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Monthly Archives: August 2012

The future of Federal discretionary spending is of considerable interest to many grant seekers, as well as to those who write grant proposals on their behalf. Many organizations rely upon it for their continued existence. In addition, many grant writers depend upon it for all or part of their incomes.


This post examines the present Federal budget for discretionary grant programs. Funding levels for such programs are determined annually through appropriations by Acts of Congress. As the Congressional Research Service (CRS) explains, “Congress can change, continue, or reverse trends in discretionary spending directly through annual appropriations decisions, or indirectly by modifying certain federal budget procedures, such as reinstating statutory limits on discretionary spending.”


Program Areas:

The Office of Management and Budget (OMB) organizes Federal grant making into nine program areas:

  1. Natural Resources and Environment Programs
  2. Agriculture Programs
  3. Commerce and Housing Credit Programs
  4. Transportation Programs
  5. Community and Regional Development Programs
  6. Education, Training, Employment, and Social Service Programs
  7. Health Related Programs
  8. Income Security Programs
  9. Justice Programs


Of these program areas, “Education, Training, Employment, and Social Service Programs” alone is slated to absorb 68% of the Federal reduction in discretionary spending.


Federal Discretionary Grants:

Total Federal grant outlays are the sum of mandatory programs and discretionary programs. The OMB reports that in 2012, total Federal grants are expected to be $584.278 billion (estimated), of which total mandatory grants are expected to be $424.925 billion (estimated). Total discretionary grants are expected to be $159.35 billion (estimated) or 27.27% of total grant outlays. The OMB reports that outlays for all discretionary grant programs had been $207.7 billion (actual) in 2010; thus a reduction of -23.25% is estimated for 2012 versus 2010. By contrast, outlays for all mandatory grant programs are expected to be $424.9 billion (estimated) in 2012, or to be increased by +6.04% over the $407.7 billion (actual) of 2010.


Trends by Grant Recipients:

The OMB sorts total Federal grant outlays by types of recipients. Two types – “physical plant grants” and “other grants” – are where most grant writers expend their time and effort. Out of the totals – which include both mandatory and discretionary – the OMB indicates that:

  • Payments for individuals are to go from 63.2% (2010)(actual) to 66.0% (2012)(estimated) – or to rise by +2.8% of the total
  • Physical capital grants are to go from 15.3% (2010)(actual) to 17.3% (2012)(estimated) – or to rise by +2.0% of the total
  • Other grants are to go from 21.5% (2010)(actual) to 16.8% (2012)(estimated) – or to fall by -4.7% of the total


Similar discussions organized by the two categories of discretionary and mandatory probably exist, but were not readily located.


Future Funding Trajectory:

One more indication of the future direction of Federal grant making is this: The OMB reports that total grants are to be reduced from 17.6% of total Federal outlays in 2010 to 15.7% in 2012. That is, they are to decrease to the lowest level as a percentage of total Federal outlays since 1995 when they were 14.8%.


The future of competitive grant making, in both public and private spheres, is of considerable interest to grant seekers and to those who work with and for them.


This post explores three trends impacting the future of private grant making: grants as investments, social media, and product-driven support. Its purpose is descriptive, not normative. Arguably, although the trends’ context is American, their scope and consequences are potentially global.


Grants as Investments:

The notion of grants as investments is a commonplace in venture philanthropy, but it is not unique to it, nor even to the world of private capital. It reflects premises that grant funds represent scarce social and economic resources, that they require careful stewardship and prudent use, and that providers of such resources ought reasonably to expect them to bear returns. The challenge for grant seekers is to demonstrate that their defined problems or needs – and their ideas or strategies for solving or reducing them – are worthy of an initial investment (and continuing or renewed investments in later years).


For grant recipients, the challenge is to demonstrate that they have made significant progress in solving or reducing those problems or needs. In the longer term, just as in other settings, if the investment underperforms, and evidence of this progress is weak or absent, the (public or private) investor is apt to invest its funding elsewhere – and to do so sooner rather than later.


Social Media:

Perhaps it’s too soon to tell if the emerging practice of awarding grants or gifts-in-kind based on the number of hits or clicks or ‘votes’ on a competition sponsor’s website is a marketing fad or an enduring trend. By hosting and advertising the competition, the sponsor creates a marketing buzz. There is little or no need for the contenders to craft formal proposals so long as they can rally more ‘votes’ than their rivals. Instead, the process replaces any more or less technical review of a proposal’s comparative merits with a popularity contest.


Product-Driven Support:

Manufacturing corporations usually seek to realize a profit on what they sell. By making their products available as in-kind gifts to school districts or hospitals or other entities they can create familiarity with their product line and brand. In turn, daily use can lead to loyalty and to a desire and decision to buy more of the products, particularly if they prove their value during use. The Chronicle of Philanthropy reports that during the 2010s corporate “donations of products are growing at a faster rate than cash.”


Sometimes a manufacturer’s product-driven support can be just as good as cash and its products can totally transform the places that receive them. The Apple Corporation once hosted Apple Partners in Education (Apple PIE) and awarded highly competitive grants of hardware, software, and extensive training to partnerships involving Apple, a school, and a college of education. The resources were worth as much as $150,000 over two years.


Many other corporations also offer product-driven support. In some circles, such as in health-related philanthropy, the trend of its use is accelerating. The challenges for grant seekers are to be able make effective use of the products they may receive, and to be able to tap other sources for the cash they need to be able to support their users and their ongoing use. If they lack options for obtaining cash, they may well be wiser to forego seeking an award of products.


A previous post explored three other trends impacting the future of private grant making: discretionary decline, asset attrition, and social entrepreneurship.



The future of competitive grant making, in both public and private spheres, is of considerable interest to grant seekers and to those who work with and for them.


This post explores three trends impacting the future of private grant making: discretionary decline, asset attrition, and social entrepreneurship. Its purpose is descriptive, not normative. Arguably, although the trends’ context is American, their scope and consequences are potentially global.


Discretionary Decline:

The Foundation Center reports that all foundations based in the United States are forecast to have awarded a total of perhaps $48.4 billion in grants during calendar year 2012 – an increase of as much as 3% over 2011. By contrast, the Office of Management and Budget (OMB) forecasts the Federal government to have awarded $159.53 billion (estimated) in discretionary grants to state and local units of government during fiscal year (FY) 2012 – a year-to-year decrease of $47 billion (or 23%) over FY2011.


The reduction in Federal grant making in the United States nearly equals the forecast total of all foundation grant making there. Most of the Federal decline ($32 billion, or 68%, of it) is expected to occur in discretionary grants for education, training, employment and social services. Private grant making is unlikely ever to make up anything near the amounts involved.


Beyond funding forecasts, other trends during the 2010s are also impacting the private grant making. Among them are asset attrition and social entrepreneurship.


Asset Attrition:

Study any 990-PF filing and one can see how much private foundations depend upon returns on stock investments to sustain their capacity to make grants each year. As measured using the Dow Jones Industrial Average, in August 2012, the stock market was performing at the same level (at 13,000 points ±), as it was four and a half years earlier. It takes some time before a foundation translates the values recovered in its investment portfolio into more or larger grant awards. Meanwhile, during the same 54-month period an annual rate of inflation change of 6.4% is likely to have eroded the real value of its investments.


Social Entrepreneurship:

A recent empirical study by EIM and the Dutch Ministry of Economic Affairs explored social entrepreneurship as an enduring trend in economic development. It found that social entrepreneurs tend: to be mission-driven in seeking to deliver a social value to the underserved; to act entrepreneurially; to act within entrepreneurially-oriented organizations that value innovation and openness; and to act within financially independent organizations that plan and execute earned-income strategies. Their objective is to deliver an intended social value while remaining financially self-sufficient. Among their goals in blending social and profit-oriented activities is that of reducing beneficiaries’ reliance on donations and government funding.


A later post will explore three more trends impacting the future of private grant making: grants as investments, social media, and product-driven support.

The future of competitive grant making, in both public and private spheres, is of considerable interest to grant seekers and to those who work with and for them.

This post explores three more administrative and political trends impacting the future of public grant making, particularly at the Federal level. Its purpose is descriptive, not normative. Arguably, although the trends’ context is American, their scope and consequences are potentially global.


Performance Results:

The Government Performance Results Act (GPRA) of 1993 and its sequel the GPRA Modernization Act (GPRAMA) of 2010 focus on improving the accountability of Federal agencies for the programs they administer. Both statutes provide for performance review of discretionary grant programs among many other activities. The GPRAMA attempts to streamline the former GPRA review process and to make the reports it generates more useful to Federal administrators and to legislators. One of its purposes is to provide key decision makers with more timely information, more often (quarterly), about the status of various grant programs and their progress in contributing to achieving measurable agency goals. Executive officers and legislators may use these performance reports to justify their subsequent recommendations, decisions, and votes about continuing to enact appropriations for such programs.


Fiscal Austerity:

During an era of record annual Federal budget deficits and record cumulative public debt, fiscal prudence and responsible governance seem to compel ever closer and ever more skeptical scrutiny of every budget line item and expenditure. In the same way and at the same as the Federal government redesigns itself for the 21st century, so will the Nation’s various states and territories. But where heretofore one or perhaps several Federal agencies may have administered a given grant program, in the near future each of the Nation’s 50-plus states and territories can expect to do so – as the administration of ever more of the remaining Federal grant programs is shifted to them – in another enduring and accelerating trend impacting the future of public grant making.


Program Redundancies:

Among the Federal budget watchwords of the present era are: reduction, consolidation, reorganization, elimination, termination, streamlining, and overhaul. The grand plan is to reduce or minimize duplication, fragmentation, and waste of Federal funds and at the same time to increase or maximize “effectiveness, cost-efficiency, or service delivery.”


One underlying premise driving this trend is that it is wasteful of public funds:

  1. if two or more grant programs focus on the same problem or issue area, or
  2. if two or more Federal agencies administer similar programs


Thus, in the sphere of Education alone, for fiscal year (FY) 2013, the Executive Office has slated 38 distinct US Department of Education grant programs to become 11 programs; and 33 science, technology, engineering and mathematics (STEM) education grant programs are slated to be ended entirely in FY 2013, after 11 of them were ended in FY 2012.


Other Federal agencies and grant programs are just as susceptible to the same imperatives: thus, in FY 2013, 55 Surface Transportation grant programs are slated to become five programs; and 16 US Department of Homeland Security grant programs are slated to become one program.


A later post will map and explore perils to the future of private grant making. Its topography of trends likely will include: asset attrition, social entrepreneurship, social media, grants as investments, and product-driven support.

The future of competitive grant making – in both public and private spheres – is of considerable interest to grant seekers and to those professionals who work with and/or for them.


This post explores four administrative and political trends impacting the future of public grant making, particularly at the Federal level. Its purpose is descriptive, not normative. Arguably, although the trends’ context is American, their scope and consequences are potentially global.


Targeted Funding:

Targeted funding is not new, but it becomes more popular and more intensive during periods of perceived or actual economic malaise. It reflects a widely held premise that public grant funds in general – and Federal grant funds in particular – should focus narrowly on the needs of certain pre-defined groups. As a question of public policy, it is most often framed in terms of advancing equal access or fairness or equity, least often in terms of resource allocation or even redistribution of wealth. The legislation enabling a grant program may designate its eligible beneficiaries as ‘underrepresented populations’ or as ‘underserved communities’. Statutory definitions amplify what these are. Those communities, subgroups, and individuals who seldom if ever qualify as targets may doubt the need for targeting; those who do qualify may demand more of it.


Budget Earmarks:

Creating earmarks is the practice – once rampant, very recently abated – of attaching or embedding provisions in Federal legislation that assign Federal appropriations to benefit one or more of a specific legislator’s local constituencies. The earmark recipients acquire the funding without putting the merits of their plans to any test – no competition, no panels or peer review, no ranking against other proposals. Those organizations and locales that don’t already get one or more earmarks may question why they should bother competing for grants when such shortcuts – and such certainty of outcomes – seem available for the asking.


Formula Drift:

The formula drift, as I term it, is the discontinuation of discretionary grant programs in new legislation and their replacement with formula-based ones, if any at all. The drift strongly tends to favor larger cities over smaller communities, more urban states over more rural ones. Recipients of such funding no longer need to compete for it, but can acquire it so long as they satisfy certain eligibility criteria, submit a pro forma application, and comply with legislated accountability standards.



Of two main types of accountability – fiscal and programmatic – it is a public grant program’s degree of success in obtaining desired outputs and outcomes across its pool of grantees, which more broadly impacts the future of grant seeking. If too many grantees report too little success, legislators may zero-fund the entire program. Even though grant awards may fund multiyear projects, every grantee must report its progress in achieving its objectives every year. And every year, discontinuation of funding for the entire program in subsequent years is possible.


Later posts will explore other trends imperiling the future of grant making in both the public and private spheres.

Corporate philanthropy takes two forms: corporate giving programs and corporate foundations. Direct giving programs comprise 77.5% of corporate philanthropy; corporate foundations, as endowed by a parent corporation, comprise the rest.


Corporate Direct Giving Programs:

Corporate direct giving programs are not separate entities under the law; thus, they do not need to file a Form 990 or a Form 990PF and no not need make other statutory public disclosures. Instead of endowments, they may include employee matching gifts and in-kind donations as part of their grant making efforts. Some of them will support programs that fall outside the scope of a corporate foundation.


Corporate Foundations:

Corporate foundations are discrete legal entities, separate from their corporate sponsors. They may be organized as public charities or as private foundations and as such they must file a Form 990PF and observe other statutory public disclosure requirements. They build their endowments in more prosperous years and draw them down in less prosperous ones. Corporate business interests commonly guide their giving.



One of key facet of all corporate giving is its links to the corporation’s business interests. Consequently, applicants benefit if they are located in communities where the corporation has facilities, and if their services benefit the corporation’s employees or their families. They can also benefit if they demonstrate how their project or initiative will advance the corporation’s bottom line of profit making.

In an age of elevated accountability for results, the Evaluation Plan is one of the most critical components of a competitive grant proposal.


For virtually every objective one might conceive, many types of thoroughly reviewed evaluation instruments are readily available. Often these instruments are widely used to generate and monitor data and to track and report on performance outcomes; yet, they may be new to any given applicant and its grant writing team.


Selecting Evaluation Instruments


In selecting one or more evaluation instruments to measure a specific objective in a proposal, an effective grant writing team will first locate and study relevant technical reviews found throughout the professional literature of program evaluation.


Evaluation Tools Graphic


The effective team is certain to look for:


  • Evidence for the technical review writer’s objectivity
  • Evidence for the instrument’s reliability
  • Evidence for the instrument’s validity
  • Limitations on the available evidence
  • Discussions of the instrument’s intended uses
  • Prerequisites for the instrument’s effective use
  • Required frequency and mode of use
  • Time required for administration and data analysis and reporting
  • Costs associated with using the instrument


Finding Technical Reviews


There are many possible sources of technical reviews of evaluation instruments. One of the best and most comprehensive resources is the Mental Measurement Yearbooks, a series published both online and in print by the Buros Institute. A second resource, of more limited scope, is the ERIC Clearinghouse on Assessment and Evaluation. Nearly every specialized and science-driven discipline will have its own review repository as well.


Reasons for Using Technical Reviews


Applicants need to persuade skeptics that their Evaluation Plan will provide evidence of program effectiveness. One way to do so is to demonstrate to wary readers that the proposed evaluation instruments are judiciously selected and are appropriate for their proposed uses. The findings published in technical reviews furnish invaluable assets for accomplishing this task. The rest hinges upon how well an applicant uses these assets in describing and justifying its Evaluation Plan.

Grant seekers should always monitor trends and patterns in grant making. Several social and economic trends have emerged during the 2010s. Their convergence is serving to flatten the growth curve of present and planned corporate philanthropy.


This post explores several continuing and new social and economic trends impacting corporate charitable giving. An earlier post described how corporations give to support charitable purposes.


Continuing Trend

The global economy and its stock markets continue to perform well below expectations. Economic growth is weak in most major economies. By most measures that matter, China, Japan, the United States, and the 17-nation European Economic Union all report struggling or sputtering growth rates.


New Trends

Corporate donation priorities are shifting from cash to products. Consequently, the rate of growth in product donations is outpacing that of cash donations, such as grants. Many products do have real value, but recipients cannot meet payrolls with them.


Nearly 90% of companies seek business benefits from their philanthropic pursuits. Product donations act as marketing tools to create brand awareness and encourage brand loyalty. They also act as catalysts for product demand and enlarging market share. When recipients become familiar enough with them, they often look for and buy more of them.


Targeted giving is becoming a new corporate norm, just as ‘targeted funding’ has long been a mantra in Federal discretionary grant programs. More businesses seek to protect their bottom lines by tackling a one or more of a host of critical social and environmental issues. As a result, specific corporations may target physical activity and wellness, multimodal transportation, or secure freshwater resources.


Social causes are also hot. Causes like affordable housing or workforce skills development draw corporate interest; giving to them can help businesses to access new markets. Such donations can help also to build an image of proactive corporate citizenship. Some more avant-garde corporations are using more intensively focused to spark faster or broader social change. However, in the same way as giving away products, being taking the lead in social causes is intended to build business reputation or build a brand, and thus bolster profit.



Among the foreseeable consequences of these trends are that a potential applicant or client may need to look elsewhere than corporate philanthropy if:

  1. its cause or issue isn’t in the current corporate spotlight, or
  2. it needs an infusion of cash rather than one of products or of short-term donated labor and/or expertise


As grant seekers, we can only wish corporations all the profits they can create. After all, we stand to profit when they do – or not long after!

In an era of global economic malaise, will corporations remain a reliable source of grants or other cash donations as we approach the mid-2010s?


This post describes how corporations give to support charitable purposes. A later post will explore several social and economic trends impacting corporate charitable giving.


How Corporations Give

Corporate charitable giving – including grant making – is a major component of private philanthropy. Other major components include community foundations and private foundations. Giving programs form 77.5% of corporate philanthropy; corporate foundations, as endowed by a parent corporation, form the remaining 22.5%.


Corporations offer support to charitable causes in many ways. Every mode of support contributes to the larger social good and thus has great value for those whom they benefit both directly and indirectly.


Many corporations donate products. Others provide services and expertise through their workers. Many sponsor special events or programs. Some contribute to employee donation matching programs. Still others award cash through grants or gifts.


Profit Drives Philanthropy

Cash donations to charity come from corporate profits. In many sectors, particularly in manufacturing and agriculture, profits are scarce as more consumers save rather than spend when faced with local and global economic uncertainties. In 2011, the median share of corporate profits given as cash donations to charity was 1%.


A Forecast

Corporate donation levels are likely to remain flat in 2012. A survey of leaders in corporate philanthropy revealed that 71% expected to donate no more this year than last, 2% expected to donate less, and 27% expected to donate more. In the near term, the flat donations curve does not bode all that well for organizations seeking a corporate grant or other cash support.


An overview of several of the larger trends affecting corporations as a potential source of cash support will appear in a later post.


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