Every Sector Has a Role to Play in Addressing the Nation's Home Affordability Challenges

Recently, companies like Google, Facebook, and Apple have made significant commitments to address the housing affordability crisis in the Bay Area and across the United States. While such commitments are a great start, much more needs to be done to ensure that all families in America can afford a decent place to live.

It is unacceptable in 2019 that one in six families pays half or more of their income on rent or their mortgage. For many, this means choosing between having a safe place to live or having enough money for food, transportation, health care, and other basic needs. At Habitat for Humanity, we believe a roof over one's head shouldn’t cost anywhere near half one's pay. We also believe it will take all of us working together to significantly impact the housing deficit in this country.

While there is no silver-bullet solution to the nation’s housing challenges, collaboration between the private, public, and social sectors are key to making affordable housing accessible to more families. And as nonpartisan players working to address housing challenges in their communities, nonprofit organizations have a critical role to play in advancing workable, bipartisan policy solutions that will have a lasting impact on the problem.

To better address these issues, Habitat recently launched Cost of Home, a national advocacy campaign that aims to increase home affordability for ten million people through policy and system changes at the local, state, and federal levels. More than two hundred and eighty local and statewide Habitat organizations across the country have already signed on to implement the campaign in their communities.

As part of the campaign, we have identified four things that must be done in order to achieve home affordability for American families: increase the preservation and supply of affordable housing; increase equitable access to credit; optimize land use for affordable housing; and develop communities of opportunity. In the past year, we've already seen some success at moving these ideals forward.

For example, last December the Minneapolis City Council passed Minneapolis 2040, a comprehensive plan that allows small-scale residential structures with up to three dwelling units to be built on individual lots in residential neighborhoods, abolishes parking minimums for all new construction, and allows higher-density multi-family housing to be built along transit corridors. The plan makes Minneapolis the first major U.S. city to end single-family only home zoning — and one of the first to take steps toward abolishing restrictive zoning that prevents minorities from moving into certain neighborhoods. Twin Cities Habitat for Humanity was a significant voice in advocating to eliminate single-family-only zoning regulations in Minneapolis.

Similarly, Austin Habitat for Humanity worked with a coalition of affordable housing and community development organizations to secure passage of Affordability Unlocked, a proposal designed to increase the supply of affordable housing in the city. Key elements of the proposal included zoning changes and eliminating development requirements related to parking and minimum lot size. In May, after hours of debate, the Austin city council voted unanimously to adopt the ordinance.

And in February, Oregon governor Kate Brown signed into law the first mandatory statewide renter protection legislation. The bill limits the scope of termination notices without stated cause, protecting families who are living paycheck to paycheck. Shannon Vilhauer, executive director of Habitat for Humanity of Oregon, which represents local Habitat groups across the state, testified in support of the legislation.

We're working with our state and local Habitat organizations to build on these advocacy successes by putting home affordability issues front and center for council members, mayors, and state representatives across the country. As a complement to our influence at the state and local levels, we are also expanding our advocacy engagement at the federal level, with a focus on a set of bold, high-impact housing policy solutions. The campaign's policy priorities will provide a platform that mobilizes housing advocates and elevates the issue of home affordability in the national conversation, with the goal of ensuring that every candidate running for office has a plan to increase home affordability in their communities and states.

Major financial commitments from some of the country's most generous enterprises and philanthropies serve as a reminder of the urgency of the problem and the need to address it. By continuing to work at all levels of government to advance policy solutions that will lead to systemic change, we can create an environment that will further our vision of making the cost of home something everyone can afford.

Jonathan T.M. Reckford is chief executive officer of Habitat for Humanity International, which he has led since 2005.

Fit to Fund: Who Should Pay to Raise Standards for Good Financial Grant Practice?

Funders have a right to expect that their nonprofit grantees have systems and structures in place to manage grants effectively and ethically. But does that right also imply that funders have a responsibility to invest in the grant management capabilities they expect from organizations they entrust with funds?

In the production of French cognac, nearly twenty million bottles, or 8 percent of the country’s annual production, is lost to evaporation after the distilled spirit has been put up in oak barrels; this is known, rather romantically, as "the Angel's Share."

A similar but far less romantic phenomenon occurs in the nonprofit sector. According to Caroline Fiennes, author of It Ain't What You Give, It's The Way That You Give It, roughly $125 million in the United Kingdom alone is "lost" by grant recipients in the production of reports required by funders and government agencies; much of that is spent on duplicate assessments as part of the submission of multiple grant proposals.

Rather than going to the angels, this $125 million could be seen as the "admin share," with both funders and their nonprofit grantees spending significant amounts of time and money on multiple due diligence assessments, diverting funds to needless administrative tasks that could be used to change lives for the better.

Most grant proposal forms use different criteria, leaving many would-be grant recipients unclear about what funders expect of them. This also means that many nonprofits end up spending hundreds of hours a year filling in different forms that ask for the same basic information in slightly different ways.

Nowhere is the problem more acute than when it comes to filling in forms designed to assess a nonprofit's grant management practices. In part, this is because funders are under increasing pressure from watchdog groups, the media, and taxpayers to demonstrate that the funds they award are being spent effectively and ethically.

In addition, different ideas about what constitutes good grant management practice have led to lower levels of trust in grant management capabilities across global funding supply chains. As a result of this breakdown, nonprofits find themselves having to jump through ever more complex and costly assessment hoops in order to reassure funders of their reliability.

The Global Grant Community (GGC) was established to address this broken model and reduce the "admin share" of funds being lost to paperwork. Its mission is to enable more money to flow to the people who need help by using standardization and the disruptive power of technology to reduce the cost, in time and dollars, currently entailed in connecting funders with potential nonprofit partners.

Our antidote to "admin share" is the world’s first international standard for Good Financial Grant Practice (ARS 1651:2018). For the first time ever, there is now a global standard for good grant management practice that CBOs, CSOs, NGOs, and higher educational and research institutions can adopt, bringing rigor and trust to even high-risk funding environments and creating a level playing field between state and philanthropic funders and their beneficiaries.

Streamlining and stripping out the cost of due diligence by standardizing and digitizing the due diligence process also means a greater comfort level for funders — and more money for organizations that are working to create greater impact for people across Africa and the world — a win for both funders and recipients.

The new standard was developed at the African Academy of Sciences in Nairobi, Kenya, with support from some of the world’s largest public- and private-sector funders, including UKAID, USAID, Wellcome, UK Research and Innovation, the UK Department of Health and Social Care, the IKEA Foundation, the European and Developing Countries Clinical Trials Partnership (EDCTP), the African Union, and the New Partnership for Africa's Development and Coordinating Agency (NEPAD).

Developed in partnership with the African Organization for Standardization (ARSO), the standard was piloted and road-tested by more than three hundred organizations around the globe and was formally adopted (ARS 1651:2018) by ARSO in June 2018. As such, it sets out more than two hundred and eighty clauses stipulating what major funders expect from their grantees with respect to grant management practice. The practices are organized into four broad organizational areas — financial management, human resources, procurement, and governance — and four tiers of compliance — bronze, silver, gold, and platinum (depending on the scale and complexity of funding and the size of the nonprofit, NGO, or research institution).

The GFGP standard is not meant to replace existing audit and assessment processes but instead provides a strong and consistent belt for a funder's braces. Because grant recipients are assessed against common standards of grant management practice, funders can have greater confidence that their funds will be spent effectively, responsibly, and free from corruption. Working with certified Global Grant Community organizations also reduces funders’ risk and the cost of audits and compliance, ensuring that more of their funds support government policy objectives, Sustainable Development Goals, and Grand Bargain targets.

At the same time, a global standard benefits grant recipients. Because the standard clearly sets out the grant management and risk mitigation procedures funders are looking for before awarding grants, nonprofits can use the standard as a tool to improve their grant management capabilities.

The journey for a nonprofit to world-class grant management practice begins with a simple GFGP Pre-Certification Assessment that measures its capacity to comply. Organizations can improve their funding prospects further by opting for an independent audit by a licensed GFGP Standard Certification Body and earning a Certificate of Compliance, which can be displayed as a quality mark on a searchable database used by funders, where it is seen by many funders. This "provide once – share with many" functionality reduces the time and money that grantmakers spend on finding and verifying reliable partners.

Critics of the standard may point out the irony of yet another new form that needs to be filled out. However, we believe that over time the GFGP standard will be the only form a nonprofit ever needs to complete. Still, there is a short-term cost for nonprofits, and while the costs are far lower than the price charged by external audit firms and other third-party verification bodies, they do represent a barrier for many organizations, which in turn limits the ability of those organizations to improve their grant management capabilities and attractiveness to funders.

That raises an interesting question about whether the world's biggest funders should subsidize the cost of completing a GFGP assessment for underresourced organizations. We say "yes." By making the cost of an assessment and certification an allowable grant expense, funders would be acting in their own self-interest while strengthening the ability of their nonprofit partners to spend the grant funds they receive responsibly and ethically. If you decide to give someone a car, the first thing you probably want to know is whether person has a driver’s license. The same principle applies here.

As well as making a GFGP assessment an allowable expense, we are calling on funders to provide small grants through a special fund to pay for assessments for the smallest CSOs as a way of ensuring that no organization is left behind. It's our belief that the GFGP standard will become an international standard on which all grant funding, and the way funders fund, is based. It is long overdue, and we look forward to the many positive changes its adoption will bring.

Michael Kilpatrick is senior advisor to the Global Grant Community at the African Academy of Sciences in Nairobi, Kenya.

When Less Is More: Cities Unlock the Potential of Micro-Philanthropy

In their 2017 book The New Localism, Bruce Katz and Jeremy Nowak make the case that we're at the beginning of a new era: one in which cities and counties must take the lead on new strategies to address pressing social and economic challenges.

But if they hope to be successful, city leaders cannot take on this burden alone: they need to unleash the collective power of their communities. The good news is that a growing number of cities are finding that supporting communities in small ways — for instance, with microgrants — can deliver outsized impact.

Consider the case of the Denver Foundation, which has kept its Strengthening Neighborhoods initiative going for nearly two decades. The initiative provides grants ranging from $100 to $5,000 to fund community-driven solutions that take advantage of the skills and resources already present in a community. Similarly, the Greater Tacoma Community Foundation's Spark Grants program relies on a grassroots leadership model to bring diverse groups together to strengthen local neighborhoods.

The power of small grants to drive change has not been lost on city leaders, many of whom are embracing the potential of micro-philanthropy — and pairing it with a citizen-led ecosystem that supports the effective implementation of those grants. In Newark, we've taken these lessons to heart and are eager to share some of what we've learned about how small grants can help lay a foundation for improved social and economic mobility.

First, cities need help in creating the infrastructure that will ensure success. In addition to providing cities with a $25,000 grant, the Love Your Block grant program — a program of Cities of Service, part of Bloomberg Philanthropies' American Cities Initiative — supports cities with two full-time AmeriCorps VISTA members who assist the mayor's office in the areas of capacity building, information sharing, and community engagement. At the point where the cities start to divvy up their Love Your Block grant into micro-grants, the VISTAs also assist community members with their grant applications. And it works. In two targeted neighborhoods in Newark, thirty-four residents submitted project proposals totaling $42,518 for community clean-ups, minor home repairs, and vacant lot activation.

Second, cities need to learn from others who are working to get individuals involved in similar ways. Cities of Service has created a blueprint for action and provides ongoing technical assistance that includes advice about troubleshooting challenges as well as tips on making connections with other cities working on similar initiatives (including using both formal and informal communications channels, from webinars and e-newsletters to Slack). In Newark, our Love Your Block grant was implemented by the city's Office of Sustainability, which works to make Newark a healthier, cleaner, and greener city — and which relied on resources provided by Cities of Service to ensure that implementation of the grant went smoothly.

Third, cities need to create opportunities for continued collaboration in order to reap the longer-term benefits of micro-philanthropy. When the Urban Institute recently studied the value of the Love Your Block program, it found that, in addition to revitalized neighborhoods, Love Your Block projects led to increases in both social cohesion (the level of connectedness individuals feel to their neighbors and surroundings) and social capital (as a result of relationships built with city leaders over the course of the project). That social capital then becomes a catalyst for even deeper work and collective action. Newark is taking collaboration a step further by committing public dollars to continue the Love Your Block program. To ensure that philanthropic resources are aligned with the priorities of city leadership and, ultimately, the city's residents, it is also one of the few state or municipal governments in the country to have created the position of philanthropic liaison, thanks to a unique public-private partnership between city government and the local funding community under the auspices of the Council of New Jersey Grantmakers.

Cities have a unique opportunity to drive big returns on investment from small grants. A citizen-led microgrant program allows for a more accurate identification of the challenges that people in the community want to see addressed. Engaging community members in this way can create long-tail benefits such as increased social cohesion and civic engagement that can be channeled into other community needs. When these three pieces — microgrants, technical assistance, and human connections — come together, the impact is greater than the sum of its parts.

With the right support networks in place, hyper-local microgrants can accelerate city leaders' efforts to not only meet the short-term needs of their communities but also strengthen the networks and relationships that drive long-term outcomes. The result? Stronger connections between citizens and municipal leaders — and stronger cities overall.

Ras J. Baraka is the mayor of Newark, New Jersey. Myung Lee is executive director of Cities of Service, a national nonprofit based in New York City.