Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at

Sunday, April 26, 2009

Stimulus Caution

With the drying up of donations from individuals, grants from foundations, and contracts from local governments, many smaller, locally-based nonprofits are looking to Washington for funding, hoping to get in on some of the economic stimulus packages as a means of surviving this recession.

While the temptation for "big money" or "easy money" is a terrific lure, and we do need to investigate all potential funding sources for our organizations, I do want to express my concern that you approach with caution.

Consider not only your short-term money needs, but the long-term effect of the funding, and your capacity to take on the project.

Most of these stimulus programs are not designed for grass-roots organizations; they pretty much require large structures, with already large budgets, and the capacity to take on new projects without much additional overhead.

Seriously, if you have an annual budget of only $500,000 you should not be looking at a grant for $300,000/year for only two years, and with only 5% allowed for administration.

First off, you're likely not going to be approved for such a thing, and the time spent pursuing this would be better spent on more realistic prospects. But secondly, if you did get the grant, are you really prepared for such a massive expansion of your program? Can you realistically manage it with what they allow for overhead? And what will you do when the money goes away? That will be quite a shock to your organization on all ends.

Now, that doesn't mean you can't benefit from the stimulus money that's been announced. By partnering with larger organizations as a sub-contractor, you can help them perform the work (keeping your staff employed) without being directly obligated to the Federal government and all the bureaucracy that that entails.

So, do keep your eyes and ears open for these opportunities, but do so with caution, with careful analysis of your own capacity and how the goals of the funds fit with your programs, and with a willingness to be a partner with others in your community.

(Of course, a stimulus bill aimed at "bailing out" small, local nonprofits would be quite welcome as well...)


  1. I agree this message must be a constant reminder to small and mid-sized nonprofit leaders and the ARRA, Recovery Act funding. My own turn on this is "Should You Really Apply for Economic Recovery Grants?"

    If you are considering applying for one or more grants under the Federal economic Recovery Act, this article offers Nonprofit Internal Action Steps to help you decide - yes, no or keep studying and thinking about it - and the clock is ticking. The outline is based on what we know now about the funding, some educated guesses and probabilities, all of which should be monitored.

    My best, Don Griesmann

  2. I could not agree more that a stimulus bill to support small and medium size non profits would be a benefit.

    A $30,000 to $50,000 payment to a small non profit can keep one or two people working. An extra $30,000 can put one more person on the payroll.

    Without such funding, the decline in revenue will put people out of work, and small non profits out of business.