Funding, Budgets, and Market Pricing for New Opportunities The process to take on a new opportunity and what to do once you have that new opportunity
Your Presenters
Ken Shipman – Senior Program Manager NISH National Office Ace Burt – President & CEO Enterprise Professional Services, Inc. Roy Hung – Vice President, Operations Goodwill Industries of Hawaii, Inc.
Objectives After this session you will be able to: • Describe some of the environmental factors that effect market pricing. • Use web sites to help identify funding sources such as grants. • Define internal and external sources of funding for a project or contract. • Discuss a process to make a decision to enter a new line of business. • Integrate an operation and financial plan to implement the project. What happens when all the rules change?
Environmental Scan Federal Government Grants and Contracts (All figures are in billions of dollars) 2005
Grants
2006
2007
2008
2009
2010
441.6 489.9 429.7 418.2 663.8 550.3
Contracts 391.5 430.1 475.2 541.5 540.9 536.5 • What are the future trends for Federal Grants and contracts? • How will state and local governments be impacted.
Environmental Scan
Environmental Scan
Environmental Scan
Environmental Scan Economic Trends Which Will Affect Market Pricing and Competition • Increasing Total Federal Government Deficit. • Devaluation of the Dollar. Inflation Will Grow. • Large Cuts to Many Portions of the Federal Budget. Many Sacred “Cows” Will Face Cuts. • Federal Government Departments and Agencies Will Experience Cuts in Funding and Budgets. • Contractors Will Have To Decrease Contract Prices and Contract Costs to Meet Budgets and Stay Competitive. • Market Based on Price not Cost. Market Research Prevails. Know thyself.
http://www.grants.gov/ Provides "one-stop shopping" that will allow you to review synopses of all available competing funding opportunities for grants and cooperative agreements (and other types of financial assistance if the funding agency chooses) under the hundreds of discretionary grant programs. You can search by agency, category of activity to be funded, Catalog of Federal Domestic Assistance number, and other parameters. You also can sign up for email notification of newly posted opportunities based on parameters it provides. Grants.gov FIND will include a link to the full funding opportunity announcement. Depending on the agency, these still may be published in the Federal Register or be posted on a website.
http://www.usa.gov/Business/Nonprofit This website has information in three major categories; – Grants, Loans, and Other Assistance – Management and Operations – Tax information
Sources of Funding External - Grants http://www.foundation-grants.com/ This is a subscription service website for $39.99 that gives tips on applying for grants and searching for grants. You can search by keyword, Zip Code, State, Subject or Donor. This site also provides phone based technical support with the subscription.
http://www.grantgopher.com/our_services.aspx A subscription service that costs $50.00 per year and allows you to set up grant search criteria including deadline dates. You receive email updates on grants meeting your Requirements.
http://www.fundsnetservices.com/ A website with an abundance of information about grants and information and links to other websites that provide information about grants.
Sources of Funding External – NISH Loans Resource Resource Maximum $ Unsecured LoanTerms Pay Back
Maximum $
Pay Back Terms
Up to 3 years $50,000** up to $100,000 or 15 percent of projects annual PL value
Equipment Loan
$100,000 (cost of Up to 5 years project equipment)
Working Capital Short-Term
$200,000
6 months
Strategic Growth Loan
$500,000
Up to 5 years
Capital Equipment Lease
$500,000
Up to 5 years
Capacity Building Lease
$500,000
Up to 5 years (PL add within 2 years)
Sources of Funding External – NISH Grants Resource
Maximum $
Pay Back Terms
Management Assistance Grant
$22,000
N/A
Professional Development Grant
$11,500
N/A
AbilityOne CRP Worker Support $500 per potential Grant worker  (Disability Documentation and Security Clearances)
N/A
Quality Work Environment (QWE) Resource Fund
N/A
$10,000 per CRP per year
Applications: www.nish.org Click on tab: For Nonprofits Click on link: Financial Assistance
Lorretta Stevens lstevens@nish.org 571-226-4501
Sources of Funding Internal • • • • • • • •
Income from Current Operations or Contracts Investment Income Endowments Fund Raisers/Donors Lines of Credit from Bank Bank Loans Sale of Assets Current Cash Flow Some of these sources of funding will be covered by our two presenters as a part of their presentations.
How Do We Get There?
Total Facilities Maintenance Does it make sense for you? Ace Burt, President and CEO Enterprise Professional Services, Inc.
Step 1: Board Support • Will your Board support “new, higher functioning” lines of business • Will your Board support cash intensive lines of business? • What affect will it have on the remainder of the organizations mission? • What controls will be in place to ensure the current mission elements do not suffer? • What should the be CEO’s level of authority to commit the organization?
Step 2: Business Plan • Over what period of time do you want to enter this business? • At what level can/do you want to start? • Do your cash flow projections support the costs? • Are your prepared to make the “up front” investments to enter this line of business? • Do the jobs created warrant the risk and cost to the organization? • Will your current infrastructure support an additional line of business? • Have you done a gap analysis on infrastructure to identify any areas that will likely require increased resources?
Step 3: Finance • What is your current financial status and how much can you afford to invest? • Is it enough? • What are your current banking credit line terms? • Do you have an equipment credit line at the Bank? • What is the likelihood of getting an increase in your credit lines if required? • By who or how will the new bank notes be signed? • Will the bank support this expansion? • Do you have a plan to present to the bank?
Personnel • Do you have the management in place with the proper skill sets to grow into this line of business? • Do you have the ability to measure output and quality in this new line of business? • Do you have a staffing plan in place to identify the individuals you will need to enter this line of business? • Do you have a recruiting plan to find these individuals? • Are your prepared to pay these individuals what it will cost to hire them?
Considerations: • Develop subcontractor relations for specialty items • Rule of thumb: If we cannot cost effectively do it ourselves consider subcontracting. • Give small business preference • Examples: – – – – –
Boiler certifications Elevator maintenance and certifications Fire alarm maintenance and inspections Chiller annual stop inspections Generator stop inspections
Decision Point
• Can we do this as an organization? • How many jobs can we create and at what cost? • Why we should do this • Why we should not do this? • Does it make sense to do this? • Yes • No
We Are There. Now What?
First Sergeant Barracks Program Realities of Funding, Budgets, and Market Pricing in Sustaining a New Opportunity Roy Hung, Vice President of Operations Goodwill Industries of Hawaii, Inc.
Success Matrix in Contracts Management • Progressive Agency Culture o
Capacity building through training and certifications.
o
Strong Management Team supported by • • • • •
Fiscal responsibility Embrace value and quality in services provided Accountability of performance Candid / Positive Communication An agency culture of “success”
Success Matrix for Contract Management • Customer Relations o
Partnering posture with customer.
o
Open and Candid Communication even in difficult situations.
o
Be solution driven to meet customers requirements.
Success Matrix for Contract Management • Review Project Viability o o o
Financial review / evaluation Mission review / evaluation Evaluation of long term desired outcome for project.
First Sergeants Barrack Program • Provide 24/7 barracks management for the single soldiers housing at U.S. Army Garrison Hawaii bases serving 5 brigades with over 6,000 rooms. • Initial services included: o o o o o
24/7 Barracks management Record retention / Utilization Reporting Building Maintenance / Service Call tracking Janitorial / Grounds Deployment / Redeployment Surge Coverage
FSBP Program Development • First FSBP program initiated: o
Total operating plan developed for the Army. –
Communications plan to initiate services.
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Standard Operating Procedures developed.
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Data tracking system to account for all services performed.
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Key control / security procedures.
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Deployment / redeployment surges
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Marketing / Branding of Program; including signing, stationary, uniforms, and customer satisfaction surveys.
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Quality Control Matrix and monitoring system.
Funding, Budgets, and Customer Needs • Reality of current economic conditions dictate a strong commitment to continue program in light of: o Reduction in scope of services as a result of funding cuts and focus of funding in support of requirements on the front line. o Resolve issues associated with reduction in scope of services: –
Staff reduction
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Re-evaluating work requirements and propose staffing models.
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Support of partnering with the customer to position new service levels.
o Evaluation of Financial and Mission consequences of project outcome.
Funding, Budgets, and Customer Needs • Agency Commitment to stay the course on FSBP o
Positive Outcomes –
Established rapport and relationship.
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Posturing for future work as a known “partner”.
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Continue to build capacity and expansion of mission.
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Promote Ability One as vendor of choice.
Questions for the Panel
Session Evaluation Information
SESSION TITLE: Funding SESSION CODE: BD-T900