Nonprofit Newswire | Infrastructure Needed to Move Stimulus

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February 26, 2010; Associated Press | It’s great that the U.S. Department of Agriculture is taking steps toward fixing some of the nation’s problems with moving stimulus funding. In this case, if the report is correct, the Dept. of Ag. is making available $25 million in funding for 100 percent loan-to-value mortgages at interest rates as low as one percent along with down payment assistance for rural homebuyers in the Appalachian areas of Tennessee, West Virginia, Kentucky, and  Virginia. The money will run through the highly respected Federation of Appalachian Housing Enterprises in Berea, Kentucky which works with a network of 50 groups in the four-state region. The takeaways are both positive and not so positive. On the positive side, it’s clear that the USDA is trying to find ways of fast-tracking money to and through nonprofit developers, in part to counter criticisms that housing moneys are flowing very slowly through this administration, particularly its housing-oriented programs such as the Neighborhood Stabilization Program at HUD, the rural housing loans in Agriculture, and the weatherization funding. But the announcement still raises a question of organizational infrastructure. Much of the stimulus money, for example, went to groups in larger amounts than they had ever seen before, straining their abilities to absorb and process the funding. But there was little if any money available to help the groups expand their financial and administrative systems commensurate with the increased amounts of capital through the stimulus. For this announcement, USDA also announced that it was giving the Federation a grant of $75,000 as operating support for this $25 million initiative. That says it in a nutshell: the nation has yet to deal with the need to build the organizational strength of nonprofits so that they can handle and deliver on the resources that only nonprofits are positioned to use to help low-income people.—Rick Cohen