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What Can a $1 Grant Award Do, Really?

With the pending federal budget reductions and sequestration, I am reminded of a prior fiscal crisis and the difficulties it created, particularly for continuation awards. 

The National Institutes of Health (NIH), one of the largest federal funding agencies, had awarded a biomedical research and internship grant to an institution of higher education for $285,000 a year, up to five years, topping more than $1.4 million over the full project period. Years 1-2 were awarded and implemented as planned. When the Year 3 award notice arrived, it came early and reflected $1 in continuation funding.

It took three of us to read the award notice, which was then shared with others in the office. Most had to read it aloud. The federal agency had previously warned there may be a reduction in Year 3, but really? Were zeroes missing? Were they kidding? What could NIH possibly expect for $1? It had to be a mistake. This deserved a conversation with the program officer rather than an email inquiry.

The award amount was so ridiculous and so obviously wrong, it was easy to be polite on the telephone, even a little jovial. But it wasn't a mistake. The NIH program officer explained they lost much of their appropriation and had to make significant reductions to all grants. Some programs lost funding completely. Fortunately, those first light-hearted moments on the phone set the tone for the remainder of the conversation. Better understanding and brainstorming soon evolved.

The dollar award turned out to be a brilliant move on the part of NIH. What can a dollar do? The dollar bought time, a year's worth of time. NIH liked the project. The dollar kept the award alive and on the books for the fiscal year in hopes that the next fiscal year would be better.

The dollar saved the project. Project managers amended the Year 2 budget with the approval of NIH. Activities were delayed and partial funds from Year 2 were carried over to support Year 3. They survived the next twelve months. With good planning and good reporting, NIH was pleased. The next fiscal year was better. Year 4 received a "supplemental award" of $124,000. Not as hoped, but workable. By Year 5, the full $285,000 came through and then NIH granted a whole new award for the next cycle, up to another five years.
While all budget reductions may not work out as well, it is worth noting that maintaining a non-confrontational attitude and engaging in problem-solving with the federal program officer went a long way toward mutual goals and happy endings.

In the next few months as federal budget negotiations and anticipated reductions begin to take effect, work with resolve to stay alive and on the books, despite possible loss of funds. You never know what's around the corner.
Have you ever had to deal with a budget reduction? How did you handle it?
Karen Norris is nationally recognized in the grants community as a training consultant and Subject Matter Expert (SME) for k4rnoco - a K4ren Norris Company in Gaithersburg, MD, and has experience in grants and contracts for more than 20 years, previously as a grants administrator for educational institutions, as an author and managing editor for national grants publications, as an invited presenter at national conferences, and on the Board of Directors of professional associations.



By: Teri Ann Pailen
On: 02/13/2018 15:29:56
I'm currently a grants specialist at NIH and awards are usually reduced due to reduced agency budgets and continuing resolutions. I want to add and express the importance of reading the Terms and Conditions of the award notice (Section IV on NIH's Notice of Awards). The Terms and Conditions detail exactly what is happening with the award.
By: Susan Caruso Green
On: 02/13/2018 15:30:51
A fascinating story and a reminder to always keep cool. I am afraid many of us are going to need to heed this advice going forward.
By: Marsha
On: 02/13/2018 15:54:57
Great article. It reminded me of how difficult fundraising was in 2008 and 2009, following the last market 'correction'. We left no stone unturned in order to reach our goals. Good reminder that 'every penny counts.'
By: Sharon Skinner
On: 02/13/2018 16:16:19
Great article, Karen. Thanks for sharing your experience.
By: Arthur Davis
On: 02/13/2018 16:30:15
Great post. Thank you!
By: Jennifer Broden
On: 02/15/2018 14:56:48
Thank you! Our agency is about 50% reliant on state and federal funding. While we do have resources to hold us should those sources be depleated; there would definitely be a strain long-term. It's good to hear your grant administrator was able to help you work through the issue.
By: Karen Norris
On: 02/21/2018 18:03:35
Thanks to all for your comments.

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