Urban County: Nonprofit Funding Update

First cycle of "coordinated model" in progress

Washtenaw Urban County executive committee meeting (Jan. 25, 2011): Urban County members – a group representing 11 municipalities in Washtenaw County – got an update on a new effort to coordinate the funding of local nonprofits.

Damon Thompson, Teresa Gillotti

Damon Thompson, operations manager for the Washtenaw County/city of Ann Arbor office of community development, talks with Ypsilanti city planner Teresa Gillotti after the Jan. 25 Urban County meeting.

Nonprofits are vying for funds from the city of Ann Arbor, Washtenaw County, the Urban County, and Washtenaw United Way. Nearly 60 nonprofits applied to the first phase of the process, in which they were asked to supply basic financial and governance documents. Of that group, 51 were qualified to respond to a request for proposals (RFP) that was issued Jan. 28.

It’s still unclear how much funding will be available, but it could be less than the nearly $5 million that was awarded from these groups last year. Budgets for Ann Arbor and the Urban County haven’t been finalized, and the 2011 county budget is facing about $1 million in as-yet-undetermined cuts.

At last week’s meeting, three members of the Urban County’s executive committee – Pittsfield Township deputy supervisor Barb Fuller, Ypsilanti mayor Paul Schreiber and Ann Arbor city councilmember Margie Teal – were appointed to review applications for the coordinated funding process. All governing boards of the four entities involved in this cycle’s funding will appoint members to a review committee. The fifth partner – the Ann Arbor Area Community Foundation – will fund capacity-building grants to nonprofits identified as needing help with internal operations, like infrastructure and staff development.

Also at last week’s meeting, Urban County members got an update on an annual plan being developed for the U.S. Dept. of Housing & Urban Development (HUD), which provides funding for low-income housing and neighborhood projects. The plan will include a list of proposed projects located within the Urban County area that would be eligible for HUD funding. To gather more input, a needs assessment public hearing is set for the Feb. 22 meetings of both the Ann Arbor city council and the Urban County.

Two people spoke during public commentary, both criticizing Avalon Housing for its handling of two low-income housing projects: 1500 Pauline, and Near North. The nonprofit was defended by Leah Gunn, who chairs the Urban County executive committee – she called Avalon one of the “stars of community development.”

Coordinated Funding Update, Appointments

Mary Jo Callan, head of the county/city of Ann Arbor office of community development (OCD), gave an update on the new coordinated funding approach for local nonprofits. It’s a project that was in the works for well more than a year, and was finally approved by local funders – the city of Ann Arbor, Washtenaw County, the Urban County, Washtenaw United Way and the Ann Arbor Area Community Foundation – late last year.

The idea is for the county’s major local funders of nonprofits to coordinate their efforts, managed by OCD staff and focused on six main areas: housing/homelessness, aging, school-aged youth, children from birth to six, “safety net” health and food/hunger relief. In the past, these five funding entities have provided about $5 million annually for local human services nonprofits. [For additional background, see Chronicle coverage: "Urban County Finalizes Funding Model"]

In an email to The Chronicle, Callan said the amount of total available funding isn’t yet determined. In past years, funding from the five groups has totaled nearly $5 million, but that could be lower this year. Last year, the city of Ann Arbor awarded almost $1.3 million, but at a Jan. 31 working session of the Ann Arbor city council, city staff discussed potential cuts to that amount. Washtenaw County funded $1.1 million to human services last year, while the United Way gave out $2.3 million – though a portion of that went to grants for capacity building and planning/coordination activities, according to Callan. The Urban County provided $300,000 last year to human services nonprofits, using funds from the federal Community Development Block Grant (CDBG) program.

At the Urban County meeting, Callan explained that the funding process is being handled in two phases. The OCD issued a request for qualifications (RFQ) and received 58 responses from nonprofits. The RFQ asked for basic finance and governance documentation, such as audits and bylaws. Based on those materials, seven nonprofits were eliminated from further consideration.

In the next phase, a request for proposals (RFP) – issued on Jan. 28 – will be followed by a mandatory pre-bid meeting on Feb. 4. It’s an online application process, Callan said, and proposals will be due on March 4.

A review committee will evaluate the applications, and ultimately make recommendations for funding. [The boards of each of the funding entities retain final funding decisions, and will vote on allocations from their own pot of funding, based on OCD recommendations.] Four of the funders – Ann Arbor, Washtenaw County, the Urban County and United Way – will each have three representatives on the review committee. At the Jan. 25 Urban County meeting, the group selected its three reps: Barb Fuller, Pittsfield Township’s deputy supervisor; Paul Schreiber, mayor of Ypsilanti; and Margie Teall, an Ann Arbor city councilmember.

Callan said that Ann Arbor’s representatives would be nominated by the city’s housing & human services advisory board. Leah Gunn, a county commissioner who chairs the Urban County executive committee, reported that the board of commissioners planned to appoint three staff members as its representatives. [The next day, on Jan. 26, at the administrative briefing for the Washtenaw County board of commissioners, a preview of the Feb. 2 board agenda included the three nominees for the review committee, who'll need to be appointed by the board: Hazelette Robinson, community relations director for the Washtenaw Community Health Organization; Susan Sweet Scott of the county's Employment Training & Community Services (ETCS); and Michael Smith of the county's veteran affairs office.]

Callan told Urban County members that it’s been illuminating to review the materials provided so far and get a sense of the health of local nonprofits. They divided the RFQ responses into three tiers, she said: 1) those that met all the conditions – things like having a board that actually met, she quipped – and that were approved to move forward; 2) nonprofits that could apply for funding, but with certain conditions; and 3) those that were disqualified because they didn’t meet the basic threshold – for example, not having an audit for the past several years.

The second tier is by far the largest group, Callan said. This group includes nonprofits that have an executive director who hasn’t received a formal evaluation every year, to situations that are much more serious, she said. OCD staff discovered some very significant red flags – in terms of governance and finance issues – at a couple of agencies that have historically been funded every year, Callan said, though she didn’t identify those nonprofits by name. The nonprofits in this group have been notified that they can apply for funding, she said, but can’t move forward until certain issues are addressed.

Through this process, the OCD staff is discovering that some nonprofits have a lot of capacity to provide services, Callan said. Others need help and can be strengthened, while some are really struggling. Now they have a clearer way to measure that, she said. Those nonprofits that need help might be eligible for capacity-building grants, funded by the United Way and the community foundation. At the same time, she said, there are some nonprofits that in the next year or two will need to find a parent agency, or possibly cease to exist.

Callan said they’ll have a better idea of how this will shake out as they move through the coordinated funding process over the next few months. According to a schedule handed out at the meeting, the review committee will be evaluating proposals in March. The Urban County executive committee will vote on human services funding recommendations at its March 22 meeting. A public hearing on the human services recommendations will be held at the Ann Arbor city council’s April 18 meeting, with a vote on those awards taking place on May 2, as part of the city’s 2011-12 budget. The county board of commissioners will vote on the recommendations at their May 4 meeting. Award letters will be sent to recipients on May 23.

Annual Plan Update, Quarterly Project Report

Damon Thompson, OCD’s operations manager, gave an update on a draft of the annual plan that the Urban County must submit to the U.S. Dept. of Housing & Urban Development (HUD) in mid-May. Much of the funding that’s allocated by the Urban County comes from two HUD programs: the HOME Investment Partnerships program and the Community Development Block Grant (CDBG) program.

In addition to getting suggestions from Urban County members for projects to include in the plan, a needs assessment public hearing is set for the Feb. 22 meetings of both the Urban County and the Ann Arbor city council. The public hearings are a forum for residents to come and make requests for projects in their neighborhoods that they feel should be funded in the coming year.

Thompson also reviewed a quarterly project report of HOME and CDBG funding allocated over a three-year period, from July 1, 2009 through June 30, 2012. They are about 17 months into that period, he noted. The quarterly report shows projects that are underway in each Urban County jurisdiction, and their estimated cost. It also shows the percentage of total HOME and CDBG funds that have been allocated in each jurisdiction, compared with a target percentage previously approved by the Urban County. [.pdf file of Urban County quarterly project report]

For example, Ann Arbor is approved to receive 48.22% of all HOME and CDBG funds for this area over that three-year period. To date, the city has received $2.847 million in funding for 31 projects – including nine projects managed by Avalon Housing for nearly $780,000. Ann Arbor has now allocated almost all of the HOME and CDBG funds that it is authorized to receive.

In response to a question about how the percentage-wise approval of funds to each community is determined, Mary Jo Callan explained it’s a HUD formula based on several factors, including the percentage of residents living in poverty and the condition of a jurisdiction’s housing stock.

Public Commentary: Affordable Housing

Two people spoke during the time set aside for citizen participation.

Lily Au noted that she has in the past spoken out against the coordinated funding model. [Over the past several months she has often appeared at the Ann Arbor city council, Washtenaw County board of commissioners and Urban County meetings to speak on this issue.] Now that it’s been approved, she said, it is important to limit the administrative fees, so that more money goes directly to the nonprofits. Au also criticized Avalon Housing for its proposed affordable housing projects at 1500 Pauline and on North Main, known as Near North. [The city's planning commission recently approved a site plan for 1500 Pauline – the project will next be considered by city council; the Near North project received city council approval in September 2009.] Apparently there’s money to build expensive new projects, Au said, but not money to rehab existing properties or for the homeless. Avalon takes “fat” development fees for these projects, she said. “We need to curb this.”

LuAnne Bullington also criticized the Near North project, listing the various government entities that are helping to fund it, including the Michigan State Housing Development Authority and the Ann Arbor Downtown Development Authority. Taxpayers are dumping more than $12 million into the project, she said, yet only 14 of the 38 units will be for affordable housing, she contended. Meanwhile, over 4,500 people in the county are homeless – is this really the best use of our money? she asked.

Public Commentary: Response

Paul Schreiber, Ypsilanti’s mayor and a member of the Urban County executive committee, asked staff members to address the comments by Au and Bullington.

Jennifer L. Hall, housing manager for the office of community development, began by saying that it’s very expensive to bring low-income housing on line, especially rental housing that includes support services, like the kind that Avalon provides. The Near North project is intended to offset the loss of single-room-occupancy (SRO) housing that was lost when the city tore down the old YMCA, she said.

All of the units at Near North will be affordable housing, not just the 14 that Bullington mentioned, Hall said – that’s a requirement of the funders, she said. The units will all be available to residents earning 50% or less of the area’s average median income – though typically, residents earn far less, she said, or have no income at all. When asked by Ann Arbor Township supervisor Mike Moran if there was any distinction related to the 14 units, Hall said that 14 apartments will be set aside for special needs residents, who require an additional layer of support services.

Mary Jo Callan expressed frustration at the public commentary, saying she was disappointed that Au had left the room before hearing a response. [Au later returned – she had apparently left to photocopy some materials that she distributed to people at the meeting.] Callan clarified that her office does not charge the 10-15% administrative fees that Au claimed they took from coordinated funding. Callan said they’ve tried on multiple occasions to talk to Au, but “she doesn’t seem interested in talking or learning the facts.” Callan said she and her staff are willing to talk to anyone who’s interested in facts.

Leah Gunn, a county commissioner who chairs the Urban County executive committee, defended Avalon Housing, calling the organization one of the “stars of community development.” The nonprofit provides housing as well as support services that help people stay in their homes, she said. Noting that the Downtown Development Authority has funding available for affordable housing, Gunn said that as a DDA board member, she was proud to support Avalon.

Next meeting: Tuesday, Feb. 22, 2011 at 1 p.m. at the Washtenaw County Learning Resource Center, 4135 Washtenaw Ave. [confirm date]


  1. By Leah Gunn
    February 2, 2011 at 11:13 am | permalink

    Thank you Mary, for providing the responses to the public criticism of the coordinated funding plan and the Avalon housing projects. The so-called “fat” developer fee that Avalon receives allows them to exist – it takes a long time to see a project through to fruition, and staff need to be paid. They do not earn huge salareis, belive me, and they work very hard to make affordable housing available in our community. Their model of providing support services for their tenants means that people will STAY in housing. As to the new building that Ms. Au criticized, she is not an engineer nor an architect. The new construction is necessary because the old buildings are not worth rehabbing. And who is to say that the poor deserve a lower quality than the rest of us?

    I am extremely proud to have been on the DDA Board when Avalon Housing came to us with its very first project – an apartment building of six units which the DDA donated to Avalon and paid to have moved to First and William. It is still there, providing housing and support services for low income residents of Ann Arbor.

    Many thanks to go to Carol McCabe and Michael Appel and all the Avalon people – staff, vounteers and those who give donations – for making our commuioty a better place to live.

  2. By Lily Au
    February 2, 2011 at 1:53 pm | permalink

    In response to Mary Jo Callen, I’m very willing to listen to your explanation about the current policy. In my memory, I’ve not been approached by you to talk to me. At the City Council, I was approached by the rep from the United Way only.
    I didn’t say that 10-15% from the “Coordinated Funding”. I said that before the allocation, OCD already takes the administrative fee. Please check this link, the central part:
    MSHDA 2010-2011 Allocations. OCD took $14,235
    HUD 2010-2011 Allocations OCD took $ 4,877
    Besides, 20% of the $2.2 million from CDBG
    10% of the $1.68 million from HOME [link]
    though it’s not directly related to Human Service Fund, OCD does takes certain percentages out of the fund reaching through the department.
    My point is we need to avoid double administrative fees from both “OCD” & “United Way”, we know that United Way’s overhead cost was over $2 million (2009 online financial report)
    Miss Collan, I am very willing to listen to you and will attend Feb 22 Urban meeting. I will be there 30 minutes earlier. Would you come earlier to talk? We both work on making a better community.

  3. By Lily Au
    February 2, 2011 at 2:08 pm | permalink

    1. Human Services Funding recommendations are from “Office of Community Development”? How many people from this department will draft the recommendations? OCD receives half the salary from Urban County, does main people at Urban County GREATLY influence the funding recommendations?

    2. Almost $5 million from different entities, where does this money go? Is there an escort account?
    What committee is going to supervise this committee?

  4. By Leah Gunn
    February 2, 2011 at 2:35 pm | permalink

    Human Service Funding recommendations come from the Review Committee appointed by the various bodies. For the Urban County these people were appointed at the meeting as was stated in the article. Therefore, the Urban County membership is the ONLY influence on its part of the funding stream. This has been explained time and time again. For the county, it is three people appointed who recommend to the Board of Commissioners (see above). It is the Commissioners who make the final decision. The City Council also makes the final decision for its share of the funding. So, each elected body makes decisions about where the tax money goes. The Urban County spends 0% for adminstration of Human Services – this was also explained at the meeting.

    The money spent goes directly to those non-profits who have been recommended to receive it. The criteria for both applying and receiving are very stringent, and the recipents are held to a high standard. They all have contracts which they must fulfill, with measurable outcomes. The non-profits are supervised by both the Office of Community Development and the United Way. If they do not perform, funding is not renewed. This has been the method for some time, and it works in a very efficient and cost effective manner, to help those people most in need in our community.

  5. By Lily Au
    February 2, 2011 at 2:41 pm | permalink

    To, Miss Leah Gunn. we’re investing (borrowing- using our next generation’s money) $8 million to demolish 47 and rebuild 32, we further lose 15 units. People will stay in Housing? We’re worsening the homeless situation. Avalon was supposed to rehab them, but they chose to demolish. They used the recommendation of MSHDA as their shield. Please check the link and know more about MSHDA, they even didn’t avoid the practice of ” Conflicts of Interest”
    For Avalon, I don’t blame them, they need “Developer Fee” to survive. However, using big money but lose housing. We need to see the vicious cycle.
    You wrote, “WHO SAYS THE POOR DESERVE A LOWER QUALITY THAN THE REST OF US?” I’m with them all the time. They need propane gas to keep warm in their homeless tents. A guy got too sick & burnt out the propane donated by Zion Church, I drove him to ER last Friday. He(Allon) felt embarrassed to ask again. He took the bus to Ypsilanti to “Octa Plasma Inc” to “Donate Plasma” to get the money ($30-$50) to buy propane to keep warm. Unfortunately, his blood pressure was too high. They didn’t want his blood. Another woman homeless camper(Ashante) has lymphoma cancer, they didn’t want her plasma either. They ended up calling me for help. Miss Leah Gunn, we don’t target on high/low quality, we are struggling to survive. All I said is true, people can contact John Loring from PORT to know the real suffering situation. When there is not enough fund, public money need to be used in a sensible way. Right, I don’t blame to keep a big non-profit survive, I just blame myself not working hard to let people know how the miserable to sell their blood to
    keep survive in the cold.
    There are “Kim” and “Louis” suffering from Bipolar for years, still hiding in the parking strutures…..
    When using housing fund and borrowed future money, we need to be extremely careful. Our children need to repay our debt.

  6. By Lily Au
    February 2, 2011 at 2:53 pm | permalink

    Thanks for your explanation, Miss leah Gunn.

    1. Urban County spends 0% of administration of Human Services Fund. I’m asking how much does “Office of Community Development” take and how much does “United Way” take?

    2. The estimated “$5 million”, where does it go first before allocating to small non-profits?

  7. By Lily Au
    February 2, 2011 at 2:57 pm | permalink

    MSHDA [link]

    Check online, you could read their audit report, some called them “Private Company” Should we solely use their comment to easily demolish??

  8. By Leah Gunn
    February 2, 2011 at 10:26 pm | permalink

    I am glad to hear the PORT is helping the situation. PORT is supported by county taxes, and I am one of the Commissioners who votes for that budget every year. They do a wonderful job against very heavy odds, and I am proud to say that PORT is a part of Washtenaw County government.

  9. By Lily Au
    February 3, 2011 at 9:56 am | permalink

    My comment written Feb 2, 4:17 pm could not come out. It might be related with technical issue of a link. Please check October 2010, chronicle’s article about “Coordinated funding planned”

    “Callon noted that it would be similar to what currently happens. The OCD staff makes recommendations, which are then voted on by the Urban County Executive Committee.”

    The “Reviewing Committee” didn’t appear in October’s article, only popping up in this one. We still have the issue of “Recommendations” are from very limited hands, from OCD people. Can their boss influence the recommendations?

    Does money go escrow account? Or go United Way? United Way’s 990 Form is blurry online. It would be wonderful if they list their “Endowment” items online.

  10. By Scratchingmyhead
    February 9, 2011 at 10:15 am | permalink

    I think Lily AU makes an interesting case as for the allocation process involving in dispensing these funds. The staff who reviews these request are affiliated with their unit of government and in many instances the outcome for funding are predetermined, even though the process is suppose to be competitive. Larger non-profits with extensive political contacts are at an advantage. Organizations generally controlled by minorities (meaning African Americans) do not stand a chance of being funded. Staff is not going to go against the wishes of their employer when it comes time to making recommendations for who receives funding. Ms. Callan has a built in bias toward certain organizations. Keep up the advocacy Ms AU.

  11. By Lily Au
    February 10, 2011 at 11:20 am | permalink

    Thanks, Scratchinghead. My Lord entrusts me this job, and I need to respond HIS call. This proposal passed with so much community concerns, and even former commissioner Mark Quimet is United Way’s vice president. Lots of conflicts of interests here, and a folder was made and sent to our Governor. Let’s pray for justice, compassion, care for the needy communities who are suffering the coldness out there.