Need deciding nonprofit funding

By Timothy Pratt

Thursday, June 26, 2008 | 2 a.m.

Two branches of government say they are becoming more businesslike in the way they give out millions of taxpayer dollars to nonprofit organizations in Southern Nevada.

The idea is to determine what the region needs before choosing which groups should get public funds and to measure results afterward. Before, there was a tendency to fund the same programs year after year, or base decisions more on what nonprofit organizations wanted to do than on need.

The change is being driven by tighter budgets and increased scrutiny, experts say.

The two entities — Clark County, at $5.6 million, and the Southern Nevada Workforce Investment Board, at $2.9 million — allocated funds this month.

Each has its own method, but they have in common a move to what John Ball, executive director of the investment board, called “data-driven decision-making, (and) not making decisions based on funding history or political interests.”

Douglas Bell, manager of the county’s Community Resources Management Division, called the shift “a philosophical change.”

“We used to fund what nonprofits were most comfortable doing ... but now we see we have gaps in services and we need to find ways to fill those gaps,” he said.

“What ultimately is being achieved is focusing resources toward the greatest need in the county,” Bell said of the new approach, now in its second year.

After choosing what proposals should be funded, Bell said, the idea is to focus more on “outcomes as opposed to outputs, what I call the big ‘So what?’ ”

Allison Fine, a senior fellow at Demos, a New York-based think tank, said the valley is taking an approach that has been circulating for about 15 years through the nonprofit world. Fine did a nationwide study of how nonprofit organizations measure their results.

“First, there’s been a number of scandals in the nonprofit world, most of them financially related,” she said. And second, municipal budgets are thinner. The end result: “Nonprofits are trying to be more like the business sector,” Fine said.

The change may be hitting the valley now because our nonstop growth has required nonprofit organizations to step in where government is absent, and there’s a corresponding need to make sure the public money is well-spent, Fine said.

A similar change was announced last month by the United Way of Southern Nevada. That agency will hand out $11 million this year to nonprofit organizations, making it the largest private source of funding in the valley.

Bell said the county began making its move in last year’s allocation of $5.9 million, but the full transition to a more comprehensive and systematic process will take a few more years. “In some respects, it’s like we’re kind of moving an ocean liner,” he said. “You don’t move it all at once.”

For one thing, he said, “we don’t want to shock the nonprofits.” More than 100 local organizations apply each year for money from the county’s general budget.

The new method starts with asking staff who work in four key areas what needs they see in the valley. Those four areas are family, youth, social services and the homeless.

Then Bell’s agency talks with the nonprofit organizations about those needs. The organizations then apply for grants.

Kirby Burgess is senior vice president of WestCare, at the top of the list in county funds in each of the past two years, with $1.1 million for 2008-09 and $1.3 million last year.

He said he is thankful the county gave his organization a heads-up about the changes. “It is a step in the right direction, and nonprofits should work closely with government to be accountable for the funding they receive,” Burgess said.

WestCare is to use the money to help teens who are in trouble with the law or have run away from home and mothers who are kicking drugs.

Meanwhile, at a recent Southern Nevada Workforce Investment Board meeting, a member of the public drew attention to the number of times board members reviewing nonprofit proposals had pointed out that organizations lacked a way of measuring results.

“We asked for more specifications than we have before about outcomes,” Ball said afterward. The board had plenty of reason to make the change, having suffered a series of negative audits in recent years regarding its handling of federal dollars to train people for jobs. And the $2.9 million being divvied up at the May 28 meeting was only a piece of the agency’s budget, which tops $8 million.

As for deciding to whom the board should give money, Ball said his agency is investing for the first time in research to guide the process. One example is a recently completed study that shows which ZIP codes exhibit interwoven issues such as juvenile crime and poverty, to target job training efforts in those areas.

The movement to become more businesslike in allocating and tracking public money to nonprofit organizations is needed, but can be taken too far, Fine said.

“There’s not always a direct correlation between the private sector, where you produce a widget and make money or you don’t, and working with human beings,” she said.

That, Fine said, “requires unique measures to reflect the different work of improving people and communities.”

Also, government can go even further in improving the process of funding nonprofit programs — what she calls “opening up the decision-making process, Wikipedia-style.”

Fine said the public could be involved in funding decisions if government agencies made more information available on the Internet and solicited input about what services communities need.

“This would be taking the next step,” she said. “It’s right on the horizon.”