GAO Report on CDBG and HOME Funds Lacks Input from Nonprofits

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May 15, 2012; Source: Government Accountability Office

Boy were we excited and then crushed by the content of this Government Accountability Office (GAO) report on promising and best practices in the use of Community Development Block Grant (CDBG) and HOME funds, two Department of Housing and Urban Development (HUD) programs that are mainstays of nonprofit community developers. The intention of the report was to examine how HUD and its state and local government grantees are devising and using performance metrics on programs that are essentially multi-purpose block grants (the CDBG program, for example, allows funds to be spent on 26 eligible activities).

Citing the Office’s previous work on HOME and CDBG outcomes, in a message that might well be read by foundations that think that small grants on complex issues are easily subject to quantitative performance metrics, the GAO authors wrote, “Our previous work has also identified the difficulties of evaluating the impact of block grant programs that do not represent a uniform package of activities or desired outcomes across the country, as well as the common problem of attributing differences in communities’ outcomes to the effect of a program in the absence of controls for other explanations.”

Nonetheless, in looking for best practices in performance metrics among the 1,137 entitlement jurisdictions (plus states and Puerto Rico) that administered $2.9 billion of the FY2012 $3.4 billion in CDBG funds, as well as the 590 localities (plus states and Puerto Rico) that administered FY2012’s $1 billion in HOME funds, one might have expected a number of the best practices to be rooted in the experience of the nonprofit entities that routinely carry out much of the community revitalization-focused portions of the CDBG and HOME program agenda.

That didn’t happen. Despite the unending foundation focus on outcome measures and performance metrics, with nonprofits contributing to the design and implementation of such strategies, there was no evidence of the nonprofit sector’s learning curve contributing to the GAO’s collection of best practices. In fact, other than appearing twice as eligible recipients of CDBG and HOME funds, nonprofits weren’t in evidence at all.

The GAO cited HUD’s problems with CDBG and HOME performance measurement: “According to HUD officials and others, one challenge associated with creating outcome-oriented performance measures that can be uniformly applied to all CDBG and HOME activities is grantees’ flexibility to design and implement strategies tailored to meet local needs and priorities. Another challenge for CDBG is grantees’ ability to undertake a broad range of activities. HUD officials told us that the diversity of these activities makes gathering, combining, and presenting robust and consistent performance information difficult, leading to challenges demonstrating the overall outcomes of these efforts.”

That is exactly the arena in which nonprofits can help localities, states, and the federal bureaucracy with the design of meaningful outcome measures and performance metrics strategies. Citing a 2005 study of five communities’ use of HOME and CDBG funds, the GAO authors listed ten elements to “useful practices” in community development performance assessment.  One of the ten was to “involve key partners.” The GAO might have involved key nonprofit partners in the local implementation of HOME and CDBG to learn what nonprofits are doing to generate meaningful performance measures, track performance, and engage their communities in the interpretation of the findings so that programs are improved in the future.—Rick Cohen