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When funding is blended, it goes into the “pot” and when it is pulled back out to pay for an expense, there is no means for the fiscal manager to report which funding stream paid for exactly which expense.
Blending funding is politically challenging. Some funding streams cannot be blended. Other funding streams will require the funder to allow an exception to how the reporting normally functions. Instead of usual reporting, funders can opt to accept reports on services and outcomes across the population being served rather than exactly which children, youth, and families received services with their dollars. To blend your funding, you will need to work closely with your funders and ensure you can meet their reporting requirements.
Though it is politically challenging, once your funders are on board, blended funding is less challenging to implement than braided funding. There is significantly less workload, as the tracking and accountability happens across all funding streams. Rather than reporting to funders on their funding stream alone, reporting is done on how the collective funds are used. Blended funding can allow you to pay for services that may not be allowable with more categorical funding approaches. However, for many funders, the flexibility associated with blending makes it seem too risky as it often looks like supplanting, and they end up with less detailed information about how each of their dollars have been spent. For this reason, many funders are only willing to only contribute small amounts, if any, to a blended model.