Local Governments Coordinate Funding for Nonprofits

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February 2, 2011; Source: Ann Arbor Chronicle | Last fall, we reported on the efforts of local and county governments in the Ann Arbor, Mich. area who were trying to devise a multi-jurisdiction program of coordinated funding for nonprofits. The funding participants are the city of Ann Arbor, Washtenaw County, the Washtenaw Urban County (a group representing 11 municipalities in Washtenaw County that administer Community Development Block Grant funds), and Washtenaw United Way. (The Ann Arbor Area Community Foundation is also in the picture to provide capacity-building grants to nonprofits needing help with internal operations.)

Together, these entities issued a request for interested nonprofits to send in their governance and financial documents – sort of an RFQ for potential nonprofit applicants. Of the 58 nonprofits that responded, 51 were deemed qualified to respond to an RFP for funding issued on Jan. 28. But how much money will be available? It appears to be less than the $5 million that these entities made available last year cumulatively to nonprofits.

The budgets for the city of Ann Arbor and the Urban County aren't yet finalized, and the county itself has to make $1 million in budget cuts. It also isn't clear how the four partners will make their funding decisions. The idea is to coordinate funding efforts focused on housing/homelessness, aging, school-aged youth, children from 0 to 6, "safety net" health, and food/hunger assistance, but the differences among the nonprofits make the funding decisions tough.

One of the funders said that the RFQ has helped the public agencies "get a sense of the health of local nonprofits." They have divided the nonprofits into three categories, the top tier groups that met all the conditions and are ready to move forward, a second tier of nonprofits that can apply only with specific conditions, and the lowest tier that didn't meet basic thresholds, such as not having had an audit for several years. The second tier, the largest of the three, might be directed to capacity building technical assistance from the United Way or the community foundation or perhaps linked up with a "parent agency."

Give the public agencies involved in this process credit for a couple of things – linking public and private funding, linking funding and technical assistance, and trying to get past the sometimes internecine competition among nonprofits for limited (and currently declining) public resources.—Rick Cohen