Optimism Turns to Frustration for Some Groups Seeking Stimulus Aid

Mary Knepper, grants manager at a Syracuse, N.Y., hospital, was confident that her organization was in a good position to win some of the nearly $800-billion from the economic-stimulus package passed by Congress this year.

After all, she says, the hospital’s plan to build a new emergency room would have created temporary construction jobs and long-term health-care jobs. What’s more, it would have an environmentally friendly design and would have improved access to medical care. In all of those ways, the plan fit lawmakers’ goals when they passed the massive spending package.

But the application for St. Joseph’s Hospital Health Center to get stimulus money languishes, with chances for approval waning, says Ms. Knepper.

Four others it has filed have been turned down or appear to be stuck in a review process.

“It’s pretty frustrating,” she says. “We have shovel-ready projects that seem to fit every criteria, but the money is just not going to community projects.”

Ms. Knepper is hardly alone in her disappointment.

Since February, the American Recovery and Reinvestment Act, the official name of the stimulus law, has provided billions of dollars to states, municipalities, and nonprofit organizations around the United States, but it has also left plenty of charitable groups out in the cold.

“The myth about the stimulus was that there’s a lot of money and it’s easy to get,” says Cynthia M. Adams, chief executive of GrantStation, a Fairbanks, Alaska, company that collects information about grant opportunities around the country. “Now the reality is sinking in that there’s not as much as you think, and it’s not easy to get.”

Jane Hexter, of Grants Champion in Trumansburg, N.Y., explains that only a fraction of the stimulus money has been available for open, competitive grants for the average nonprofit group.

“You start with $787-billion, but then you need to take out tax relief, research, infrastructure investments, funds to states and school districts, and direct aid for the elderly, homeless, and the unemployed,” Ms. Hexter says. “When you look at what is available through discretionary grants to the typical nonprofit, you get down to perhaps $20-30 billion or so.

That’s nothing to sniff at, but it’s not nearly as big a pot as everyone was looking at initially.”

Money to the States

Other experts say that while competition for grants is tight, more stimulus money may be available to nonprofit organizations than appears at first blush.

Nicholas Johnson at the Center on Budget and Policy Priorities, a nonpartisan research group in Washington, says that money distributed to state and local governments, for example, may “wind up benefiting nonprofits either through grants or contracts.”

Still, plenty of once-hopeful charities have turned frustrated.

Lutheran Child and Family Service of Michigan in February submitted proposals for seven projects in hopes of receiving stimulus funds for, among other things, a $241,000 job to reconstruct a driveway and bridge on its campus to connect a residence for troubled adolescents with their school.

Robert G. Miles, the organization’s executive director, says he still has not yet heard about the proposals’ fate, but he does know that they are competing with more than 17,000 applications for projects totaling $59-billion throughout the state. Michigan’s cut of the stimulus money is just $18-billion.

“It’s still hard to figure out exactly where the money is and where it is going,” Mr. Miles says, “but one thing is clear: There’s just not enough to go around.”

Learning Experience

Some organizations are finding a silver lining in their stimulus application rejections. The experience of applying, they say, has helped them better understand the grants process and improve their chances of eventually qualifying for government grants.

Joanne Mandry, chief financial officer at Children’s Aid and Family Services, in Paramus, N.J., says the legwork she and her colleagues did for three failed applications has made her organization into a strong contender for other grants.

For example, because Children’s Aid applied to the Department of Justice for stimulus money to expand a mentor program for foster-care children, it is ready with plans and details to resubmit to the federal government or to other government and private grant makers.

The Flintridge Operating Foundation, in Pasadena, Calif., also turned down by the Department of Justice for a grant to recruit mentors, plans to scrutinize the comments the agency’s reviewers returned with their rejection.

“We want to identify the missing piece so we know for next time,” says Mark Eiduson, Flintridge’s director of strategic partnerships.

To help his organization seek federal funds, Mr. Eiduson took a weeklong grants course this fall, given by the Grantsmanship Center, a Los Angeles company that holds trainings around the country.

One key lesson, he says: Get ready in advance.

“You have to have all your ducks in a row long before the request for proposals comes out,” Mr. Eiduson says. “You have to have a program designed and ready; a budget; metrics around the project, like how many clients will be served; and a plan for measuring and evaluating the effectiveness of the program.”

So Little Time

For many stimulus grants, and for federal grants in general, applicants typically have about six weeks to apply. That’s not a lot of time, particularly to complete some federal agencies’ applications, which can run more than a couple dozen pages and include detailed questions about both the project and the organization.

Another tricky aspect of the application process is that many stimulus grants require — or appear to prefer — collaborations, charity officials say.

Working with other organizations may be an effective way to provide services, but the planning necessary for such collaborations is often complicated and time consuming.

The Oregon Center for Nursing, in Portland, more than a year ago formed a 23-member statewide coalition of groups to reduce the shortage of nursing-school faculty members.

When the Department of Labor announced this summer that stimulus money would be available to increase the number of nurses in the United States, the group was ready to pounce.

But the government’s request for proposals varied somewhat from the faculty project the coalition had prepared, and it was unable to adapt in time.

“We have a strong coalition ready to go with a number of programs that address the nursing shortage,” says the nursing center’s executive director, Kristine Campbell. “But to fit into exactly what the grant wanted meant we’d have to change a bit, and it was too rushed to get everybody moving in that direction.”

Without collaboration, most small nonprofit groups have little or no chance of getting stimulus money, grant-seeking experts say.

Federal grants are typically geared toward larger, more sophisticated organizations with enough staff members and systems in place to administer and manage the money and fulfill the government’s considerable reporting requirements.

And because stimulus grants are intended to be distributed quickly, government agencies in many cases accept applications only from groups that have received federal grants before. That way, they don’t have to vet new organizations.

Success in Teamwork

With an annual budget of less than $500,000, Mountain Community Resources, in Felton, Cal., would have been hard-pressed to make its own case for a stimulus grant, even though the organization recently had to cut its services to homeless people after losing money from the county.

But the group joined 13 other local organizations serving the homeless, and together they won three grants worth $4-million over three years from the Department of Housing and Urban Development.

Mountain Community Resources will get a fraction of that — $96,000 over two years — but that’s enough to hire back three laid-off employees and reopen its doors on Fridays, after having closed one day each week to save money.

Jennifer Anderson-Bähr, the group’s executive director, says her group has worked closely with social-service and other charities in the area for more than 20 years.

“Long-term county collaboration made this possible,” she says. “Our chances at the stimulus money on our own would have been slim or none at all.”

Even as part of a collaboration, however, Ms. Anderson-Bähr is still in the minority among charity officials nationwide who started the year feeling optimistic about their organizations’ ability to benefit from the stimulus package.

Says Donna Kennedy, a vice president at Children’s Aid: “It looked like a really big number when it first came out, but this is a big country. When you divide in the number of nonprofits that have good, worthy programs, the dollars really shrank.”