N.Y. Lawmaker Proposes Lottery-Driven Nonprofit Grant Fund

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August 9, 2012; Source: Queens Chronicle

Remember how New York State legislators had access to pots of discretionary moneys called “member items” which they used—and sometimes abused—for grants to favored charities, particularly those controlled by their family members or their political associates? After enough member item scandals, the state legislature got rid of member items. It must put state legislators who tromp to Albany for the Assembly or the State Senate into a quandary: How do they deliver the goods for the groups in their home districts?

Democratic State Sen. Tony Avella has introduced legislation to give nonprofits a share of the funds from a new scratch-off lottery game. The funds for nonprofits would be deposited into a program called the Community Grant Fund. Avella’s bill has some points for it and against it:

On the plus side, Avella and his colleagues know that despite past member item abuses, the member items were important sources of revenue for a number of nonprofits, some of them good nonprofits (and not affiliated with legislators’ families or aides). More than a few groups actually depended on the member items for part of their general operating support, particularly advocacy groups that wouldn’t typically fit state government funding streams.

On the negative side, one can imagine the Community Grant Fund being divvied up into pieces that are essentially member items in all but name. What strictures would the Assembly and Senate tolerate when the elimination of member items deprived legislators of their access to unfettered grant cash? What important pieces of the state’s nonprofit funding agenda can’t be addressed by applicants going straight to state agencies, but can be addressed by having them go negotiate with politicians?

Flexible funding for a broad range of nonprofits is a good idea, but if access must happen through politicians rather than agency administrators, the structure sounds questionable.—Rick Cohen

  • Akosua Albritton

    It is understood that St. Senator Avella’s proposed scratch off lottery that would fuel Community Grant Funds is a means to support grassroot and nonprofit program objectives where Member Items had done so. It is clear Avella’s proposal is in response to Governor Cuomo’s cessation of State member items.

    The Member Items gave the nonprofit community a place to request funding on an annual basis, though of a smaller amount
    than the multi-year contracts, typical of state agency awards. Multi-year contracts closeout losers of the RFP process from agency funding for three to five years or even longer. Further, the award winners have years to develop relationships with agency employees. The sweetheart deals feared from Member Items exists with public agencies.

    The Member Items gave unincorporated grassroot groups a chance to get funding for such activities as community gardens, intergenerational programs, special community events, and other small scale civic projects. These awards were contingent on the grassroot groups having a fiscal conduit, usually a community-based nonprofit. Public agencies tend to enter into contracts with either higher education institutions, groups with 501-c-3 determinations, or established businesses. Grassroot groups are ineligible for public agency awards. For these reasons and more, the state legislature had to bring home the groceries to their districts.

    The State Senator’s proposal will need to go through the usual vetting that occurs in NYS Senate and Assembly committees as well as public hearings. The legislature is in recess now and is due to resume December 2012/January 2013. Questions that need answering is why did so many years go by where Member Items were awarded to political associates and family members without correction? Was it necessary to discontinue Member Items altogether if that was the issue?

    I concur that “Flexible funding for a broad range of nonprofits is a good idea.” However, transactions done by agency administrators and politicians require close monitoring. Agency administrators may have biases for or against eligible fund-seeking entities. All humans have flaws.