Legal Services Corporation:  The Legal Services Corporation has long been a target of criticism by conservatives who disliked LSC’s aggressive representation of poor people.  This has been reflected in amendments dating from the mid-1990s that restricted the ability of LSC affiliates to use federal funds for class action litigation.  In this round, President Obama requested $435 million for the Corporation, much above the $390 million it got in FY2009.  The House Appropriations Committee, however, did the President one better by adding another $5 million to its budget.  The Senate apparently isn’t thinking quite as generously as the House, but the Senate Appropriations Committee is reportedly considering legislation that would drop the various “poison pill” restrictions on the operations of LSC and its 137 affiliates, including not only the class action prohibition, but the requirement (enacted in 1996) that stops LSC from representing people who are not U.S. residents.

The increased funding for LSC is crucial in responding to the massive increase in demand for representation of poor people during this recession, but LSC also faces a challenge in cleaning up its oversight of some of its affiliates.  Over the years, reports from the Government Accounting Office (GAO) have detailed some pretty egregious LSC fiscal monitoring problems, including the astounding practice of the Philadelphia Legal Assistance Center giving interest free loans to employees without required paperwork on the part of the agency or the loan recipient.  This is the 35th anniversary of the Legal Services Corporation.  It is good that the House Appropriations Committee (and hopefully the Senate appropriators too) will give it the resources it needs, end the debilitating Clinton-era restrictions on its operations, and get it to clean up its managerial practices.

Justice earmarks:  Don’t think the Justice Department isn’t a venue for earmarks.  It certainly is, with a very long list of earmarked grants from the House Appropriations Committee to various municipalities and states, frequently for police work.  But nonprofit-linked initiatives are also in the earmark mix:

  • Community Foundation of Wyandotte County (Kansas City KS), $500,000 for the NeighborhoodsNOW Crime and Safety initiative
  • $200,000 for the Family Justice Center (Tampa FL)
  • $250,000 for the Community Safety Initiative of the Local Initiatives Support Corporation (LISC)
  • $100,000 for the Cleveland Avenue YMCA (Montgomery AL)
  • Sisters of Charity (Columbia SC), $265,000 for a program on alternatives to incarceration
  • Tahirih Justice Center (Falls Church VA), $500,000 for immigrant women and girls legal services
  • $300,000 to the United Way of Southeastern Michigan (Detroit) for an ex-offender re-entry program and $250,o00 for juvenile delinquency prevention (and additional United Way earmarks of $275,000 for a Youth Futures Commission in Pittsburgh and $350,000 in Fitchburg MA for a youth success initiative)
  • $2.4 million for 8 YWCAs, including rape crisis, at-risk youth, after-school, and domestic violence programs
  • mentoring programs provided by Big Brothers Big Sisters in Rhode Island, Illinois, and New Jersey
  • at-risk youth and gang prevention programs by Boys & Girls clubs in Tennessee, California, Massachusetts, South Dakota, New York, and South Carolina
  • $250,000 for the Boston Urban Youth Foundation’s Building Futures Educational Initiative
  • World Vision (Philippi WV), $250,000 for Appalachian at-risk youth programming

Tucked into the Appropriations Committee report after the Justice earmarks are a couple of other notable allocations from, of all places, NASA.  Going to nonprofits, for example, are $500,000 to the Foundation for Community Empowerment (Dallas TX) for an initiative to “transform” public education in Dallas through math, science, and technology and $1 million to CORE Philly (Philadelphia) for the CORE Philly Scholarships.

Community Development Financial Institutions:  CDFIs may be the nation’s recession-era success story, providing needed capital investment to community projects in urban and rural areas.  President Obama recognized their worth by proposing to more than double the CDFI budget in the Treasury Department budget from $107 million in FY 2009 to $243.6 million for FY2010.  The Appropriations Committee agreed down to the nickel, which is a good thing.  So far, CDFIs seem to be doing a very good job getting capital into community-based economic development projects.  The evidence in fact suggests that they are doing comparatively better than their conventional financing counterparts.  According to the national trade association for CDFIs, the Opportunity Finance Network, despite continuing declines in the overall condition of the U.S. economy, the portfolios of CDFIs improved between the last quarter of 2008 and the first quarter of 2009.  At the end of 2008, 11.1 percent of the lending portfolios of 106 CDFIs surveyed by OFN were considered “at risk”, but that proportion dropped to 9.2 percent as of the end of March 2009.  Despite half of CDFIs facing continuing capital constraints (without benefit of TARP subsidies and prior to receiving any stimulus funds), one-third reported that their access to capital had improved.  It seems just about assured that Senate appropriators will not disagree with their House counterparts.

Agency for International Development:  A number of nonprofits work on AID contracts, providing development assistance overseas, often quite challenging and at great risk to their staff and clients.  We don’t pay sufficient attention to the nonprofits in our midst that work on international issues, and we should.  Regarding the Appropriations Committee decisions, President Obama wanted more than the Committee was willing to give.  The President requested $1.439 billion, which would have been an increase of almost $400 million over the FY2009 total.  The Committee knocked $50 million off the President’s FY2010 request.  Was the Committee sending a message about changes it wants in AID’s operations?  Probably.

The Committee cited a few areas that probably impact nonprofit providers, particularly this one: “The Committee is concerned by USAID’s increasing reliance on the use of sole source contract awards and Indefinite Quantity Contracts (IQC) as it undermines competitive contracting processes, inhibits the participation of smaller organizations which bring niche expertise, and limits creative and innovative approaches to development. The Committee notes that lack of sufficient administrative resources is partly responsible for this loss of diversity in implementing organizations and expects that the additional resources provided for staffing will diminish the reliance on umbrella grants, sole source contracts, and IQCs.

That, plus a stated concern about USAID needing to ensure that small, minority-owned, and disadvantaged businesses get to participate in AID contracting opportunities, suggests that the Committee is animated by a feeling that bigger consulting firms are grabbing more than their appropriate lion’s share of AID work.  However, AID’s reliance on big contractors, umbrella grants, and Indefinite Quantity Contracts (IQCs) reflects what has happened to the agency’s own capacity in recent years.  Its in-house technical capacity to design and deliver programs has been eviscerated by staffing cuts over time, forcing it to rely on big nonprofit and for-profit contractors to do what USAID personnel should have been able to do–had they existed.  The Appropriations Committee appears to recognize this and has included in the budget an increase enabling the agency to hire 300 new foreign service officers.

USAID administers several program initiatives which, in other agencies, the Committee would have spliced in earmarks.  In AID’s case, the Committee encouraged the agency to use its competitive bidding process to reward the best applicants, but in most cases, strongly encouraged AID to consider specific providers, some listed here, a world of NGOs that most domestic nonprofits do not typically see or interact with:

  • Microfinance:  Esperanza
  • Property rights:  International Real Property Foundation
  • Financial markets assistance:  “the work of nonprofit organizations that specialize in this sector”
  • American schools and hospitals abroad:  EARTH University, Robert College of Istanbul, the American University of Beirut, Uganda Cancer Center, Hadassah University Medical Center, and Ashdod Medical Center
  • Basic education in Africa:  Communications in Development and Education, Digital Library for Disability Rights, the Three Hills Primary School, and the Torrijos-Carter Social Contract Training
  • Higher education:  Scholarships for Education and Economic Development and SIFE Africa Development Program
  • Biodiversity:  Greener Ethiopia and the St. Louis Zoo
  • Reconciliation programs:  Empower
    Peace Foundation, Non Violent Peaceforce, Peace Research Institute in the Middle East, the Raphael Lemkin Center, Cooperation Ireland, the Center for Civic Education in the United States, and Seeds of Peace
  • Victims of torture:  Center for Victims of Torture
  • Women’s leadership capacity: Women’s Campaign International
  • University programs: American University of Kosovo, Monmouth University, Ramapo College, the City of
    Hope University project, Daystar University, Flathead Valley Community College, University of San Diego’s Sustainable Development Practice Initiative, Morgan State University, Marquette University, University of Montana, and Virginia Military Institute

Are these really all-but-earmarks or perhaps very convincing pieces of advice from the Committee that USAID would best be advised to heed seriously or simply the honest ideas of Committee members who pay attention to international development issues for a living?  For our readers, it is another slice of the nonprofit world (other than the public universities in the listed recommended providers) that many nonprofits simply do not know.

The reality is that we operate in a global society.  Increasingly the work of many local community-based nonprofits reflects the importance of international events, witness how many groups getting funding from Justice, HUD, and HHS are address issues concerning veterans and their families returning from Iraq and Afghanistan or workers displaced as the U.S. automobile manufacturing industry takes on an increasingly Asian and European cast.  Few nonprofits may be USAID nongovernmental contractors, just like few are CDFIs or Legal Service affiliate organizations, but we all have to understand the overall environment we operate in, the issues we face domestically and internationally, and how we all have a stake in how they are addressed–and how they are budgeted by the White House and Congress.