The county finance committee recommended Tuesday that the county put a hold on distributing $40,000 to Loudoun nonprofits and an additional unassigned $11,000 while it continues revamping the way it decides how to split that money.
Committee Chairman Matthew F. Letourneau (R-Dulles) said that system, which limits funding changes to nonprofits from one year to the next, should be reset every three years. Currently, county funding to nonprofits cannot change by more than 5 percent in either direction year over year.
For example, while the rules require the county to give HealthWorks, which received $180,000 last year, no less than $171,000, first-time applicants such as The Arc of Loudoun at the Paxton Campus can receive no more than $5,000.
“What that would do is essentially create a level playing field every so often, to allow for changes within the organizations and within the community’s needs,” Letourneau said.
County Chairwoman Phyllis J. Randall (D-At Large) said that although the county’s new system for ranking and funding charities was meant to take politics out of the process, the limits on funding changes over previous years brought the politics with them.
“Although this process is much better than it was before, and it is meant to be not political… what you actually did was take the nonprofits who had been funded in the past under the political system into the new system,” Randall said.
Supervisor Ralph M. Buona (R-Ashburn) agreed that the county’s funding has too little flexibility.
“Somebody could apply and be the best nonprofit ever, but if they didn’t get money last year, they can only get $5,000,” Buona said. “And somebody can apply and be the worst nonprofit ever, but if they got money last year, they can only get a 5 percent decrease.” Buona also worried that a maximum 5 percent cut meant well-funded organizations would not have to take their applications seriously.
The finance committee was considering whether to grant $5,000 to eight first-time applicants: Crossroads Jobs Inc., The Salvation Army, Women Giving Back, The Arc of Loudoun at the Paxton Campus, Tree of Life Ministries Inc., Journey Through Hallowed Ground, Liberty’s Promise, and Morven Park.
Supervisors put off granting that funding, noting that the money will be available for the rest of the fiscal year, which is only two weeks old.
“We have 11 and a half months to spend this money if we want to,” Buona said. “I don’t agree with giving it to these eight, and if someone makes a motion to do these eight, I’m going to divide that motion eight times and we’re going to be here all night, because there are two here that I don’t agree with at all.” He declined to specify which two he opposed.
The committee voted 4-0-1 to earmark $51,000 for nonprofit funding, but to delay actually giving any of it out for now. Supervisor Tony R. Buffington (R-Blue Ridge) was absent.
Although he voted in favor of that decision, Supervisor Koran T. Saines (D-Sterling) worried that delaying funding could have ripple effects for some charities.
“For example, Liberty’s Promise, which would be going towards a school, that would be for this school year that’s getting ready to start up,” Saines said. “So if we were to do funding in October, if they were to get funding, they would have to wait a whole year to implement their program in our area.”
Supervisors are also considering cutting recreation and culture nonprofits from the county funding pool entirely.
“It’s hard for me to compare that to someone that feeds children or houses domestic violence victims,” Randall said. “So maybe a different place would be someplace for these nonprofits to receive their funding source.”
The New Formula
The county’s new formula for reviewing applications for funding scores each application based on the mission of the organization, demonstration of a need for its service, management and administration, and financial health and economic impact.
Organizations are then broken into a top, middle and bottom third of all applications. Applicants in the top third get a five percent increase in funding over the previous year; applicants in the middle third get the same funding; and in the bottom third, a five percent decrease. New applicants must be in the top third to receive any funding, and receive only $5,000.
County nonprofit funding is also divided among five areas of need. 60 percent of the county’s nonprofit funding goes to health and related services, 20 percent to emergency services, eight percent to administrative or clearinghouse services, seven percent to hunger and homelessness, and five percent to recreation and culture.
That formula has resulted in leftover money in the county’s nonprofit account. The eight applicants the finance committee was considering scored in the middle tier of applications.
Opening the Door to Nonprofit Funding
The county is looking at revising that system again. The finance committee unanimously recommended a plan for a non-profit needs assessment, which will cost $50,000 in county money plus an additional $25,000 from the Claude Moore Foundation.
In her motion, Randall recommended the assessment “to identify all of the funding gaps and unmet needs within the county’s nonprofit community so that contributors or partners beyond county government understand the extent of this need in Loudoun County, and as a result, have an opportunity to contribute resources towards meeting those needs.” She said major donors often need a comprehensive needs assessment, which the county has never before done, to consider funding in a locality.
“This is not just about government funding,” Randall said. “It’s about opening the door to the conversation that will consider and allow various sources, options, strategies to address the needs in Loudoun County.”
“What we do need to do is recognize that this is really an effort for Claude Moore and others to understand and help nonprofits obtain funding from private funding sources,” Letourneau agreed. “My understanding is that some other counties have undertaken this, and it becomes a tool that other nonprofits utilize when they seek funding.”
The committee also directed county staff to meet with the Loudoun Human Services Network to discuss recommendations it has made about the county’s nonprofit funding.
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