There’s a Better Way to Manage Federal Grants, a New Report Shows
Agencies spent $921 billion through grants last year. We know surprisingly little about what that funding has achieved.
The federal grant system is vast. In fiscal year 2019, agencies spent $765 billion on grants to states, localities, research institutions, non-profits, and others—that’s more than the Pentagon’s annual budget. In response to the COVID-19 pandemic, grant spending surged to $921 billion last year.
Grants expert Jeff Myers, along with several of his colleagues, recently wrote in Government Executive:
“A new survey [of federal grant managers] shows that administrative costs have spiked, while funding agencies struggle to measure outcomes … It isn’t surprising that measuring recipient outcomes is challenging. Grant managers are accustomed to measuring and reporting funding flows and uses, timeliness, and compliance. But data about quality, customer satisfaction and mission impact are harder to define.”
As Myers noted, most of the attention given to federal grants management has been devoted to the tasks of awarding and distributing funds and, after they have been awarded, to tracking spending. Until fairly recently, surprisingly little attention has been given to tracking program outcomes, or more importantly, in trying to improve those outcomes.
The Office of Management and Budget has been the leader in promoting results-oriented grants. Last year, it led a task force that published a Grants Playbook that calls for “a paradigm shift in grants management from one heavy on compliance to a more balanced approach that includes establishing measurable program and project goals and analyzing data to improve results.” This shift involves changing roles and responsibilities across the grants system.
In a new report for the IBM Center, Federal Grants Management: Improving Outcomes, Shelley Metzenbaum argues that to shift the emphasis from administrative matters to improving outcomes requires rethinking the roles and responsibilities of the many players in the federal grant system. Many individuals—in government and elsewhere—are currently involved at various points in the life cycle of a grant program. They may influence both program objectives as well as the rate and magnitude of progress on those objectives. Their roles and responsibilities tend to be diffuse and, unfortunately, it is currently far easier to identify those working on fiscal, audit, and oversight matters than those working on improving program outcomes.
To drive improvement across the grants management system, Metzenbaum recommends developing three new roles: 1) designating grant program “outcome brokers”; 2) changing the role of traditional grant managers to become problem solvers; and 3) creating networks of grant program recipients who would comprise continuous learning and improvement communities.
Role 1: Designate Outcome Brokers
A 2014 Government Accountability Office report on the successful implementation of the 2009 Recovery Act observed that:
“Officials in the Recovery Implementation Office employed a collaborative, facilitative approach, while also leveraging the authority of the Vice President to facilitate the participation of stakeholders. The office functioned as a convener and problem-solver that engaged with a wide range of federal, state and local partners … Toward this end, the office adopted the role of an “outcome broker,” working closely with partners across organizational silos at all levels of government in order to foster implementation of the Recovery Act and achieve results.”
This role was embedded in the 2010 revisions to the Government Performance and Results Act but was dubbed “goal leader” for agency and cross-agency priority goals, not “outcome broker,” but the roles would be essentially the same.
Metzenbaum proposes identifying outcome brokers for every grant program’s outcome objectives. This person could be an existing official, inside or outside the grant program’s office or possibly outside the government.
The outcome broker would be responsible for bringing together goal allies and those with relevant expertise and resources to make progress towards the grant program’s outcome objectives. In some cases, the outcome broker might lead an outcome improvement team for the program or for broader strategic objectives. His or her role would be to work with grant program managers to:
- Help define a grant program’s focus and other goals, targets and key performance indicators.
- Catalyze discussions about the best ways to communicate program objectives to make them understandable, resonant, motivating, actionable and, where relevant, to reach agreement with outcome-focused partners on objectives and who will take the lead on different objectives.
- Encourage collaboration with other government offices addressing the same objectives and determine how best to coordinate to find and share relevant evidence, find and fill knowledge gaps, and make progress on common outcome objectives.
Role 2: Turn Grant Managers Into Problem Solvers
The role of grant program managers would be reframed to emphasize improving outcomes. This would require adopting a problem-solving mindset (with the support of an outcome broker) and would include:
- Clearly identifying and communicating outcome objectives and deciding where to focus both long term and short term.
- Identifying what works, what works better, and when situational differences might impede effectiveness of a solution that works.
- Promoting practices that advance progress towards outcomes while reducing less effective practices.
Can these responsibilities be added to grant managers’ existing responsibilities? Some might suggest that the increase in robotic process automation to perform routine administrative tasks holds promise for reinventing the role of program managers so they can shed the administrative routines in order to place greater emphasis on creative, problem-solving tasks.
Role 3: Create Continuous Learning Communities
One way to develop a problem-solving mindset and culture among grant managers is to proactively enlist help from those affected by the grant program to understand what works and what needs improvement. Rather than relying on a top-down “problem finding and punishment” approach, grant program leaders should develop a bottom-up learning and problem-solving approach.
Learning and improvement communities already exist in some grant programs. These communities, largely voluntary, bring practitioners and researchers together to build and use evidence to advance the grant program’s objectives. For example, some are:
- Organized by grantee organizations, such as the Data Design initiative of the National Head Start Association
- Non-governmental groups, such as Results for America
- Grant recipients, such as Nevada’s Department of Education, working with its school districts to determine root causes of underperformance, and
- Networked improvement communities, such as the Carnegie Math Pathways network of community colleges that focuses on improving success rates in developmental math courses.
These different models provide grants program officials alternative ways of creating communities for their own grantee and stakeholder networks that would work best for them.
Implementing Role Reinvention
There are existing examples of each of these three different roles proposed by Metzenbaum. The question is whether and how they might be scaled more broadly across the grants management system.
Interestingly, there is a pending opportunity that could be used to scale these examples. A recent law mandates the creation of an inventory of all federal programs, including grants. One element of this mandate is that all “federal financial assistance awards” (the formal name for grant programs) must annually report “results” to the extent practicable, based on data reported to the grant program office. OMB has undertaken a pilot effort to determine how best to develop the inventory. To date, the pilot has developed a methodology to identify categories of similar programs; OMB has thus far defined 12 categories and 34 agencies have reported about 700 programs and “sets of activities” (subsets of programs) that fall into these 12 categories. The 12 were selected because there has been some historical common understanding about them, such as programs and activities related to homelessness, broadband, workforce development, etc.
If categories such as these are ultimately used as an organizing construct, they might evolve into a set of portfolios of outcomes—related grants, programs, and activities that support a common outcome-oriented goal. And this is where an Outcome Broker—with the support of problem solvers and learning communities—might well become the focal point for ensuring such a portfolio of programs makes progress towards intended outcomes.
Where to Start
Half of all federal grant dollars are devoted to supporting health care programs, largely Medicaid. This might be a good starting point. There is a movement to address the social determinants of health, factors that are not directly health-related but contribute to poor health outcomes, such as economic instability, lack of access to quality education, and unsafe workplaces and communities. These and other factors are tracked by a network of health and social professionals inside and outside government via the federal Healthy People initiative.
Healthy People is a set of “science-based, 10-year national objectives for improving the health of all Americans.” Begun in the 1980s, it sets benchmarks and monitors progress over time of more than 60 health-related strategic objectives, grouped into five broad topical areas. Each objective is broken into sub-objectives that are linked to evidence and show trend information for each health objective and leading health indicator. When states develop their own health improvement plans, the site links to that state’s plans.
While the HealthyPeople.gov website does not currently link back to the various supporting federal grant programs, it could serve as a model of how grant program leaders could organize problem-solving efforts and communicate outcome-focused goals and relevant evidence. It could also serve as a natural starting point for designating outcome brokers and developing continuous learning and improvement communities.