$1 Grant Award, Really?

March 15, 2013 | By Karen Norris | Post a Comment

With the current focus on sequestration and pending budget reductions, I am reminded of a prior fiscal crisis and the difficulties it created, particularly for continuation awards. The National Institutes of Health, one of the largest federal funding agencies, had awarded a biomedical scholars grant to an institution of higher education for $285,000 a year, up to five years, topping more than $1.4 million over the project period. Years 1-2 were implemented as planned. When the Year 3 award notice arrived, it came early and reflected $1 in continuation funding.

Eyes blinked, jaws dropped, and the award notice was passed around for all to see. Most had to read it aloud. A reduction was forewarned, 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 had to make reductions to all grants and 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. They amended the Year 2 budget. Activities were delayed and partial funds 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 nonconfrontational attitude and problem-solving with the federal program officer went a long way toward mutual goals and happy endings.

In the next few months as budget reductions begin to take effect under sequestration, 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?

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