Charities eye slice of Obama’s stimulus pie

'Not a silver bullet'
Some associations are trying to help translate the law's potential benefit to charities. The Massachusetts Nonprofit Network, a coalition of charities, for example, is using a $25,000 grant from the Boston Foundation to pay a consultant to produce a newsletter with stimulus updates and tips.

Some government agencies are also offering advice. "We want to make sure people don't go after money they don't have a chance for, or that will be difficult for them to administer," says Mike Roque, director of the Denver Office of Strategic Partnerships, which has co-sponsored two open meetings on stimulus spending for nonprofit groups and sends charities regular e-mail updates.

"What we're saying is this is not a silver bullet; there are some very strict regulations and intensive financial reporting," he says.

The city of Chicago is leading a particularly ambitious effort to help charities use stimulus money effectively.

Chicago will receive more than $1 billion in stimulus money that is allocated to big cities by a formula. For example, it announced in early May that it had developed a plan for using $19.5 million in money it would receive as a Community Services Block Grant — and invited nonprofit groups and others to submit proposals for projects to provide counseling, training, substance-abuse treatment, and other services to low-income people.

But Mayor Richard Daley wanted to ensure that the short-term spending boost would lead to long-lasting economic benefits — and asked foundations to help the city come up with a plan.

"We recognize the stimulus funding is the worst-case scenario of bad grant making, to give nonprofits a lot of money quickly and to take it away, just as quickly," says Terry Mazany, president of the Chicago Community Trust, which in response to the city's request is organizing an effort dubbed the "Recovery Partnership."

The Chronicle of Philanthropy Click here to read additional stories about how nonprofits are seeking and using federal stimulus funds, including: Community health centers expand services with the additional federal money. Charities eye ways to put AmeriCorps volunteers to work. Rethinking homelessness through creative uses of stimulus funds. Food-and-shelter charities face growing demand due to foreclosure victims. Arts groups hope infusion of federal money will help avoid layoffs.

To make matters worse, he says, foundation giving is likely to reach a "nadir" the year much of the stimulus money dries up. That is because many foundations calculate the 5 percent of endowments that they are required to give out annually using average market values from the 12 previous quarters. In 2012, the calculation will reflect market values from a particularly bad economic period.

"It will create a recession echo unless we're thoughtful about this," Mazany says.

The Recovery Partnership unites city officials, foundations, and others who are working to craft strategies for stimulus spending to serve basic human needs, encourage the spread of broadband Internet services, promote energy conservation and public safety, and improve education, streets, and mass transit.

It has also set up a group to look at ways to evaluate the results of the stimulus projects.

Mazany says foundations are exploring how they can reorient their grant making to support the city's goals­. For example, in the short term, foundations are building an evaluation plan and working with banks to set up a revolving loan fund so charities that take on stimulus projects can get short-term loans to tide them over until they are reimbursed by the federal money.

The Donors Forum, an association of grant makers, is also offering training to charities on how to apply for stimulus money.

Over the longer term, Mazany says, grant makers could consider paying for projects to retrofit homes to make them more energy efficient, for example, building on the modest number of homes that will be paid for with stimulus money.

Mazany calls the Recovery Partnership a "game changer," adding: "This is an opportunity to realize the promise of the social innovations that we have been investing in and I think it will build stronger ties of collaboration between city agencies and foundations."

'We're optimistic'
Meanwhile, some charities are acting quickly to get in their bids for stimulus money.

Children's Aid and Family Services, the New Jersey group, has already made plans to get a share of the $1 billion that the stimulus law allocates to Community Development Block Grants, which pay for projects to improve living conditions and create economic opportunities for low- and medium-income families.

It submitted an application to Bergen County, which will award the grants in that region, for more than $500,000 to upgrade a large child-care center it operates.

John Moore / Getty Images file Laid-off worker Bill Edison sits with his family at the Clinton County Homeless Shelter on Dec. 21 in Wilmington, Ohio. Nonprofits are hoping to get a slice of federal stimulus money to tackle problems like homelessness.

The bulk of the money, about $325,000, would go to install 400 solar panels in the building that houses the center and the group's headquarters. Not only would that create jobs and cut energy costs, says Jones, the group's president, but it would also help produce revenue because the charity could sell the excess electricity generated by the panels back to its utility company. The charity estimates it could earn up to $100,000 a year that way.

Other grant money would pay to resurface the child-care center's playground, buy new playground equipment, and install new classroom sinks.

"Everybody and their sister is applying," Jones says. "But we're optimistic. We have a good relationship [with the county] and we have a good plan."

Education spending
Richard Martinez, president of the Young Americans Center for Financial Education, in Denver, learned of a stimulus opportunity after a staff member attended a workshop sponsored by the Colorado Nonprofit Association — and discovered that local counties were receiving money from the U.S. Labor Department to offer job training to young people.

"That really spurred us on to start contacting these government offices and say, 'We have some packages to help you spend some of this money,'" Martinez says.

During the summer, the center typically works with elementary- and middle-school children, but this year it is designing new weeklong classes on entrepreneurship and financial literacy for young people ages 16 to 24.

Denver County, and a tri-county area west of Denver that includes Jefferson County, both plan to use stimulus money to hire the center to teach classes.

Dani Crane, program manager at the Jefferson County Workforce Center, says her three-county area has received $647,000 in stimulus funds from the U.S. Department of Labor to create internships for at least 350 youths this summer.

She wants to supplement the internships with education, and plans to contract with the Young Americans Center to offer at least two classes, at a cost of $1,200 to $2,000 each.

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