In a Hail-Mary attempt to protect the “social safety net” of one of the poorest large cities in the country, San Antonio’s City Council is punting plans to take a hard look at the way the city funds local nonprofits.
San Antonio saw a proliferation of nonprofits set up shop during the COVID-19 pandemic to provide services like mental health, housing and nutritional assistance to the community.
As pandemic relief dollars started to dry up, this year city leaders envisioned starting to pare down its support to those groups — until the budget-slashing start to President Donald Trump’s administration threatened to freeze federal grants that many local nonprofits rely on.
Against that backdrop, the City Council agreed Wednesday to put off planned changes, and extend the existing competitive nonprofit grants for at least eight months.
But when the budget-slashing start to President Donald Trump’s administration threatened to freeze federal grants that many local nonprofits rely on, the City Council agreed Wednesday to put off planned changes and extend the existing competitive nonprofit grants for at least eight months.
“Obviously there’s a tremendous amount of impact currently being absorbed by actions at the federal level … particularly in vulnerable communities and cities with a higher proportion of vulnerable communities, like San Antonio,” Mayor Ron Nirenberg said at Wednesday’s council meeting.
“There is no alternative for us other than to ensure that there is an adequate social safety net in this community,” he said. “Otherwise, all other priorities begin to break down.”
Switching course
Just a month ago, the city’s Department of Human Services, which administers the grants to nonprofits, came before the council proposing changes for the coming year’s nonprofit grants, such as adjusting the funding priorities, issuing longer contract terms and raising the minimum grant award, which would mean fewer grants to go around.
The ideas came as many of San Antonio’s nonprofits are now struggling to survive financially post-pandemic, and some in the industry have stated suggesting that consolidation or mergers are needed.
“We were trying to manage expectations and get people accustomed to the idea that there’s going to be budget cuts,” said Councilman Manny Pelaez (D8).
But after the Trump Administration’s attempt to freeze the federal grants nonprofits receive in January sent local agencies into a panic, the political will to make changes at the local level seemed to evaporate.
The White House’s funding freeze was quickly reversed after a judge forced the administration to pause its plan. But City Council members at the Feb. 19 meeting were still rattled enough to question the wisdom of adding new local policy changes to the nonprofits’ stress levels.
Some even called for the city to do more to help nonprofits through tough times, though it’s unclear where the money would come from.
The city funds some nonprofit work through its general operating funds, but in recent years, much of the money the city distributes has also been bolstered by federal dollars.
“From this point on, we still need to move forward as a city,” said Councilwoman Phyllis Viagran (D3). “We cannot do that if we cut this budget. We cannot do this if we don’t look for dollars to put more money in this budget, because we need it right now.”
After a lengthy council discussion, City Manager Erik Walsh sought to reframe the conversation away from a desire to help local nonprofits and back toward an analytical look at how their work aligns with city spending priorities.
“Forget about the agencies for a second,” he said. “Just to lay it out, what do we want to buy? What do we want to supplement in terms of public services?”
While many members agreed with him, so heated was the discussion that city leaders decided to schedule a later meeting so they could spend more time on the issue before making any decisions.
Kicking the can
By Wednesday, city leadership’s vision seemed to have shifted to accommodate the concerns about changes on the federal landscape, including laid-off federal workers who might need the nonprofit services.
“Our delegate agencies are being impacted not just by those layoffs, but also the services that they perform in our community that are quite literally lifelines for thousands of San Antonio families,” Nirenberg said.
The city agreed to separate nonprofit grants into two pools, ones that the city funds directly through the budget to perform a specific service, and ones where nonprofits apply and compete for grants to fulfill a more general service the city wants to promote.
The competitive grants are typically awarded on a two-year funding cycle that would necessitate new contracts later this year, after a competitive bidding process that was expected to take place this March and April.
By extending the existing grants and moving the next application process out an additional eight months, the city will have more time to consider whether the policy changes they had in mind are still the right move, said Human Services Director Melody Woosley.
The city will still audit whether the nonprofits are performing the expected services, as was already planned for this year, and will continue its standard oversight procedures.
“We’re going to extend their contracts but we’re not going to stop monitoring the work they do,” Woolsey said.
