Braided and Adaptive Funding
Well-established apprenticeship programs must find ways to cover a variety of operating costs to offer consistent and reliable access to training and employment opportunities (for apprentices) and talent (for employers). These costs include expenditures in the following areas:
- Program design and administration, including program staff wages and benefits; costs associated with fundraising, marketing, and outreach; and various startup and one-time expenses
- Related instruction, including costs related to the development and delivery of training and certification programs and materials, and expenses incurred in the licensing of training programs
- Structured on-the-job training, including the costs incurred in training mentors and documenting and reporting participants’ skill gains and training hours (this category does not include apprentices’ wages, which are paid by the participating employers)
- Equipment and supplies for apprentices, such as tools, computers, uniforms, and safety equipment
- Training-related supports for apprentices, such as tutoring, coaching, or other services
- Wraparound supports for apprentices, such as services for those who need help finding and paying for childcare and transportation, or emergency assistance
- Rent, technology, software subscriptions, labs, and office supplies
- Other non-personnel-related needs, such as insurance for the program or hosting organizations
These costs are typical for mature programs during periods of economic stability, and they are rarely supported by single programs or grants—even those aimed at building apprenticeship programs. And organizations developing new and emerging apprenticeship programs should anticipate additional expenses, such as the cost of the time staff spend cultivating or enhancing relationships with employers.
Moreover, even when the country isn’t during a pandemic, programs will often experience periods of instability. Challenges that are likely to arise include funding cuts resulting from a change in leadership, a key employer’s sudden decision to withdraw from the program, or a crisis within local educational institutions or communities.
Apprenticeship programs can be more challenging to finance than most other workforce programs because of their quality, duration, and systemic nature. They involve both work and learning, and they build professional skills leading to jobs and careers. They are at the intersection of education, the workforce, and business, and therefore require significant planning and coordination across all those sectors. As a result, even though they have the potential to be self-supporting once they are well established, apprenticeship programs are costly in the early years. This means that new programs face big challenges because they often must put a considerable amount of time, money, and other resources into getting an apprenticeship up and running and then struggle to sustain themselves long enough for costs to flatten.
Programs have employed several strategies, including the three listed below, to address those challenges and stabilize their short- and long-term funding arrangements. Click below to read more about these strategies and see how they look in action.
Strategies
-
1. Braid, Blend, or Align Funding
To support their operations, apprenticeship programs often collaborate with partners to leverage a mix of public, private, and philanthropic funding sources. The idea is to align the resources of different programs or agencies toward common ends, or blend or braid them within the same program or agency context. For example, school districts and community colleges can often access state-allocated student funding for apprentices enrolled in related academic training courses. Workforce agencies can support a variety of program costs if they support referred candidates, and community service organizations often have access to funding that supports targeted groups, such as opportunity youth.
Summary
Braiding, blending, and aligning funding are all ways to make the most of available resources so that no single budget must absorb the total cost of a program. Here’s a look at the way each model works.
- Braided funding. Under this model, individual programs or components of a program are each paid for with funds from a different source. For example, money made available through WIOA might pay for training, while a foundation grant pays for the tools and equipment needed for that training. Expenditures are allocated and reported by funding source.
- Blended funding. Under this model, funds from two or more sources are combined—or blended—to pay for a specific program or program component. For example, WIOA funds pay for 50 percent of the cost of training and money contributed by employers covers the other half. When blended, expenditures may be reported by individual fund source if required by the funder.
- Aligned funding. Under this model, two or more organizations collaborate to use funding or resources from multiple sources more efficiently in support of a common program, population, or initiative. For example, one organization uses WIOA funds to pay the staffing costs of an adult apprenticeship program, a foundation pays the staffing costs of a youth apprenticeship, and a college launches a pre-apprenticeship program. All these programs operate separately but complement one another as the organizations collaborate to boost apprenticeship capacity in the community. Each organization allocates and reports expenditures for its own funding source(s) separately.
Finding innovative ways to combine funds from multiple sources or coordinate funding from multiple sources can enable programs to work together to provide more services and create more opportunities than any single program could do alone.
Strategy in Action
United Way of Greater Atlanta
United Way of Greater Atlanta is a local affiliate of the United Way charitable network and a member of the Aspen Institute Opportunity Youth Forum. The organization's mission is to bring together people and resources to drive sustainable and equitable improvements in the well-being of children, families, and individuals in the Atlanta area. It manages a workforce development initiative called Atlanta CareerRise, which operates as a regional collaborative that brings funders together from across a 13-county region in support of a shared strategic vision of building a workforce that meets the needs of 21st century employers.
United Way and Atlanta CareerRise joined AEMF looking to expand Registered Apprenticeships for opportunity youth in sectors other than the trades, such as health care. For one such program, Anthem’s Healthcare Information Technology apprenticeship, United Way is harnessing the expertise, resources, and opportunity-youth-focused programming of its many partners.
Recognizing that opportunity youth often require preparation and support to succeed in a specialized field like health care, United Way program staff are working to braid and blend public funds and philanthropic funds to support the launch of apprenticeship initiatives that will prepare participants for youth apprenticeships, which lasts from three to five years. They also plan to use braided and blended funds to offer wraparound support services to participants in the youth apprenticeships. In addition to collaborating with traditional partners like educational institutions, youth services organizations, and workforce programs—all of which have access to resources that could be integrated into a coordinated funding scheme—United Way program staff are looking into the possibility of tapping federal Supplemental Nutrition Assistance Program (SNAP) funds, working with adult education programs, and other options.
- Braided funding. Under this model, individual programs or components of a program are each paid for with funds from a different source. For example, money made available through WIOA might pay for training, while a foundation grant pays for the tools and equipment needed for that training. Expenditures are allocated and reported by funding source.
-
2. Deploy Flexible Funding When Adapting to Change
Summary
While many operating costs for apprenticeships are predictable, program design and administration expenses can vary greatly from one month to the next. Fluctuations are especially likely when administrators are registering the apprenticeship, making program updates, and cultivating key partnerships. Costs can also increase when external circumstances affect the local economy. The COVID-19 pandemic, for example, upended entire industries that many AEMF grantees were working with, forcing programs to adapt in ways they had not anticipated. (See How Apprenticeship Programs for Opportunity Youth Stay Resilient Through the COVID-19 Recession for more on how grantees in the AEMF network responded to the pandemic.) As a result, many apprenticeship programs continually look for flexible funding streams that they can quickly deploy to help programs grow and adapt to change.
Aware that programs participating in the AEMF network were new either to apprenticeship or to apprenticeships designed specifically for opportunity youth, JFF and project partners established a small-scale incentive funding opportunity for grantees as part of JFF’s technical assistance model. Most grantees applied for and received these additional resources (“incentive funds”) and used them to advance their programs during periods of instability.
Strategy in Action
Workforce Development Council of Seattle-King County (Washington)
The Workforce Development Council of Seattle-King County (WDC) is a nonprofit, grantmaking organization dedicated to creating career pathways for adults and young people through demand-driven workforce initiative and training programs. It operates federal WIOA initiatives and other workforce programs and partners with business, labor, education, and community-based organizations to help build and maintain an inclusive and dynamic regional economy.
The WDC has a long-term partnership with the Aerospace Joint Apprenticeship Committee (AJAC), a nonprofit organization funded by the Washington state government to develop and implement apprenticeships for the state’s aerospace and advanced manufacturing industries. Ongoing state investments in apprenticeship through AJAC and other initiatives have enabled workforce boards like the WDC to develop strong partnerships with apprenticeship programs in their local areas. Through these partnerships, the WDC recognized that young people, including opportunity youth, were not accessing these opportunities as expected. The WDC joined the AEMF network in part to improve its capacity to help young adults connect to apprenticeship earlier in their lives and support them while they are participating in apprenticeships.
In 2020, the COVID-19 pandemic and the business closures and travel restrictions it caused put enormous strain on Washington’s aerospace industry, which was already experiencing a slowdown because Boeing, the state’s largest aerospace employer, had frozen production of the 737-800 Max aircraft. Boeing’s industry network sustains much of the state’s apprenticeship system. When employers expressed reluctance to hire apprentices and absorb the near-term training costs, the WDC applied for and received incentive funding available through JFF’s AEMF initiative, with plans to use the money to support significant programming updates and engage prospective employer partners across the manufacturing sector. Specifically, the WDC has committed to helping 30 AJAC-connected apprentices cover costs related to placement, mentorship, and curriculum development for online learning during their apprenticeship—costs typically borne by the employers. The WDC is hopeful that this additional incentive will encourage employers to take on new apprentices.
Guiding Questions
Have you comprehensively mapped all program costs?
- Have you included all instructional and educational materials costs, as well as all workplace training and equipment costs?
- Have you included administrative costs?
- Have you included the costs of all supplemental and supportive services?
- Have you included all expenses that aren’t related to staffing, including the costs of rent, infrastructure, and insurance?
Have you mapped the resource landscape?
- Have you engaged current and potential partner organizations who can pay for a portion of program costs?
- Are you monitoring for changes in the funding landscape?
- Are you establishing partnerships that could broaden the funding base (e.g., through new grants) for your program?