working in messy, complex settings and bring a wide variety of methodologies to their work including fiscal and legal research, evaluation, network analysis, q-methodology, focus groups, and many other quantitative and qualitative approaches;
  • Facilitators who understand how to inform dialogue with external information and input, and can create a safe environment where all stakeholders, including community members, consumers, and even youth, can participate fully in complex policy dialogues;
  • Project managers whose approach reflects the needs of their clients, and who can remain flexible as the policy environment changes; and
  • Product developers, who specialize in ensuring reports, white papers, presentations, and other materials are rich in information and attractive in presentation, but more importantly, are committed to making sure no product becomes yet another report that sits on a shelf.

 

What does a “solution” look like?

Every problem has a different solution, and we know that the solutions that are first tried often fail to address fully all the complexity of the problem.  What does a solution look like?  There is no single answer – every system is different.  Maybe the solution includes changes in how funding is utilized by government agencies.  Maybe it includes changes to policies related to access to care.  The solution might be about how non-profits mobilize and educate their communities.  It may also include new voices having a say in the decision-making process.  Sometimes a solution is about changing how existing policies are implemented and sometimes it requires an overhaul of laws and regulations.

 

Join Us

Join the Spark Team in our dedication to solving complex problems.  What are the issues facing your community?  How can you tackle them?  Each week, the Spark blog will release new tips, tools, research, and information to help you find those solutions.

Do you have any questions you want answered?  Please let us know the topics you want to learn more about!