City looks to switch up how it supports nonprofits

Simplified: As the city looks to tighten its belt in the coming years due to declining property tax revenues, one of the possible spots to save is by cutting support for local nonprofits. Along with the cuts, the administration is looking at making the process to get city money more competitive.

Why it matters

This year the city budgeted about $2.6 million supporting the work of organizations like the Bishop Dudley House, Forward Sioux falls, the Helpline Center, the Sioux Falls Arts Council and more, according to a presentation from Finance Director Shawn Pritchett. That's about 0.3% of the city's overall roughly $800 million budget.
As it stands now, the city supports these and other organizations through subsidy agreements, which are awarded annually and approved by the City Council.
- Pritchett told councilors on Tuesday about a proposal to shift those agreements from subsidies to contracts for service – which means the city could hold organizations more accountable for achieving their intended outcomes, as well as create a competitive process for organizations to get city money.
The proposed changes identified three priority areas: at-risk populations; culture, arts and community programming; and economic vitality and growth. Organizations that fall under those priorities would then compete for a recommended total of $1.15 million – though it's worth noting the City Council has final say in approving the city budget.

"Every organization that previously received a subsidy would fit somewhere within this framework going forward," Pritchett said.

Tell me more about the proposed changes

The proposed changes aim to make the process of getting city money more transparent, more competitive and more accountable, Pritchett said.

Councilor Rich Merkouris voiced some support Tuesday for that aspect of the proposal.

"Right now, for example, I think it could have the perception that the loudest voice in the room wins or who you know wins," Merkouris said of the process to get a city subsidy.

If the new proposal moves forward, the request-for-proposals process could provide more clarity for organizations who ask about getting financial support from the city.

Tell me more about priority areas

The three proposed priority areas include:

At-risk populations: This would be funding for organizations that support children and families that have been victims of violence or other crimes; funding for physical and mental health for at-risk folks; and temporary or transitional housing.
- The recommended budget for this segment is $300,000 annually, though Pritchett noted that does not include the city's support of the Children's Home Shelter for Family Safety – funds already allocated in another area.
Culture, arts and community programming: These funds would promote access to arts and culture, support for local artists, programming for city-owned facilities and organizations that complement the goals of the parks department.
- The recommended budget for this segment is $250,000 annually.
Economic vitality and growth: This is all about supporting groups that attract, retain and grow industries that employ a highly skilled workforce. There's also language included about projects that specifically support downtown.
- The recommended budget for this segment is $600,000 annually.

What happens next?

The council will be working through the budgets for various city departments in the coming weeks, and a final budget approval is expected in September.

If these changes are approved, the applications for funding in the three priority areas will open up mid-September with a due date at the end of October.
Then, the applications would move to a selection committee and ultimately to a final vote in front of the City Council before the end of the year.