Blending & Braiding Funding Coordinating Funding to Implement Your Chronic Disease State Plan

Blending & Braiding Funding Coordinating Funding to Implement Your Chronic Disease State Plan January 2013 Spark Policy Institute partners with communities, policymakers, foundations, and other leaders to find and implement solutions to complex policy problems. The Coordinated Chronic Disease Series Coordinating chronic disease programs is a complex task, full of opportunities to achieve meaningful change and barriers to sustaining that change. This series includes five briefs with concrete strategies and tips: Brief 1: Strategic Learning Brief 2: Blending & Braiding Funding Brief 3: Moving from Partner Input to Collective Impact Brief 4: Partnering Public Health with Healthcare Systems Brief 6: Organizational Change in the Public Sector The briefs are available at: www.sparkpolicy.com/cd.htm For more information about how to use blending and braiding to support your coordinated chronic disease efforts, please contact us at: 303-455-1740, ext. 115 or info@sparkpolicy.com. ALIGNING YOUR BUDGET WITH YOUR CHRONIC DISEASE STATE PLAN Has your state developed a chronic disease state plan? If the answer is yes, the next step is to create a fiscal coordination model to support that plan. Developing, monitoring, and expending funds for chronic disease prevention and management from categorical budgets in isolation of each other leads to fiscal inefficiencies, misalignment of funding with key priorities, and duplication of services. A fiscal coordination model can help you overcome all of these challenges. A fiscal coordination model provides a comprehensive picture of resources available for chronic disease prevention and management in a state. It shows which funding streams can be used for which purposes at a detailed level based on the regulations associated with each funding source. It shows the current status of grants, allocation of personnel, staff vacancies, operating, travel and contractual line items. This coordinated budget is used to review all revenues and expenditures and to align them to support strategies and activities in your chronic disease state plan. In addition, it projects balances at the end of the fiscal year and allows you to strategically use unexpended funds to support shared priorities in the plan, including coordinated strategies in the four domain areas and infrastructure needs. Unfortunately, there can be many challenges to developing a fiscal coordination model in a public agency. Funding is often allocated in a categorical manner which encourages programs to create, monitor, and spend their budgets in isolation. There are also numerous and sometimes conflicting policies and procedures which discourage coordinated budgeting. Program managers have varying levels of skills and expertise with budgeting and may be reluctant to allow funds to go to supporting coordinated strategies. And there can be delays in approval processes from state budget offices and from the federal grants and procurement offices. This is where blending and braiding comes in. A fiscal coordination model operationalizes one or both of these concepts, depending on the flexibility of the funding streams, to align funding with your state plan. In-depth tools and guides needed to develop a blended and/or braided funding strategy and a fully articulated fiscal coordination model can be found at http://sparkpolicy.com/fiscalsolutions.htm. Spark Policy Institute www.sparkpolicy.com 1

DEFINING BLENDING Blending funding involves co-mingling the funds into one pot where managers can draw down program dollars, personnel expenses can be paid, or other program needs can be met. When funding is blended, it goes into the pot and when it is pulled back out to pay for an expense, there is no means for the fiscal manager to report which funding stream paid for exactly which expense. Blending funding is politically challenging. Some funding streams cannot be blended. Other funding streams will require the funder to allow an exception to how reporting normally functions. Instead of usual reporting, funders can opt to accept reports on activities and outcomes across the population being served. To blend your funding, you will need to work closely with your funders and ensure you can meet their reporting requirements. Though it is challenging politically, once your funders are on board, blended funding is easier to implement than braided funding. There is significantly less workload, as the tracking and accountability happens across all of the funding streams. Rather than reporting to funders on their funding stream alone, reporting is done on how the collective funds are used. Example of Blending Funding for a Chronic Disease Initiative: In a blended model, you are reporting to your funder the total expenses of your program, line item by line item, and reporting the eligibility of the populations served, which indicates what percentage of the program their funding stream can appropriately be used to cover. Imagine a state health department is funding its Tobacco Control Quitline to provide tobacco cessation counseling services but to also identify and refer callers with chronic diseases to chronic disease selfmanagement programs. Many tobacco users often have co-occurring risk factors and chronic diseases. This Quitline might be funded by three funding streams: Funding Stream A: Eligible population is adults age 18 and over who are tobacco users. Funding can be used for tobacco cessation services only. Funding Stream B: Eligible population is adults age 60 and over with one or more chronic conditions. Funding can be used for screening and referral to chronic disease self-management programs only. Funding Stream C: Eligible population is adults age 18 and over who are pre-diabetic. Funding can be used for early detection, screening and referral to diabetes prevention programs only. By the month s end, the Quitline documentation shows that 100% of the callers were eligible for Funding Stream A (as would be expected in a Quitline). Among all callers, 10% were also eligible for Funding Stream B and were referred to programs for chronic disease self-management. Among all callers, 30% were eligible for Funding Stream C and were referred to a diabetes prevention program. In a blended model, the program fiscal staff now have flexibility in how they bill for the Quitline expenses. They could choose to bill 60% of the total expenses for the month to Funding Stream A, 10% to Funding Stream B, and 30% to Funding Stream C. If Funding Stream C is running low, they may choose to bill more to Funding Stream A, limiting the spend-down to Funding Stream C. Alternatively, if they have been using Funding Stream A too quickly, they could choose to bill as much as is appropriate to the other Funding Streams (40% of the total). In this type of blended model, caller by caller documentation can demonstrate the costs were incurred serving an appropriate population for the Funding Stream. Spark Policy Institute www.sparkpolicy.com 2

DEFINING BRAIDING Braided funding involves multiple funding streams utilized to pay for strategies in your chronic disease state plan, with careful accounting of how every dollar from each funding stream is spent. The term braiding is used because multiple funding streams are initially separate, brought together to pay for more than any one funding stream can support, and then carefully pulled back apart to report to funders on how the money was spent. Braided funding is often the only option. Federal funding streams require careful tracking of staff time and expenses, to ensure that a federal funding stream only pays for those things directly associated with the intent of the funding. Consequently, when multiple funding streams are paying for a single program or a coordinated strategy, the system may need to be carefully designed to allow for sufficient reporting to ensure each funding stream is only paying for activities eligible under that funding stream. Braided funding requires significant effort to create the systems for tracking how funding is utilized. The design of a braided funding system that can respond to the needs of each state will require staff with the authority to decide which programs, services, or strategies will be paid for by which funding streams. Ideally, this decision happens after the chronic disease state plan is developed, so that the funding does not drive the initiatives being provided. Example of Braiding Funding for a Chronic Disease Initiative: PROGRAMMATIC BRAIDING In a braided model, you are reporting exact expenses to a funder, line item by line item, separate from the expenses you are reporting to another funder. Most non-profits are already doing braiding, but it is more accurately described as programmatic braiding, not fiscal Imagine braiding. a state Programmatic health department braiding is is funding when a you provider have multiple to train funding worksites streams, to implement each covering evidence-based particular populations worksite wellness and services. programs. The Typically funding is the largely Nutrition, used Physical to pay for Activity, staff time and and Obesity each Program staff person (NPAO) is responsible funds this for type keeping of initiative. a timesheet However, that worksite allows wellness them to programs allocate their often time provide to each or refer grant. employees For example, to tobacco a state cessation, tobacco control weight program management, that is and funded chronic with disease two funding self-management streams, federal programs. funding In and addition, state tobacco they may tax funding, also promote might require policy and that environmental your staff person changes track such time as spent tobacco with free providing campus policies, technical polices assistance encouraging to community-based walking, and organization healthy eating (Funding policies. Stream A) and separately track time spent monitoring a tobacco tax grant for the community-based organization (Funding Stream B). When an activity benefits both groups, such as training on While the overall training might be funded by NPAO, technical assistance provided to the worksite wellness policy and environmental change strategies, the staff person might allocate one hour to one grant and one hour programs after the training to develop tobacco cessation, weight management, and chronic disease selfmanagement components to the wellness program might be paid for by a different chronic disease program, to the other. This one is specifically programmatic interested braiding: in chronic the program disease staff self-management. make decisions Those on how worksites to allocate who funding want by to using get involved their own in time policy and change, effort including reporting. tobacco In contrast, free campuses, fiscal braiding policies would encouraging require walking, that program and healthy staff eating report policies, enough information might have on access their to activities additional for materials, fiscal staff to training, allocate and their technical hours, allowing assistance, flexibility paid for in by which yet funding a third streams chronic are disease used program. and how quickly each funding stream is spent down. It also allows greater flexibility in how funding is utilized, such as contracting out for a service that cannot be provided in house. In this type of model, each expense is specifically charged to the funding stream most interested in supporting The this term type braiding of programming. is used throughout By using this three brief. separate Unless programmatic funding streams, is in front each of paying braiding, for please specific assume services we are appropriate referring under to fiscal that braiding. funding stream, the worksite wellness program that NPAO is funding can be expanded to include additional technical assistance and materials by leveraging two other funding sources. Spark Policy Institute www.sparkpolicy.com 3

HOW TO BLEND AND BRAID Planning for a blended and/or braided model is not just a fiscal process. Rather, it s a process of identifying your needs and priorities in your chronic disease state plan, what your funding can support, and what outcomes you want to achieve. Research on successful funding coordination models suggest that you must begin with a clear vision of what you are trying to finance in your plan, engage in collaborative planning, understand your resources, create systems that maximize those resources, focus on outcomes, and collect data to provide feedback on the strategies and activities. In order to help you go through these steps, below is a five phase planning process. Accompanying the process are templates that can be accessed online at: http://sparkpolicy.com/fiscalguides.htm. Phase 1: Identify Your Vision and Your Partners It is easy to fall into the trap of designing chronic disease programs to match funding. This phase is intended to avoid that pitfall and instead focus from the beginning on what you are trying to accomplish in your chronic disease efforts. It is important to work closely with your funders throughout your planning process to ensure you won t accidently plan something that is not appropriate. This also increases the likelihood your funders will want to work with you to ensure your program is a success. Phase 2: Define Your Program Prior to developing your funding model, you must identify what you hope to accomplish by blending and braiding funding. Fiscal coordination strategies are only a means to an end, and to be successful, the end needs to be well defined. Regardless of the scope of your goals, you need to clearly define them and outline what you will be funding. In this phase, you are describing your funding needs in far more detail than a plan may include. For example, you may document the qualifications of the staff you envision implementing portions of your plan if you are aware that one or more of your funding sources require professional staff with specific qualifications. Phase 3: Explore Your Financing Options Regardless of whether you are designing a system or changing the financial practices associated with your existing chronic disease program, it is critical to take the time to analyze your financing options. From the previous phases, you should now have a clear understanding of what needs to be funded, which will guide your analysis of your funding streams. During this phase, you will analyze each of your funding streams against the specific things you plan to fund. By doing this, you will learn where there is flexibility an activity or expense that could be funded by multiple funding streams and where there are gaps. Although the process may sound complicated, it is actually very straight forward and benefits greatly from a fully-articulated program and plan. Phase 4: Develop Your Coordinated Financing Plan Phase 4 consists of developing seven key components that come together in one document, your Coordinated Financing Plan: 1. Program Budget 5. Financial Systems 2. Cost Allocation Plan 3. Front Door and Back Door Protocols 4. Tracking and Reporting 6. Contracting This document is your guide to implement the blended and/or braided model. 7. Quality Control and Staff Training Spark Policy Institute www.sparkpolicy.com 4

Phase 5: Implement, Track, and Improve The final stage of developing your blending and/or braiding process is to implement. Throughout the process of developing your plan, we have emphasized the importance of engaging your funders and your partners in the process. This remains true during implementation. Although the model is now designed, it will not be static. As your funding streams change or funding requirements change, you will need your stakeholders to help you modify your fiscal coordination plan and ensure you can continue to deliver and support the chronic disease priorities that you have identified as critical for your state. What is a Coordinated Financing Plan? A tool for talking with your funders so they can clearly understand the design of your blended and braided system. A tool to help your programmatic staff, your fiscal staff, and your funder understand how and why each decision is being made. A method for increasing the likelihood that every dollar of your funding is being used appropriately, including ensuring that blending and/or braiding multiple funding streams will not result in supplanting. WHAT DO YOU GAIN BY USING A COORDINATED FINANCING PLAN? The benefit of a coordinated financing plan is flexibility. When multiple funding streams can be used for a specific expense, it allows fiscal staff to be strategic, spending down each funding stream in the way that leaves the greatest flexibility across all funding streams. As the end of the fiscal year comes closer, the dollars left on the table will be those with the greatest flexibility, allowing for innovative programming or expansion of the most effective programming already underway. Instead of scrambling at years end to figure out how to spenddown unexpended dollars, your fiscal staff will have the tools they need to project, months in advance, not just what will be left, but how it can be used across all your priorities. Spark Policy Institute www.sparkpolicy.com 5