An Inside Look at the Proposed Federal Budget
The White House recently released A Budget for a Better America, the administration’s 2021 federal budget proposal.
We’re digging into the budget and highlighting a few key items including education, safety net programs, national service funding and the Great Lakes Restoration Initiative (GLRI).
In the education component of the budget, Ridgway White, president and CEO of the Charles Stewart Mott Foundation, has shared a statement in response to a recommendation in the budget to move from dedicated federal funding to a block grant for several programs, including after-school.
White says this move would ultimately “force states to make impossible choices with fewer resources to support nearly 30 existing education programs. That means more than 1.7 million young people in our country are likely to lose their after-school programs.”
In the statement, White shared the value of the 21st Century Community Learning Centers (21st CCLC) program which currently receives dedicated federal funding to support the creation of community learning centers that provide children with academic enrichment opportunities after school, particularly students who attend high-poverty and low-performing schools.
“21st CCLC is a public-private model that encourages partnerships, leverages local resources and expands opportunities for millions of young people in their communities,” White said. “It also makes good fiscal sense. Research shows every dollar invested in afterschool programs saves $3 by improving kids’ performance at school, increasing their earning potential, and reducing crime and social safety net costs.”
National Service Funding
Moving on to other agencies, the budget includes a recommendation to eliminate federal funding for several programs, as the administration says these programs have “no proper federal role.” These include the same agencies that have been slated for elimination in the administration’s previous four budget proposals: National Endowment for the Arts (NEA), the National Endowment for the Humanities (NEH) and Corporation for National and Community Service (CNCS).
The CNCS includes both AmeriCorps and Senior Corps, which provide pathways to engage thousands of Americans in intensive service to meet critical community needs and expand economic opportunity.
Last year, in Michigan alone, 8,900 Senior Corps and AmeriCorps members served as volunteers at over 1,700 locations across our state, including schools, food banks, homeless shelters, health clinics and youth centers.
According to the CNCS, it invested more than $25.5 million in federal funding in Michigan last year to support cost-effective community solutions and through a public-private partnership, generated more than $33.9 million in outside resources from businesses, foundations, public agencies and other sources.
“This local support strengthened community impact and increased the return on taxpayer dollars,” they share.
The budget states in part: “To the extent these activities have value, they should be supported by the nonprofit and private sectors and not with federal subsidies.”
In previous budget cycles the CNCS, NEA and NEH received bipartisan support in the final versions of the budget passed by lawmakers.
The GLRI, which has also typically received bipartisan support in Congress, is a multi-agency effort to ensure a healthy future for our lakes and protect them from pollution, invasive species and other environmental threats. For the first time the Trump administration is recommending additional funding for the GLRI in the budget proposal.
However, the budget includes a 26% reduction in funding for the Environmental Protection Agency (EPA) which houses the GLRI. Within the EPA budget, $6 million is earmarked for continued research and work to address PFAS contamination.
Safety Net Programs
The New York Times reports there are reductions proposed for several safety net programs, including a reduction of $15 billion to the Supplemental Nutrition Assistance Program (SNAP).
Our Office of Foundation Liaison (OFL) has been working with the Fremont Area Community Foundation and the McGregor Fund over the past year to consider ways in which philanthropy and state government can work together to improve safety net programs and increase economic mobility in Michigan. Months of research and collaboration culminated in a convening in November 2019, with CMF members, state officials and nonprofit leaders coming together to discuss program elements, allowable guidelines, Michigan-specific implementation, utilization and funding.
This year OFL is continuing the dialogue around Michigan’s safety net with partners around the state in hopes that dialogue will set the base to begin working on building a bridge for the many Michigan children and families supported by these programs.
Check out the budget.
DAFs Create Giving Opportunity for Many
Legislation aimed at requiring more disclosure from donor advised funds (DAFs), which has been in the works in California for nearly a year, died in committee at the end of January.
In its original form, Assembly Bill (AB) 1712 was aimed at DAF “sponsors disclosing information about individual funds or accounts.”
Southern California Grantmakers (SCG) shared in a recent policy update that AB 1712 would “impose significant burdens on community foundations and reveal donor identity of DAF accounts – including the trustees of many SCG members who use DAFs as a form of their philanthropy.”
SCG along with other regional grantmaker associations in California opposed the bill since such legislation could lead to concerns about privacy and could disincentive this rapidly growing giving vehicle.
While the bill isn’t moving forward, the conversation in California is drawing attention throughout the sector, recognizing what happens in California could have implications across the country.
According to the latest data from the National Philanthropic Trust (NPT), “grantmaking from donor advised funds to qualified charities has nearly doubled in the past five years. In 2018, philanthropists recommended grants to charities from their donor advised funds totaling $23.42 billion.”
In 2018, the annual payout rate for DAFs was nearly 21%.
NPT shows that Michigan is among nine states in the country, including California, that have more than 40 DAF charitable sponsors.
“DAFs are a tool, a charitable incentive and not just for high net worth donors. The thresholds are varied but generally modest to help create an opportunity for many to give,” Kyle Caldwell, president and CEO of CMF said. “It is for all those interested in philanthropy but who do not necessarily feel they need to establish a formal foundation. It is an on-ramp to a potentially deeper level of engagement in community problem solving. When facilitated through a community foundation, their grants can be stewarded with the deep experience and knowledge of a trusted source.”
In Michigan, we have seen continued DAF growth through our member community foundations, which are accredited through national standards.
Kalamazoo Community Foundation and Grand Rapids Community Foundation are among the CMF member community foundations with the largest number of DAFs.
“Establishing a donor advised fund at a community foundation offers donors the rare opportunity to gain insight from a professional grantmaking staff,” Joanna Donnelly Dales, vice president of donor relations at the Kalamazoo Community Foundation (KZCF) said. “Community foundations are uniquely positioned to understand their community’s needs and the organizations addressing those issues most effectively. Donor advisors can leverage this expertise to make their giving more personally meaningful and impactful in the community.”
According to our most recent Community Foundation Databook survey, 62% of the 50 community foundation respondents say they have an articulated policy in place for inactive donor advised funds. Of those, nearly all require the DAF holder to make distributions within 1, 2 or 3 years.
“To maintain focus on the most pressing needs for our community we engage DAF holders regularly, introducing them to organizations and networks working in their areas of interest,” Diana Sieger, president of Grand Rapids Community Foundation said. “This builds trust in the community foundation and strengthens our relationships with donors, which we believe will ensure continued support and investment in our community.”
SCG shares that the lawmaker behind AB 1712 is expected to introduce new legislation in the coming weeks.
The conversation in California is an issue CMF will continue to monitor.
Clean Energy in Action in Northern MI
A new publication highlights clean energy projects in Northern Michigan and the Upper Peninsula, demonstrating the leadership role community foundations can play in advancing clean energy in the communities they serve.
“Harnessing the Energy of Michigan Community Foundations,” a clean energy storybook, shares the stories of four communities that were awarded Community Foundations for Clean Energy grants from the Charles Stewart Mott Foundation. These projects were also highlighted in a recent video series led by CMF.
The projects involved the creation of new dynamic partnerships, community conversations and a range of energy efficient upgrades in the participating communities.
In Northern Michigan, the Grand Traverse Regional Community Foundation (GTRCF), Charlevoix County Community Foundation and Petoskey-Harbor Springs Area Community Foundation collaborated as a regional team in this work.
They worked with three nonprofits to highlight sustainable energy work underway in the region and increased public awareness through workshops and community meetings.
The project also helped participating cities benchmark and understand the energy usage of their city buildings and create management goals and plans. One outcome of the team’s work was helping to inform a plan for Traverse City and Petoskey to establish 100% community-wide renewable energy goals.
In the UP, the Community Foundation of Marquette County (CFMC) led a partnership that supported installation of a solar array on an older home recently purchased by a young family, and signed up another household to buy solar energy from a solar farm, efforts that others in the community could see and then consider replicating in their own homes.
CFMC also installed solar panels on their office building.
The Keweenaw Community Foundation said with such high utility rates in the UP they wanted to work with the Mott Foundation through this grant to find ways to reduce energy costs and the community’s carbon footprint.
This worked involved collaboration to build nonprofit capacity through energy efficiency. As a result, several nonprofits, including the Calumet Theater, converted to LED lighting and 97 homes in the community were winterized.
The M&M Area Community Foundation partnered with several entities to conduct energy audits in 10 of its area school districts and train teachers in raising awareness about energy efficiency with their students. Classrooms held a competition that engaged students in considering ways to be more energy efficient at home with their families.
Watch our Clean Energy video series.
Have questions? Connect with Andrea Judd-Shurmur, director of Learning Services at CMF.