Posted on

Sustainability Planning ~ Realities and Strategies

The great recession and subsequent belt tightening of our funders— from local and federal government to foundations, corporations and individual donors— have created a challenging funding environment for many community based organizations. Yet sustainability, the word de jour of our funders, is inarguably a necessity.

How many times have you applied for funding from a foundation and inevitably, come across the following question on a grant application: “How does your organization plan to sustain its efforts beyond this grant?”

 

Sustainability Beyond Your Doors

While organizational sustainability is naturally a priority— increasingly, funders and policymakers also want to know how your organization is contributing to the overall sustainability of the system your organization operates within. Despite this upping of the ante, organizational and system sustainability often goes hand-in-hand; similar to bricks and a building—you need one to build the other, but without the vision of the building your bricks would serve no purpose. As a result of growing awareness and knowledge of how organizations function within and contribute to a larger system, there are now some best practices in sustainability planning on a systems level.

 

Set Your Direction for the Future Together

Including the system in your sustainability planning is about identifying how your organization can contribute to that bigger picture.

Community organizations are often working towards a higher purpose, such as reducing homelessness, and that higher purpose involves sustaining and improving systems of support for a target population, be it children, families, justice-involved juveniles, etc. Systems sustainability planning should include a thoughtful and structured process of meeting with your organization’s key collaborators and developing a road map.

Your systems sustainability roadmap define the direction you will all go together, including such things as:

  1. Increasing community capacity to serve a target population – is cross-training between organizations needed or is one agency using a screening tool that others might want to adopt as well?
  1. Identifying other nonprofits, government entities, businesses that should be at the table to ensure that services are not duplicated and that a continuum of services are available to young children and their families.
  1. Developing strategies to not only recruit those partners, but to meaningfully engage them in the collaborative effort.
  1. Defining clear roles of all the partners involved in collaborative efforts to improve the system through, for example, memorandums of understanding.
  1. Soliciting collaborative partners’ input on how to be good stewards of limited resources by asking specific questions, such as:
    • Are we working with our partners to develop shared staffing models and/ or shared office space? (Thereby reducing overhead and increasing opportunities to collaborate.)
    • Are there opportunities to pursue shared funding? (Opening up the door to additional funding opportunities because we demonstrate a thoughtful multi-partner design for decreasing duplication and meeting gaps in services.)
  1. Engaging funders as partners to address an unmet need by demonstrating that need through data and testimonials.
  1. Developing strategies to engage the public, not only increase awareness of the issue, but to secure the commitment of key policymakers who can help uncover new funding resources or shape policy that will benefit the target population.

 

This plan should also make the case for additional resources by showing decision-makers that early intervention could ultimately result in long term cost savings to your community. Including these elements in an achievable, collaborative action plan will not only benefit the system, but can demonstrate to your funders how your organization contributes to system sustainability.

 

Resources for Big Picture Sustainability

A Systems Improvement Training and Technical Assistance Project Toolkit (developed by the Washington D.C. based Institute of Technical Leadership) addresses the challenges experienced by innovative collaborative demonstration projects attempting to scale up and become integrated in larger systems of support for families and children. The Toolkit offers strategies and resources to help sustain emerging collaborative efforts so that they can meaningfully impact the larger system.

Posted on

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.