City Council looks to bring accountability to nonprofit funding
by Paige Rentz
Anniston City Council is looking for a more professional way to fund local nonprofits, and members may have found a solution with the Community Foundation of Northeast Alabama.

At a Monday work session at the Wiggins Community Center, council members met with Jennifer Maddox, the foundation’s president and chief executive, to discuss a proposal that would turn over to the Community Foundation the administration of the council’s grants, something the foundation does every day.

Mayor Vaughn Stewart said the Community Foundation has expertise in dealing with nonprofits and would apply a set of standards for awarding grants.

“That’s very important,” he said, “because as we reach out and try to do our mission…it’s very important those dollars reach the mission they’re supposed to reach, and they see to that.”

Maddox told the council that the foundation serves three major functions: to award and administer grants; to help donors make decisions in order to achieve their philanthropic goals; and to serve as a community partner for nonprofits and government entities.

The foundation currently holds assets of about $30 million in more than 125 funds, $25 million of which is invested by a professional firm. It awards about $1 million a year in grants.

Councilwoman Millie Harris said she liked the idea that politics would be removed from the funding.

“We do not need to be in this kind of business,” she said. “You are the professionals.”

If the city of Anniston partners with the Community Foundation for such an endeavor, the foundation would create a new fund and grant process that would function like others it already operates.

Nonprofits who receive funding from the city grant process would still be able to apply for other grants through the Community Foundation with the same electronic application. City Finance Director Danny McCullars said the city currently funds more than 20 nonprofits that would be under the competitive grant process under the proposal.

Councilman Jay Jenkins said he thought the accountability that would come along with the process is critical. He said the city appropriated about $350,000 to nonprofits last year.

“If we’re going to hand out this kind of money, we ought to know that it’s being properly managed and spent by these entities,” he said, adding that he wasn’t implying that it was not being spent properly, but the city still had no real way of knowing that.

“We owe it to the public to have some accountability to the tax dollars we collect from them," Jenkins said.

Maddox said the grant application would ask a number of questions about the nonprofit and the proposed project. If funded, the nonprofit would receive half the award initially. After six months, the recipients would be required to file a report, which among other information, would include the status of the nonprofit’s work on the project. The foundation would then award the remainder of the funds if all guidelines are followed, and the recipient would be required to file another report at the end of the year.

If any of the council’s appropriations remain after the initial grant cycle, Maddox said, the foundation could either open up a second round of grants in the spring or roll the funds over to the following year’s grant cycle.

Maddox said the proposal currently being discussed includes a 5 percent fee of the total appropriations to cover the foundation’s administrative functions. The foundation would also set aside an additional 5 percent of the total appropriations to fund a city endowment. Years down the road, this would give the city a source of funding for the grants aside from tax revenue.

Stewart told the council members that an additional eight nonprofits currently funded by the city would not be subject to the competitive funding process. Four — Coosa Valley Youth Services, the Calhoun-Cleburne Mental Health Board, the Calhoun County Department of Health and the Animal Shelter — would be administered through the Community Foundation at a reduced fee of 1 percent of their appropriations. Four others — the Anniston-Calhoun County Public Library, the Anniston museums, the botanical gardens and Spirit of Anniston — would continue to be funded by the city.

Staff writer Paige Rentz: 256-235-3564. On Twitter @PRentz_Star.

© 2013