Maximizing Funding Streams
To maximize the available dollars, early childhood administrators blend and braid funding. These strategies also used to meet match requirements to draw down additional dollars.
Blending is “funds from two or more separate funding sources are wrapped together within one unified set of program services to children.” For example, in North Carolina, some local Smart Start funds are blended with federal or private funds to support Nurse Family Partnerships.
Braiding is “funds from two or more funding sources are coordinated to support the total cost of services to individual children, but revenues are allocated and expenditures tracked by categorical funding source.” Braiding requires a higher level of accounting precision with cost allocation methods employed and the ability to track revenues and expenses by individual funding source. For example, in North Carolina, Early Head Start and Child Care Partnerships are an example of braiding funds (often with subsidy funds).
Some federal programs require that the state also invest funds.
Maintenance of Effort
Maintenance of Effort (MOE) provisions require that the state does not reduce its investment in a program from year-to-year. MOE funds for federal programs require grantees to demonstrate that the state will maintain the level of non-federal funding for a program in effect prior to the federal grant award. For example, TANF maintenance of effort has included around $38 million in annual state appropriations for subsidized child care.
Matching funds are required by some programs in order to draw down federal funds, which is not related to past funding levels like MOE.