Increasing the Capacity of Individuals, Families and Communities

Sub-Award Management

Designing Sub-Award Programs Overview | Determining Your Sub-Award Process

Developing Your Sub-Award Plan

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Deciding the Components of Your Sub-Award Program

1. Checking the Rules and Regulations
In developing a sub-award plan, it is essential to know the governing rules and regulations concerning Federal grants and sub-grants. General rules and regulations regarding Federal grants and sub-grants from the Department of Health and Human Services (DHHS) can be found in 45 CFR 74, as mentioned earlier. Other Federal agencies have similar governing legislation listed in various titles of the Code of Federal Regulations.

It is recommended that every intermediary organization that has received or desires to receive grants from a Federal agency familiarize itself with the Code of Federal Regulations for that particular agency, not only for information regarding sub-awards but also for guidance on Federal grant management.⁹ Review the following table outlining various Federal agencies and the corresponding titles of the Code of Federal Register for each.

Federal Agencies Code of Federal Regulations Reference Health and Human Services 45 CFR Part 74 Education 34 CFR Part 74 Housing and Urban Development 24 CFR Part 84 Justice 28 CFR Part 70 Labor 29 CFR Part 95

2. Identifying the Key Components
A number of key elements go into developing a sub-award plan, including types of grants, target groups for sub-awards, number of grants, amount of grants and the grant period. You may consider these in any order.

Determining the Types of Grants to Offer
Once you’ve determined your purpose, it’s time to look at what type or types of grants you want to offer consistent with that purpose. Based on its sub-award purpose, Associated Black Charities, a 2002 CCF grantee which represents and responds to issues of special significance to Maryland’s African American communities, identified three different types of sub-awards it offered to eligible applicants:

1. Organizational Development Grants: to provide basic operating support to emerging organizations that are interested in building infrastructure to deliver services in the community.
2. Capacity Building Grants: to provide operational/program support to increase the number of persons served.
3. Service Expansion Grants: to expand services by replicating an existing program or program element that is demonstrating "Best Practices."

Nueva Esperanza, Inc., a Latino faith-based community development corporation and another 2002 CCF grantee, offered two types of sub-award grants in its 2002-03 program plan:

1. Community Development Fund: to provide support to projects that show a need and use targeted resources to develop, expand and/or improve specific organizational, strategic, programmatic or resource-related capacities.
2. Strategic Leveraging Fund: to provide support to projects that present a plan to leverage other funding from public or private sources.

The University of Hawaii’s Compassion Capital Fund (CCF) project, Hawaii Moving Forward, offered one type of capacity building sub-awards to local faith-based and community organizations to assist them in increasing capacity to provide a particular social service or to make the service more effective in achieving a particular outcome. Targeting Organizations for Impact In developing your plan, it is important to determine what type of organizations you will target to receive sub-awards. As you focus on specific types of organizations, you are better able to plan outreach efforts, manage the flow and review of applications, provide training and technical assistance specifically designed for those organizations and achieve the purpose of your sub-award plans.

A Word about Competitive Sub-Awards Depending on the Federal guidelines in the program announcement you are applying for, you may need to offer all sub-awards on a competitive basis rather than pre-select awardees. The 2003 CCF Program Announcement specifically required that sub-awards must be given through a competitive process and may not be pre-selected. Not all Federal grant programs involving sub-awards state this clearly. Although you may know and have already pre-selected eligible and worthy organizations to receive sub-awards within your program scope, it is best to maintain a competitive process when distributing Federal funds.

Before you start to identify the specific type or types of organizations, see if there is any Federal guidance on the issue in the program announcement or in guidelines/directives from the Federal project officer. For example, the program announcement for the Department of Labor’s Office of Disability Employment Policy’s Intermediary Grants for Mentoring Youth with Disabilities stated that intermediary organizations may issue sub-awards to community or faith-based organizations that "have social services as a major part of their mission; are headquartered in the local community to which they provide services; have a total annual operating budget of $300,000 or less; or have 6 or fewer full-time equivalent employees."¹⁰

Likewise, the 2003 Compassion Capital Fund (CCF) program announcement requires that "applicants must develop sub-award plans that are consistent with the following principles…" Some examples of those principles include: "participation in the CCF sub-award program must be open to faith-based and community organizations" and that intermediaries should focus on providing sub-awards to "…small organizations…organizations that historically have not received grants from the Federal government…and organizations implementing programs that address priority social needs (a list of the priority social needs is provided)."¹¹

As you think about the organizations you will target, you may want to consider the following potential eligibility criteria for sub-awards:

• Faith-based and community-based organizations—Are you planning to make awards available to both faith-based and community organizations?
• Size of the organization—(determined by the number of staff or size of the budget) Do you want/need to specify a certain size of organization?
• Age of organization—Is it important to target new or emerging organizations?
• Service areas—Do you want to target organizations in a particular service area consistent with your organization and/or with the priorities of the Federal government (if those already have been identified)?
• Geographic location—Do you want to designate a particular location(s) (e.g., neighborhood, city, state, and region)? Or do you want to designate organizations in a particular type of location such as urban, rural or suburban?
• Funding history—Do you want to target organizations that have not received Federal funds in the past?

To illustrate how you might target organizations, let's look at a few examples of 2002 CCF intermediaries. Clemson University's South Carolina Rural Communities Compassion Project targeted organizations that were rural, faith-based and community organizations in South Carolina-located and servicing populations outside of the urban/area clusters of Greenville, Columbia and Charleston. The Institute for Youth Development, a national organization that seeks to improve the lives of youth through positive programs and messages, targeted three types of faith-based and community organizations:

• Established organizations that have a promising program and have unsuccessfully applied for Federal funding
• Established organizations that have a promising program and have not yet applied for Federal funding
• Start-up organizations with limited experience

The University of Hawaii, as the lead agency in the Hawaii Moving Forward program, targeted organizations that provided services in three priority areas: homelessness, families of incarcerated persons and individuals transitioning from welfare to work. In addition, the University specified they would target organizations that:

• Have been in operation for a minimum of two years
• Have annual budgets of less than $250,000

As you describe the type of organization(s) you will target, that description then becomes the basis of your eligibility requirements for applicants seeking sub-awards.

Deciding on the Number of Grants and Grant Amounts
After you have decided on the types of grants you will be offering and the organizations that are eligible, the next step is to determine the amounts you plan to offer in sub-awards both in total as well as for each sub-award.

If you are in the process of applying for a grant or have received a grant, you have likely determined the total amount you plan to distribute in sub-awards. The Federal Program Announcement for the particular grant program also may provide guidelines for the total amount. For example, the 2003 CCF program announcement requires intermediaries to provide at least one-quarter of the total Federal share for which they are applying in sub-awards to other organizations. However, it also encourages applicants to exceed this threshold, if possible.¹² The Department of Labor’s Employment and Training Administration Grants for Intermediaries solicitation for grant applications stated that “the intermediary is expected to sub-grant a substantial portion of its award to eligible local grass-roots organizations.”¹³

The next step is determining how many sub-awards you will offer and how much you will provide for individual sub-awards. Consider the following questions as you make this determination:

Number of Awards

• How many sub-awards can your organization effectively distribute and monitor during the budget period?
• What kind of additional T/TA support will the sub-awardees need?
• Will your organization be able to provide that level of support for the proposed number of sub-awardees?

Amount of Individual Awards

• What size grant amount(s) will make a difference to sub-awardees?
• What size grant amounts will sub-awardees be able to effectively manage?
• What size grant amount is appropriate for the particular grant type(s) that you are considering? (If you are considering more than one type of grant, you may want to consider different grant amounts commensurate with the grant types.)

Again, let's look at examples from the 2002 CCF intermediary organizations to help illustrate this aspect. Associated Black Charities identified three types of grants and determined that they would give a certain number of grants for each type as well as a certain amount per budget year. These are outlined in the following table.

Associated Black Charities Types of Grants Number of Grants Amount per Grant Organizational Development 21 $5,000 Capacity Building 21 Up to $28,000 Service Expansion 4 Up to $50,000 Total Grant Amount 46 $695,000

Nueva Esperanza identified two types of grants that they would provide for sub-awards. Like Associated Black Charities, they designated a certain number of awards and a certain amount for each type of grant.

Nueva Esperanza, Inc. Types of Grants Number of Grants Amount per Grant Community Development Fund 44 $8,000 average per grant Strategic Leverage Fund 5 $30,000 average per grant Total Grant Amount 49 $695,000

Other CCF intermediary organizations determined that they would offer just one type of award with a range amount for each award. The University of Hawaii provided a total of $600,000 in sub-awards to 21 organizations with awards ranging from $13,800 to $21,900.

Checklist for Determining Your Sub-Award Key Elements   Decide what type(s) of sub-awards you want to offer based on your goals and objectives Determine your target groups and organizations Determine the number of grants and the grant amounts you will offer Determine the length of the grant period

Determining Your Grant Period You will need to decide how long sub-award organizations will have to use and spend their funds. First, check the program announcement or contact your Federal Projects Officer or Office of Grant Management officer to determine if there are any guidelines or directives provided. If so, you will need to make your decision based on those guidelines. Sub-award funds generally are spent within the same Federal fiscal year in which they are granted. If circumstances do not allow for adequate time to spend the funds within the same Federal fiscal year, then you may want to extend the budget period to within the calendar year or within a 12-month period from notification of the sub-award. The important issue is that the budget period for spending meets all the Federal requirements for the particular grant.

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Designing Sub-Award Programs Overview | Determining Your Sub-Award Process