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How to braid funding streams
Mastering the difference between supplanting and supplementing is crucial for managing grant funds and staying compliant. These terms shape how you should use grant money and can make or break your project. Want to stretch your funding further? Learn the art of braiding funding streams to boost sustainability and long-term success.
What is supplanting
What is Supplanting?
Supplanting occurs when grant funds are used to replace or take the place of other funds that were already designated for a specific purpose. Essentially, supplanting means using grant money to cover expenses that should be funded by your organization’s regular budget or another pre-existing source of funding. This is typically not allowed by most funders and can lead to penalties, loss of funding, or even legal consequences.
Example of Supplanting
Imagine a school district receives grant funding to hire additional teachers. If the district uses that grant money to replace funding already allocated for teacher salaries (instead of adding new staff), that would be considered supplanting.
What is Supplementing?
Supplementing, on the other hand, means using grant funds to enhance or add to existing programs, rather than replacing existing funds. It involves using the grant to expand the reach, capacity, or quality of a program that your organization already supports.
Example of Supplementing
Using grant funds to hire additional teachers for new after-school programs, while still maintaining the existing teacher salaries from the organization’s regular budget, is an example of supplementing.
Funders generally encourage supplementing, as it shows that your organization is committed to the project and is using the grant money to enhance or expand the program, not just shift resources around.
How to Braid funding streams:
Now that we’ve covered supplanting vs. supplementing, let’s look at how you can strategically braid funding streams to maximize the sustainability of your grant-funded programs.
Braided funding refers to using multiple sources of funding—grants, donations, program income, and in-kind contributions—to support different components of a program. Braiding allows you to create a diverse and stable funding base without violating grant restrictions on supplanting.
Steps to Braiding Funding Streams:
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- Identify Multiple Funding Sources: Seek out diverse funding sources, including federal, state, and local grants, private foundations, corporate sponsors, and even earned income. Each source may have its own requirements and restrictions, so it’s crucial to map out what each funder will support.
- Align Funding with Specific Program Components: Once you’ve secured multiple funding streams, assign each to a different aspect of the program. For instance, federal funds may cover staffing, private foundations could support program materials, and in-kind donations could provide equipment or volunteer hours.
- Ensure No Supplanting Occurs: Be sure that each funding source is supplementing existing funds, not replacing them. Document how the grant or funds will enhance or expand your project, showing that you’re adding value and not shifting existing resources.
- Track and Report Each Funding Source Separately: Since braided funding involves multiple sources, it’s important to track each funding stream carefully. Keep clear records of how each source is used, and ensure your reporting to funders reflects this distinction. Transparent financial management is critical to maintaining trust and compliance with each funder.
Benefits of Braided Funding Streams
- Increased Sustainability: By braiding funding streams, your organization becomes less reliant on a single source of income, reducing the risk of losing program support if one funder pulls out.
- Maximizing Resources: Braiding allows you to allocate specific funds to their most appropriate uses, ensuring that each dollar is spent as efficiently as possible.
- Enhanced Program Impact: By supplementing existing resources and expanding program components, braided funding can help you reach more people, improve outcomes, and demonstrate greater impact to funders.
Wrapping it up
In grant management, understanding the difference between supplanting and supplementing is crucial for ensuring proper use of funds and maintaining compliance with grant requirements. Braiding funding streams allows you to build a stronger, more sustainable program by diversifying income sources and making strategic use of each funder’s support.
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At ItsAllAboutGrants.com, we’re here to help you navigate these concepts and more. Stay tuned for next week’s post on braided funding strategies, and be sure to check out our November classes for in-depth training on grant writing and program management. By learning how to supplement and braid funding streams, you can ensure your program’s long-term success!