With a housing crisis, overlapping major disasters, and shifts in federal grant funding affecting many communities throughout the U.S., the search is on to find effective approaches for existing resources and to create and deploy new funding sources.

Once you’ve been assigned to distribute and implement a new or re-purposed funding source to meet your community’s goals: How do you allocate the funding? Should distribution be competitive, formula-based, or on demand? Or, should you use the funds to provide technical assistance?

Pro tip: The answer to which funding method is the “best” is, “It depends.”

Match funding model characteristics to program needs

To help you think through options, we created a sorting tool that shows broad characteristics of the most common program models used by governmental and public-private partnership (P3) funders. First, ask:

• What is the need, and what mission is your organization trying to accomplish?
• What type of funding are you making available – grants, loans, tax credits, etc.?
• What types of organizations can use funding or implement projects – city agencies, neighborhood nonprofits, homelessness advocate coalitions (like CoCs), developers?
• What delivery capacity do those organizations have – beginner to adept?
  
  

Match compliance burden to goals

A good rule of thumb in designing a new program is to align the compliance burden with the funder’s purpose, by limiting documentation or data collection to the minimum necessary. This approach supports meeting appropriate internal controls and demonstrating progress toward achieving the mission, while rejecting all “nice to have” burdens (data or documentation) that would take resources away from achieving the mission. (A pro tip that can free up resources is to also review your existing programs for excessive compliance burden and to remove unnecessary policy pain points.)

Ultimately: There’s no one right answer

The best funding method for meeting a community’s goals depends on the specific needs, mission, and capacity of the organizations involved, as well as the type of resources available. This means the “best solution” will vary greatly; some cases will even call for a blend of funding models to most effectively deliver the funds.

Considering the factors outlined here, and aligning compliance requirements with the funder’s purpose, are the keys to maximizing impact while minimizing unnecessary burdens. Ultimately, thoughtful design and ongoing review of funding approaches will help ensure resources are used effectively to achieve meaningful outcomes.

Contact us to learn more or talk further through your program’s specific design needs.