Tuesday, May 22, 2012

Grant Math

How is it that a multimillion dollar grant offered to an underfunded community college system can make a minimal difference on the ground?  The answer is in the math.

Let’s say the headline reads “Small State Community College Gets $15 Million for Job Training.”  

First, the state takes its cut; let’s say a third.  That leaves $10 million.  

Then the award is divided among the various campuses.  To keep the math simple, let’s say there are ten.  That means $1 million per campus.

But that’s misleading; it’s a total figure over a set of years.  Let’s say it’s a four year grant.  At that point, you have $250,000 per year.  (For reasons I’ll never understand, this is how the media insist on reporting union contracts.  “A nine percent raise over three years” sounds a lot bigger than “annual three percent raises for three years.”  People grab the “nine percent” number and get righteously mad.  It’s not helpful.)

As a condition of receiving the grant, each campus had to hire a project manager.  Figure a salary of $60,000, with another $15,000 for benefits.  Assume a small fraction -- let’s say another $15,000 -- for indirect costs of administration, such as grants compliance, IR time, office space, and the like.  So now you’re down to $160,000 per year for four years.

You hire a full-time person -- $50,000 plus $12,000 for benefits -- and a part-time assistant, making maybe $20,000.  Now you’re down to $78,000.  Subtract travel, office equipment, and the like, and you’re probably somewhere around $70,000.  

That’s assuming no major technical equipment purchases, proprietary software, or licensing fees.  (Admittedly, it’s also assuming that everyone is hired on day one, which typically isn’t the case.  There’s usually some breakage there.)

And that’s how a $15 million grant lands with a relative fizzle.

Meanwhile, the faculty are upset at “administrative bloat,” as if the grant money used to hire the project manager and full-timer would otherwise have been available for them.  The Feds are upset that you didn’t “move the needle,” and they respond with ever-more-taxing reporting requirements (requiring more IR time and clerical support).  And cynics point to the whole mess and conclude that the issue is that some people just aren’t college material.


A few suggestions:

1. An incremental increase in operating funding is more efficient than another grant.  That’s because the incremental increase in operating funding doesn’t require all-new hires; people who are already there can manage it.  If you don’t want administrative bloat, don’t require a new project manager for each new increment.

2. If you must go the grant route, the best way to do it would be to harness people who are already there.  Fund course reassignments, travel, subscriptions, and meetings.  Build the capacities of the people who will still be there when the grant expires.  (The expiration dates that come with “soft money” make good hiring a real challenge.)  Ideally, use the grant to buy time so that people can develop projects, rather than requiring them to develop projects to get the funding.  It’s still possible to build in accountability measures, but if you leave enough flexibility for people to make adjustments to their methods when the results dictate, then you’ll eventually get better and more sustainable results.

3. Remember the importance of local control.  The more prescriptive the grant, the less likely you are to get significant local support.  Again, operating funding is ideal, but if the money must be separate, use it to empower the people who are already there -- and will still be there later -- to achieve goals in their own ways.  The grant can -- should -- have goals, but it shouldn’t dictate means.  Projects work best when people put their hearts and souls into them, and they’re likelier to do that when the projects were their idea.  

4. Let’s have some honesty in the public relations.  So many grants have promised the moon and stars over the years that a certain cynicism has set in.  Let’s stop lumping multi-year appropriations into single headline numbers, pretending that the equivalent of one percent of a budget will be transformative, and declaring every grant a roaring success.

5. Kill the “supplanting” rule.  Many federal grants come with a stipulation that the money is to be used to “supplement, not supplant.”  In other words, you aren’t supposed to use grant money to pay for things you otherwise would have paid for with your own money.  It’s supposed to be used only for extras.  As external funding has moved from operations to grants, we’ve been able to pay for extras but compelled to hollow out the core at the same time.  This is madness.  And when you combine the “no supplanting” rule with a “sustainability” requirement -- a promise to keep doing those extras after the grant expires -- it becomes madness on stilts.

None of this is to denigrate the intentions of grants, or the real achievements they enable.  It’s just to say that if we’re really serious about getting bang for the buck, the first thing to do -- without which we’re just kidding ourselves -- is to support operating budgets.  Without that, we’re trapped in the cruel realities of grant math.