Economic difficulty and political philosophy are forcing Gilbert to rethink its relationship with East Valley nonprofits, some of which have received financial support from the town for years.
The Town Council voted Tuesday night to cut funding to local agencies such as the Boys and Girls Club and Gilbert’s senior center by 25 percent from the current year’s levels, leaving about $435,500 to be divided among the applicants to the town’s annual “outside agencies” grant process.
But the council also agreed to spend time during its Jan. 23 quarterly retreat to set up the framework for a new entity intended to raise the $109,000 the council had just eliminated from the agency budgets — and eventually get Gilbert out of the philanthropic game altogether.
Councilwoman Jenn Daniels said she had done some research into how other cities handle contributions to social service agencies that either operate within their boundaries or draw from them for their client base. She said she had been looking closely at the Tempe Community Council’s model of setting up a separate foundation for contributions but did not favor Gilbert investing a lot of taxpayer money into that foundation.
“The ultimate goal is that the citizens in this community have an ability to contribute funds and know those dollars are staying right here in Gilbert and at some point in time — I’m not saying now, I’m not saying next year — have the ability to replace the funding that the town now provides through taxpayer money in the general fund,” she said.
Mayor John Lewis noted during the meeting that some have taken exception to the town using tax money to make donations.
“Many residents have come up at Town Council meetings and said, ‘We want the ability to give and not have our taxpayer money given for us,’” he said.
He also said he wanted to build on the town’s new Neighbor to Neighbor program, in which utility customers can tack some money onto their bills to be set aside for local nonprofits, similar to what’s already done in Mesa, Chandler and other cities.
The program was launched last May, and by the end of 2009 it had raised $5,540.62 from 300 donors, according to Carl Morgan, Gilbert’s community development specialist.
For each of the last five years the town has spent between $1 million and $2 million on grants for projects managed by nonprofit agencies. This is a combination of federal money passed down through the state to the municipal level, mostly for housing projects, and the general fund generated from sales tax and other local sources and given to social service agencies. This figure has hovered a bit above $500,000 for the last four years.
The largest recipient has been the Boys and Girls Club’s Gilbert branch, which has gotten $125,000 a year over the last five years.
Boys and Girls Club branch executive Mark Clavell left Tuesday’s meeting a little unsure of the ramifications of the vote for the club, which serves 2,200 school-age youth in town.
He said he’s familiar with the Tempe Community Council model and thinks it works well in that city. He realizes the Gilbert council isn’t envisioning a large financial commitment by the town to his or other agencies, but he hopes there will continue to be some kind of partnership with officials who were instrumental in bringing the club to town 18 years ago and funding its current building, which opened in 2003.
“I’m pretty sure they would help because they have the connections, but I can’t comment on something I don’t know about,” he said.
Daniels said on Wednesday that she’s had some initial conversations with leaders of local charities about the town possibly forming its own 501(c)(3) group, which would be a tax-exempt organization.
“I know there was some concern they were going to end up competing with any sort of (nonprofit agency) that was formed for charitable dollars, but we’re hoping that’s not the case. That’s certainly not the intention,” she said.
Lewis said Wednesday that momentum toward creating a new nonprofit agency had grown since the meeting the night before, as he, Daniels and Councilman Dave Crozier had further conversations about the idea. The public could be invited to speak on the matter as soon as the next regular council meeting Jan. 26.
He added that he’d like to consider taking another look at the Neighbor to Neighbor program, which is different from a similar program in Chandler in that residents must file a form with the town in order to participate.
In Chandler and some other cities, a $1 donation is added to each bill’s total and the customer is given a chance to opt out. Daniels said during the meeting that she is wary of this method because it could appear that the town was trying to “sneak it in.”
Lewis said doing it this way could bring in more money, and Chandler customers appear not to have a problem with receiving their bills this way.