Pelaez Suggests United Way Take Over Nonprofit Vetting Process for City Funding

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The United Way of San Antonio and Bexar County is located at 700 South Alamo Street.

Scott Ball / Rivard Report

The United Way of San Antonio and Bexar County is located at 700 South Alamo Street.

Councilman Manny Pelaez (D8) filed a request last week asking the City of San Antonio to allow United Way San Antonio, a community-based charity organization, to take over the City’s vetting and recommendation processes for agencies to receive City funding.

These “delegate agencies,” which are typically nonprofits, are contracted by the City to provide community services that either the City does not provide or wants to increase. It’s a competitive process and these agencies go through a rigorous application and performance review process to receive funding.

“The delegate agency funding process is more complex and time-intensive than it should be for the agencies, city staff, and council members,” Pelaez states in his council consideration request (CCR). “United Way already has its own tested process that parallels the works that cities like San Antonio do to administer funding.”

Councilman Manny Pelaez (D8)

Scott Ball / Rivard Report

Councilman Manny Pelaez (D8)

Pelaez’s request could be heard by the City Council’s Governance Committee this year.

United Way San Antonio does not currently provide this kind of service to other organizations, but other United Way agencies do.

“We are aware of the CCR and we have a meeting scheduled with Councilman Pelaez’s office in September,” a United Way San Antonio spokesperson said, declining to comment further.

United Way, which has a worldwide network of 1,200 local offices, raises funds to invest in needs unique to the community it serves. In San Antonio, United Way’s focus is on children, education, and struggling families. 

This isn’t the first time the idea to outsource these vetting processes has come up, Mayor Ron Nirenberg said.

“I know [United Way] has a very respectable process,” Nirenberg said. “The City also has a process and we want to make sure that we’re in alignment before we would consider something like that. … I think we need to give it its proper due by examing it on its merits. At this point, I don’t have a position on it.”

Melody Woosley, director of the City’s Department of Human Services, oversees the delegate agency process that starts with agency and community input sessions. The City works with SA2020, United Way, and the San Antonio Area Foundation on addressing gaps in funding and services related to the City’s priorities in family wellness.

Scott Ball / Rivard Report

Melody Woosley, Director, City of San Antonio Department of Human Services

Sorting through applications, monitoring the agencies, and reviewing their performance is “time-intensive,” Woosley said. Ten evaluation panels are formed over a month each year to score each application – a United Way representative typically serves on several. Six City employees are dedicated to checking in with the agencies year-round to make sure they are stable and on track to meet their goals. Other management, fiscal, and support staff are involved in the process.

It’s difficult to gauge how much time and resources the City spends on these processes, she said, because it’s baked into the normal operations of three different departments — Human Services, Economic Development, and Neighborhood and Housing Services. If the CCR is considered, determining that expenditure will fall to the Governance Committee, which is comprised of the mayor and four other Council members.

Currently, delegate agency funding is awarded in two-year cycles. Because fiscal year 2020 is the second year of the current round, the same agencies will receive the same funding next year. A federal grant allowed some increases to nonprofits that assist those living with HIV or AIDS.

It’s somewhat rare for an agency to lose funding in the second year, Woosley said. “There’s usually a couple that we don’t recommend or there’s a reduction [of funding]. … Generally, it has to be pretty bad [to warrant that].”

The City’s proposed $2.9 billion 2020 budget includes $24.7 million in delegate agency funding, but more than $12 million is already designated for programs like Haven for Hope, Project Quest, Center for Health Care Services, and afterschool programs.

That leaves about $12.7 million for five different categories: senior independence, children and youth services, ending homelessness, strengthening families/stable housing, and workforce development.

While a few agencies and programs have been funded for decades, most are newer. The agencies that receive funding sometimes change, she said, but most of the time the nonprofit comes up with a new program.

The city received 116 proposals from 70 agencies vying to be part of the latest two-year funding cycle for the 2019-2020 years and 64 agencies received funding. City staff makes a recommendation, but it’s City Council that makes the final call on which agencies receive funding.

Each submitting delegate agency adheres to a blackout policy where contact with an elected official is prohibited during the submission and vetting process from July to August. While violation of the blackout policy is rare, at least one agency was disqualified because of a campaign donation last year, Woosley said.

“Assigning this function to United Way would protect the integrity of the application and selection process,” Pelaez stated in his CCR. “It would also eliminate the risk of creating conflicts of interest for councilmembers or the appearance of conflicts. Lastly, it would reduce the likelihood that a not-for-profit organization would engage in prohibited lobbying.”

There was a substantial shift in agency funding during the last round as the City implemented clear goals and timelines as part of its new “equity lens” focus that called for services to address long-neglected areas and populations.

The City started measuring outcomes and tracking agency performance toward broader community goals such as reducing homelessness.

“It’s not the easiest thing in the world to contract with the city … small nonprofits have a hard time,” Woosley said. This year, one agency decided not to accept the contract because of the reporting requirements.

If an outside organization took over this process, she added, it also would need to follow similar equity-focused criteria endorsed by the mayor and City Council.

SA2020 President and CEO Molly Cox speaks to the future of her organization.

Scott Ball / Rivard Report

SA2020 President and CEO Molly Cox

Molly Cox, president and CEO of SA2020, said the CCR calls for a process change, not a policy change like she would expect from a policymaker.

“The City of San Antonio has an Office of Innovation that is literally built to do process improvement,” Cox said. “It’s become increasingly concerning that our policymakers are making management decisions, not having policy discussions.”

That management role lies with City Manager Erik Walsh, she said.

“The point is that how you achieve your goals is just as important as the goal itself,” Pelaez said. “Council touches processes every day because there is no black and white line of demarcation between where policy stops and process begins.”

SA2020, a nonprofit that tracks progress on dozens of shared community goals, helped the Human Services department focus its impact last year.

“If the Department of Human Services and United Way are already working together as partners then it doesn’t make sense to move in this direction,” Cox said.

“If the point of the [delegate agency] funding process is to maximize public dollars to then create programming or services or funds that will meet community needs, we also have to be mindful that the City is but one player in a large team trying to move the needle on positive results in the community,” Cox said.

Pelaez said he’d like to see how other cities, such as New York, have worked with United Way on delegate agency funding.

“There’s nothing wrong with blowing the dust of this model,” Palaez said, “and seeing if we can find efficiencies.”

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