Back in March, we published an introductory article about the Opioid Settlement. We promised to monitor these funds closely and continue to update you on opportunities as these funds become available. The funds from the settlements are intended to provide much-needed resources for the recovery ecosystem. Before you assume that your organization isn’t a part of that ecosystem, keep reading. This is a $50+ billion program that should be around for about 18 years.
Keeping up with which entities are receiving settlements and how the funds are being granted is proving to be extremely complex. Last Week Tonight with John Oliver aired a scathing expose on the topic a few months ago. We are focusing a lot of our resources on this effort and will continue to educate our community about this topic.
To start, we’d like to share a case study of the Tennessee Opioid Abatement Council’s inaugural grant competition. Tennessee was among the first states to implement an open, competitive grant program. We have followed this competition closely and suspect it will become a model other states may replicate.
While the distribution of funds has been generous, there appears to be a significant discrepancy between the council's initial promises, made in numerous public and town hall style meetings, and the actual outcomes. We have delved deeply into the results to provide a critical analysis that sheds light on these disparities. Even if you don’t anticipate competing for funds in Tennessee, this is worth reviewing since, again, we expect to see other states model their competitions on this one.
Overview of the Grant Competition
The Tennessee Opioid Abatement Council was established with a stated commitment to tackle the opioid crisis through strategic support to grassroots organizations directly serving affected communities. However, the data from the first year’s awards reveal a concentration of funding in larger, more established institutions such as universities and large health systems, which received more than half of the awards despite representing less than 35% of the total proposed projects.
Financial Distribution and Award Discrepancies
A close examination of the financial awards highlights a potentially troubling trend:
- The largest sums were allocated to the fewest recipients, predominantly large universities and large health systems, which received awards upwards of $23 million. While these entities scored big points for having a tremendous service capacity and elegant plans for disseminating their results (key factors in the scoring of the application design), practitioners with boots on the ground know that the breadth and depth of the services these entities currently provide produce limited impacts and the costly program designs proposed aren’t as likely to achieve meaningful improvements to the existing recovery ecosystem as those achieved by community-based organizations.
- Community-Based Organizations (CBOs), despite their critical role at the grassroots level, received smaller and fewer grants, which raises questions about the allocation priorities. These direct service providers which are often on the front lines providing peer support, recovery housing, recidivism prevention, and lifestyle transformation that sustains recovery, such as job skills, seemed underrepresented in the distribution of significant funding amounts.
Overall, the competition appears to have funded more theoretical, systemic change than direct services to individuals struggling with substance use disorder and recovery. While an academic approach to systemic change is needed, it feels a bit like putting the cart before the horse given the emergent needs of individuals in communities all across the state.
To illustrate this point, one large mental health system that serves about eight of Tennessee’s 95 counties, with a virtual monopoly in its service area and a long waiting list for mental health services throughout most of the region, only received funding for a youth prevention program. Given the needs of their existing clientele, this seems absurd.
Prior Experience, Organizational Longevity and Competitive Bias
Nearly all funded CBOs had prior major grant experience, and the vast majority have been operational for over a decade. While experience is invaluable, this trend suggests that newer, smaller organizations that might be innovating at the grassroots level were hamstrung.
Despite heavy messaging about investing these funds in direct services and innovative solutions aligned with best practices, at the end of the day, the application structure was heavily weighted to favor academia and large, established institutions. During the award process, the council was intentional in ensuring an equitable geographic distribution of funding and, theoretically, in distributing funding across small, medium and large organizations. However, the council’s definition of what constituted small, medium and large organizations was confounding.
The council defined small agencies as those with an annual operating budget of less than a million dollars per year. Medium agencies were defined as having annual operating budgets between one and twenty million dollars per year. And large was defined as having an annual operating budget over $20 million. We strongly believe these thresholds would have been far more appropriate at <$500,000, $500,000 to $10 million, and $10+ million, respectively.
Remember that mental health organization with a practical monopoly in almost 10% of the state? They were classified as a “medium” size agency. We do not believe that is accurate. Further, we believe that to do the most good, the council should have heavily weighted the distribution to medium size agencies (by our definition, not theirs). Organizations with revenues under half a million dollars would likely lack the administrative capacity to manage significant funding, while large organizations have the resources to effect change without substantial external funding and should be incentivized to implement self-funded, innovative demonstration projects prior to receiving settlement funds.
Being Competitive in this Landscape
Our main goal in studying this competition is to determine which types of organizations can and will be successful in competing for these funds and what those organizations can do to gain competitive advantage.
For future applicants, we have some key takeaways:
- Understand the Importance of Established Credibility: Building a solid track record and prior grant experience seems crucial under the current funding model. One strategy we strongly recommend is pursuing planning grants in advance of applying for Opioid Abatement funding. The Appalachian Regional Commission’s INSPIRE program is an excellent source for organizations in Appalachia (we have an excellent track record with this program).
- Advocate for Transparency and Inclusivity in Funding: There is a clear need for advocacy to ensure that funding reaches all levels of service providers, especially those working directly in affected communities. We strongly encourage participation in planning processes and being vocal about the funding priorities in public meetings and town hall opportunities.
Who Didn’t Apply and Should
In our deep dive into this competition, we not only looked at the organizations awarded. We also took a close look at the types of organizations that were underrepresented among applicants and noted some types of institutions that didn’t apply at all.
- Anti-Drug Coalitions On the whole, we found anti-drug coalitions to be highly successful in securing awards, if they applied. More should.
- Community Action Partnerships Very few community action partnerships applied and two out of three that did were successful. We strongly encourage this sector to apply.
- K-12 Public School Districts Considering the number of prevention awards received by youth service organizations, we were surprised that no public school districts applied.
- Community Colleges We were most disappointed to find that no community colleges applied in this competition. We have a lot of experience working with community colleges to develop and implement job skills programs that are vital to sobriety-sustaining lifestyles and peer support certification programs. Frankly, we were shocked at the total lack of community college applicants.
In addition to these, we also noted that courts, community health centers, and organizations serving unhoused individuals and families were underrepresented.
Tennessee’s Next Competition
Tennessee’s next funding cycle is scheduled to begin next week. Beginning on September 16, 2024, the TN OAC will release the Announcement of Funding and make the application available on their website. Applicants will have until September 30th to submit an intent to apply via email. Within the same month, the OAC will also provide various technical assistance materials to support applicants. Written questions from proposers regarding the funding announcement and application process are due by September 27, 2024, with the OAC scheduled to post responses to frequently asked questions by October 4, 2024.
The application submission portal will open on October 14, 2024. This portal will remain open until the October 28 deadline. Following the review and selection process, the OAC anticipates announcing the accepted proposals on July 1, 2025. Finally, the approved grant contracts are expected to be effective from January 1, 2026.
We Can Help
We have studied this competition in depth so we can provide strategic advice to our clients. It is our intention to focus heavily on securing these funds for organizations all over the country, as the various competitions open, for at least the next fifteen years. If you’d like to learn more about Opioid Settlement funds, contact us. If you are specifically interested in applying in Tennessee’s next round of competition, please email us at customerservice@kfanonprofit.com before September 30th.