The Secret Art of State and Federal Grant Procurement: Braiding Funding Sources

Written by GrantWorks, Inc. Updated on Apr. 21, 2023

Many sectors are irrevocably interlinked, including education, housing, community development, healthcare, and more. As a result, meaningful and sustained improvements to outcomes in any of these areas may require the collaborative effort of multiple sectors.

Federal fund braiding for local matches allows grant recipients to use funds from one federal program to meet the match requirements of another. Braiding funds has many benefits, including improving coordination between partners, expanding capacity in resource-short environments, and offering more creative or diverse service delivery options.

For many initiatives, it’s not enough to rely on a single major source of funding for new and innovative programs. Braiding funding makes projects stronger and more sustainable.

What are Braiding Funding Sources?

There are multiple ways for state and local governments to use public funding for specific objectives, including braiding, blending, and layering.

  • Braiding: This uses funds from multiple funding streams to support the total costs of a goal. Each individual funding stream has its own program, so they must be tracked separately. The shared costs of services are allocated to specific funding streams that ensures there’s no duplicate funding and that the appropriate program and administrative costs are charged.
  • Blending: This blends multiple funding streams to support the total cost of the project goal. Funding sources don’t have program-specific identities, so the costs do not need to be tracked separately or allocated separately. This is less of an administrative burden, but it can be difficult to account for the regulatory requirements.
  • Layering: This uses different funds to support the costs of a common goal. The foundational layers of funding are supplemented with funds for other related programs. The advantage of this approach is that one layer of funding can be eliminated without affecting the services covered by the other funding sources.

The Braiding Process

The process for braiding is based on the multiple braiding funding streams, which vary by their goals and context. It’s not a one-size-fits-all approach, but there are several key components of the braiding process that will be consistent across different programs.

Identify Funding Streams

Identifying the funding streams and the goals is fundamental to the braiding process. You can identify gaps in existing funding streams and those that are available. Fiscal mapping can be used to find the best strategy to take advantage of different funding opportunities.

Pinpoint Eligible Populations and Their Requirements

The braiding process relies on identifying the populations that are eligible for funding through the different funding streams. State and local governments should consider the differences in eligibility and reporting requirements for each funding stream.

Build Integrated Data Systems

Building integrated data streams between different programs is essential for sharing information to determine eligibility and adhere to reporting requirements. This data also offers a comprehensive view of the community’s needs.

Align Requirements of Funding Streams

States and localities can’t often modify or control funding stream requirements, but there are some flexible areas. Aligning the eligibility requirements of funding streams can help promote better outcomes and offers more flexibility for braiding multiple funding sources.

Define Shared Goals

Ongoing coordination is essential throughout the braiding process. It’s important for agencies, departments, or other parties to collaborate in the planning process and share goals to support the outcomes.

Build State or Local Programs

Opportunities to braid funds at the state or local level, rather than at the individual provider level, vastly simplifies the process. Having initiatives and systems at the state level allows you to use multiple funding sources more effectively.

Develop Governance Structures

States use governance structures to support ongoing collaboration between agencies and other key players in the state or local systems. This is important to ensure ongoing and sustainable collaboration and shared goals.

Support Braiding at the Provider Level

Program administrators and providers may need to combine funds from multiple sources to serve the community. Local governments can provide technical assistance, training, and other support to help in the use of braiding funding streams.

Grant Management with GrantWorks

The use of braiding provides increased access to programs, shared resources, and coordinated services that can support more robust initiatives. And the partnerships between programs keep initiatives sustainable when external funding sources are gone.

But braiding funds can be challenging, adding to administrative burden and a lack of flexibility that can inhibit successful outcomes. At GrantWorks, we’ve secured over $8 billion in funding and offer expert guidance to complete and submit grant applications. Contact us today to learn more!