.Nonprofits Push Back on County Funding Plan

“It’s like the nonprofit Hunger Games,” says Ray Cancino, the Chief Executive Officer of Community Bridges. 

Cancino is referring to the latest funding recommendations for local community organizations that the county announced last week. Nonprofit leaders were in disbelief as they looked at their awards for the next three-year cycle: some larger organizations had funding for their programs cut in half compared to the previous funding rounds, jeopardizing the future for vital programs that county residents rely on. Some smaller programs weren’t funded at all, leaving leaders scrambling to find new funding sources ahead of the new fiscal year in three weeks. 

Overall, 128 organizations applied for awards, requesting a total of $16 million. 35 organizations were recommended for an award, splitting up the $6 million the county and City of Santa Cruz dished out for the nonprofits.

Cancino says these recommendations will lead to drastic changes in the resources available to county and city residents. His warning was echoed by the dozens of people who showed up at the Board of Supervisors meeting last Tuesday, many of whom shared how these potentially defunded programs have changed their lives.  

Community Bridges—a nonprofit that serves families, children and seniors from low-income backgrounds—will likely see an $800,000 cut in funding from the county. It may even be forced to end programs like its Santa Cruz County Early Education Child Care—or at least reduce its open slots and resources. 

The reason for the unexpected changes is a shift in the funding process. In 2015, the county and the City of Santa Cruz worked together to create CORE, an application process intended to give newer organizations a shot at money that the county and city allocate for local community organizations. Multiple county supervisors say the old way of handing out county dollars was uncompetitive, and limited pathways for new organizations to get money.

“There are a number of service providers who have not had access to this money for 35, 40 years,” Human Services Director Randy Morris said at the Board of Supervisors meeting. “To create a level playing field, we put in place a technical assistance program to help make sure all service providers had an opportunity to apply for these funds.” 

But nonprofit leaders across sectors question whether a level playing field is what was ultimately achieved, and why a more abstract sense of “fairness” is being prioritized over the practical services these programs provide. 

“We all as nonprofits trusted the county, and the Human Services Department specifically, to redesign the CORE program to really do two things,” Cancino says. “To find equity in our social services and to provide better return on investment for our community. Now we hear [Human Services Department] says its goal is to get new programs funding and new services, irregardless of the impacts of existing service.” 

As nonprofits search for revenues to cut—a difficult task within the financially restricted, already strained nonprofit sector—the new CORE process is becoming a battle for survival.  

“If you’re going to ask for more money,” County Supervisor Ryan Coonerty said at Tuesday’s meeting, “you’re going to need to tell us which organization we should take that money from, and why we should give it to you instead.” 

The Core of CORE  

When Sandy Davie opened her email to see that the Toddler Center was not recommended to receive funding from the county, her heart dropped. 

“It felt like a bomb hitting my chest,” says Davie, the organization’s director. Her voice is tight, and she asks if we can take a break from speaking. “I’m sorry, I’m not usually like this. But the county and the city are saying childcare doesn’t matter.” 

The CORE funding makes up around 20% of the Toddler Center’s budget. That money is set aside to provide a sliding scale of services for lower-income families. Without that money? Well, you can do the math, says Davie. 

“Basically, we’ll only be able to provide childcare to the upper middle class,” she says. “But this is bigger than just us.”   

Davie thinks the entire childcare sector is at risk of seeing major cuts. The county only funded one childcare program, Walnut Avenue Family & Women’s Center. Community Bridges’ Family Resource Centers are expected to be defunded, with programs similarly gearing up to discontinue subsidized child care services. 

Davie says data shows low-income families in Santa Cruz County have limited access to childcare services, and that this limited access negatively affects low-income households. She was asked to prove the importance of childcare, so she used this data in her CORE application. So she wonders on what basis applications were evaluated, and if there was an effort to look at the impacts defunding these programs will have on a sector comprehensively.  

“I’m using all of the data you gave me and I’m proving to you childcare is important. And for the decision to come out, basically, childcare is not important?” says Davie. “There’s a tension between the data and the results.”

CORE used a grading system for the work that organizations are doing around the county. Programs were split up into small, medium and large tiers, and graded based on the corresponding rubrics for each tier. Answers to the questions were graded by a diverse and trained group of 58 panelists, and a program’s final grades were then used to determine funding. 

But the questions, and how answers were weighted, seem arbitrary, some leaders say. Cancino points to a question that asks organizations what kind of impact their program will make in the community. That question is only worth 5% of the total points, despite being one of the most consequential determinants of a program’s value, says Cancino.  

The county, for its part, defends its process, saying there were multiple stakeholder meetings held for organizations to have input on the different elements of the application, and that the resulting process is one that all organizations gave feedback on. 

“There were 12 opportunities for the current service providers to share their perspective about how to prioritize a particular population, or a particular region, or for a particular provider to say why they felt they deserved more money,” says Morris. “There were also 64 training sessions provided before the applications that ended up supporting 298 participants. The rankings are fair.” 

Davie says she went to these training sessions. She says she was often one of the few Directors there: many other larger organizations sent grant writers, because the process was tedious and required significant research and writing. Davie wonders if this limited smaller organizations’ shots at funding.   

Davie also disagrees with how the county is portraying the previous award system as not competitive or friendly to new programs—and as a teacher at Cabrillo in History, she’s one for historical accuracy. 

“I had a person working for the county that was dedicated to going and visiting the places to see what was happening, in addition to rigorous reporters,” Davie says. “There was a lot of oversight and interaction between the county and the nonprofits that were being funded.”  

Ultimately, what leaders across organizations repeated was that although the CORE process might be flawed, there’s only so much that can be done with the $6 million budget—especially in the context of $16 million of requested funding. 

“Ultimately, the process isn’t going to matter very much,” says Cancino. “Because these budget policy conditions are unsuited to the reality of where we are at right now.” 

Where’s the Money?

The county’s budget is estimated to reach the billion mark for this year—an increase of 27% compared to the last fiscal year. With that influx of cash, nonprofit leaders wonder where all that money is going, as they fight over the $6 million that was divided up between 36 programs.

The top two categories that the county’s funds go to are employee salaries (46%), and services and supplies that include things like office expenses and building maintenance (33%). When looking at the breakdown of which departments get the most money, the departments receive as follows: Health and Human Services (38%); Land Use and Community Service (18%), and Public Safety (16%). 

The Health and Human Services Department (HSD) receives the largest chunk of money out of the all county departments: nearly 400 million. Yet the CORE funding program, which falls within the HSD, only sees around 9% of that money. 

Part of the reason, says Supervisor Ryan Coonerty, is because the HSD has separate awards and contracts that it hands out to nonprofits. The other part is that the county is providing homeless services and mental health services. 

“To the extent that people want us to reallocate other general fund dollars,” says Coonerty, “that means cuts to parks, roads and public safety. There’s no pot of money out there that’s left unspent.”  

Coonerty also promises that the county has plans in the works to soften the blow for some of the programs that were left with no funding this cycle, and to provide supplemental services in the areas needed. 

“I and other board members have heard that these funding allocations have some very real impacts on important community programs,” says Coonerty. “So we’re looking at how we reduce some of those impacts.” 

In the next few weeks, organizations dissatisfied with their funding allocations will be working on their appeal case, which they will present at the county’s next meeting on June 28. That’s when the final awards will be announced.   

Still, Coonerty emphasizes that the sum of money will be the same—it will just be sliced differently. 

“​​I don’t think it’s good for organizations to be pitted against each other,” says Coonerty. “But if what you’re doing is standing up and asking us to fund your organization, you’re implicitly saying that we need to cut somebody else. So whether you want to say it or just want the board to do it and not take responsibility for that, the reality is the same.”