Field Notes: Talking About Tiers

written by Norm Suchar
December 12, 2012

Earlier this week, I participated in a webinar with our friends at the United States Interagency Council on Homelessness (USICH) and Joyce Probst MacAlpine from Dayton/Montgomery County, Ohio about thinking strategically about the NOFA for the the Continuum of Care (CoC) Program. The webinar should be posted on USICH’s website in the next few days. In the meantime, it’s worth reiterating and expanding on a few points about the tiering process and how to get the most out of it.

Across the board cuts are probably a bad strategy.
Many CoCs are struggling with how to prioritize renewals, and are considering an across the board cut approach, but that could hurt your CoC. Let’s take a simple hypothetical example of a CoC that has an annual renewal demand of $1 million, which consists of 10 renewal projects that are each $100,000. The across the board cuts approach would be to cut each project’s renewal by 3.5 percent. That CoC would put all of their renewals in Tier 1 at $96,500 each, and they would likely be funded. The overall amount the CoC receives would be approximately $965,000. There would be little likelihood of getting any more funding because the CoC would have no renewals in Tier 2.

Now let’s assume that CoC instead placed the nine best performing renewals in Tier 1 in their entirety ($900,000) and reallocated $65,000 of the funding from the lowest performing renewal project and placed the reallocation in Tier 1, leaving $35,000 for that lower performing project and placing it in Tier 2. That CoC would likely get the same $965,000 for their Tier 1 projects, and they would have a reasonable chance of getting the additional $35,000 for the Tier 2 renewal.

Reallocating projects and placing them in Tier 1 is a good strategy.
One of the important features to understand about this NOFA is that reallocation projects that are placed in Tier 1 are as safe as renewal projects placed in Tier 1. That is, if the project crosses threshold requirements, it will get funded. In addition to the safety of the reallocation strategy, the NOFA describes additional points that CoCs can receive through reallocation. For example, points will be awarded for CoCs that “specifically describe how the length of time that individuals and families remain homeless will be reduced,” and for CoCs that “increase the number of permanent housing beds specifically for chronic homeless individuals and families in the jurisdiction.” A reallocation project can help with both of these criteria. One thing that is much less certain is the fate of reallocated projects in Tier 2. Nobody knows how much funding will be available for Tier 2 projects, however, there is a good chance that there will only be enough for some of the Tier 2 renewals, which would mean that Tier 2 new or reallocation projects would not get funded.

The best strategy for the long run is to “put your best team on the field.
Sports analogies may be overused, but this one fits. When deciding which programs to place in Tier 1, CoCs should prioritize the ones that will give them the best outcomes on HEARTH Act measures, including reducing homelessness the most, reducing lengths of homeless episodes, reducing returns to homelessness, and increasing income and employment.

This NOFA is a marked change from previous NOFAs because it places much more emphasis on performance. I did a rough calculation of how many points are performance related. Of the 130 points available, 91 are related to performance—26 points for collecting data related to performance, 22 points for the actual outcomes achieved, and 43 points for strategies that improving performance. That’s a lot of points, and future CoC NOFAs will likely continue or expand this performance focus.

Underscoring all these strategies is the need for an objective process for determining which projects contribute most to performance. There are many programs that are viewed in their communities as good performers that really aren’t. The opposite is true as well. I have spoken with many providers who ironically don’t think very highly of their own programs, even when their CoC’s HMIS data show that they are performing very well.

If you have additional tips, comments, or questions, please send them our way.