Foundations Provide Support to Ensure Stimulus Funds Are Put to Good Use

As federal economic-stimulus money flows through states and cities, some foundations are making grants to ensure it is put to good use.

One major effort is taking place in California, where the California HealthCare Foundation, in Oakland, is helping the cash-strapped state take advantage of its share of roughly $36-billion in stimulus spending through 2016 to expand the health-care system’s use of information technology.

“We see it as an unprecedented opportunity given the enormousness of the funds available,” says Sam Karp, the foundation’s vice president for programs.

The stimulus money will help create a nationwide system of electronic health records, a step that is seen as essential in the larger effort of bringing down health-care costs.

There’s just one problem: California must provide matching funds and take other actions to qualify for its share of the money, which Mr. Karp says is roughly $3-billion — and it is plagued with severe budget problems.

Matching Funds

The California HealthCare Foundation, whose mission is to promote innovations that improve health care in the state, has decided to help out.

Mr. Karp says it is spending $450,000 to hire a health-care consulting firm to help the state’s Department of Health Care Services develop a plan for using the stimulus money.

The California HealthCare Foundation has also agreed to provide the 10-percent matching funds that the state must provide for administrative costs related to a program that provides incentive payments under the Medicaid program to health-care professionals and hospitals that adopt electronic health records.

Mr. Karp estimates that the foundation could pay up to $500,000 for the matching funds.

The foundation has also agreed to contribute $2-million in matching funds so that California can apply for federal money to create a $10-million fund to provide loans to help health-care providers buy electronic-records technology that will help them qualify for Medicaid or Medicare incentive payments.

Despite the foundation’s loss of revenue during the economic downturn, Mr. Karp says California HealthCare took those steps because “we were worried that this extraordinary opportunity would not fully be taken advantage of.”

Among other foundations providing money and time to help state and local officials develop strategies for attracting and spending federal stimulus money:

• The Chicago Community Trust is leading an effort to bring together foundations, city officials, and others to help the city develop a plan for using the federal dollars that are coming in grants allocated by formula.

• Several Michigan grant makers — including the W.K. Kellogg Foundation, the Kresge Foundation, and the New Economy Initiative for Southeast Michigan — have agreed to spend almost $1-million to provide consulting help to the state’s Department of Energy, Labor, & Economic Growth so it can take advantage of stimulus money that is available for weatherization and energy-efficiency projects. The state asked for the help because it is so short staffed, says Robert Collier, president of the Council of Michigan Foundations.

• The Rockefeller Foundation, in New York, is cosponsoring a “boot camp” at Harvard University to train teams of state and local government officials to use stimulus money for energy-efficiency projects in creative and effective ways. The foundation is also considering other ways to help state and local governments — for example, by providing management advice or designing a template that could be used to fulfill the stimulus law’s reporting requirement.

Debra E. Blum and Caroline Preston contributed to this article.