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November 11, 2013

Applications overwhelm CT $20M nonprofit program

Photo | Pablo Robles Jeffrey Shaw, director of public policy for the Connecticut Association of Nonprofits.

Applications have overwhelmed Connecticut's first-ever nonprofit grant program for operating expenses, where even with a two-week deadline extension, the administrators still are sorting through the requests.

More than 250 nonprofit organizations have submitted applications for 500 projects for the first year of the state's $20 million nonprofit program, unveiled by Gov. Dannel P. Malloy on Aug. 21 to aid the struggling nonprofit industry.

“With many nonprofits barely hanging on due to the recession and subsequent budget cuts, there's simply nothing left to cut, so it's important for leaders and the public to hear about the state of the nonprofit sector,” said Jeffrey Shaw, director of public policy for the Connecticut Association of Nonprofits.

The original deadline for the program was Oct. 4, but the Office of Policy and Management extended it to Oct. 18 because so many organizations had needs to be filled. The applicants are supposed to know about their status on Dec. 15, with a target date of March 15 to have the grant agreements in place.

However, in light of the large volume of applications received, these dates might be modified if the evaluation committee requires additional time, or for OPM to negotiate and execute grant agreements, said Gian-Carl Casa, OPM undersecretary for legislative affairs.

The state budget for this fiscal year gives $20 million for the program, subject to the approval of the State Bond Commission. The budget gives the option for another $20 million in the next fiscal year, starting July 1, if the bond commission approves.

“We understand that the second round of $20 million might only be awarded based on the interest of this first round of applicants,” said Shaw. “We sincerely hope and encourage the governor to commit to fully funding the second round of $20 million in fiscal year 2015 for these important projects.”

An evaluation committee has been established to review the eligibility of and rate applications. The committee will then make recommendations to OPM Secretary Benjamin Barnes, who will make the final funding decisions, said Casa.

Nonprofits have faced significant financial headwinds in recent years from state budget cuts, a poor economy, and federal sequestration. Investments in technology, like electronic health records, and capital and infrastructure improvements, like new roofs and energy efficient lighting, have been relegated to the back burner, said Shaw.

While many nonprofits have attempted to compensate for funding deficits by stepping up their fundraising efforts, it hasn't sufficiently filled the gap, Shaw said.

Consequently, nonprofits have been forced to ratchet down expenses, impacting employee salaries and benefits. Furthermore, the quality of nonprofit health care packages has deteriorated, while organizations also have increasingly reduced their contribution to employee health benefits, said Shaw.

“These funds, through a competitive application process, will allow nonprofits to invest in the kind of projects that will help them continue to provide quality programs and services that consumers expect,” said Shaw.

The grant program will help nonprofit providers that do business with the state invest in projects that will achieve new efficiencies and enhance the delivery of services. That's a good thing, Shaw said, considering some investments, like electronic health records, could end up saving money long term, serving as a model for other providers to follow.

While lauding the governor and legislative leaders for having the foresight to create the grant program, Shaw said its use is limited. It only applies to organizations that have contracts with state agencies to carry out services. And it only covers expenses related to facility alterations, renovations, improvements, additions and new construction, health, safety and Americans with Disabilities Act projects. Ultimately, Shaw would like to see other support programs, including the Small Business Express Program, Nonprofit Collaborative Incentive Grant, and Neighborhood Assistance Act, receive further investment from the state as well.

In the long run, the overwhelming number of applicants for the program will elevate the conversation on how to strengthen the nonprofit sector as a whole, Shaw said. 

It's an important conversation, he said, noting that nonprofit employees make up 12 percent of the state's workforce — more than manufacturing, aerospace and finance.

“In an era of limited, if not diminishing resources, it's critical to find new and innovative ways to support programs and services,” Shaw said.

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