Public funds dwindle, putting squeeze on Western Pa.’s foundation resources
By Bill Zlatos
Published: Saturday, August 25, 2012, 8:38 p.m.
Updated: Monday, August 27, 2012
Whether getting the fountain at Point State Park to spout again or opening the sun-dappled Aspinwall Marina to the public, some jobs once handled by government fall on the shoulders of nonprofit groups.
The downturn in the economy squeezed governments at all levels, nonprofit leaders say. But some foundations facing financial strain are re-evaluating how much cash they dole out for public projects.
The Colcom Foundation helped pay for repairs to the iconic fountain at The Point. Friends of the Riverfront paid off a $500,000 loan from a fund begun by Colcom and run by the Western Pennsylvania Conservancy to buy the private marina. Atlanta-based Home Depot Foundation gave $174,000 to beautify Pittsburgh neighborhoods.
“It doesn't go without being noticed that this has historically fallen within the realm of government but the sad reality is it's not being done. So if we are to maintain these places that are worthy of our affection, somebody has to step up to the plate to do it,” said John Rohe, vice president of philanthropy at Colcom Foundation.
The Heinz Endowments board will meet in October and its president, Robert Vagt, said it must consider whether it can address issues as deeply and as broadly while government partners reduce their share. The foundation gives about $65 million a year for arts and culture, children and families, communities and economic development, education, and the environment.
“There was no ‘gotcha moment,' in terms of a particular grant, but it is clear that going back to the recession, the mood of the country was then that government funding had to be reduced significantly,” Vagt said. “In recent years, there has not been the political will to restore much of that and clearly, the loss is at such a high level that foundations cannot begin to supplement it.”
Foundations assisting governments is part of a national trend that began several years ago, when municipalities tapped organizations to help manage federal stimulus money, said Stephanie Powers, director of public philanthropic partnerships for the Council on Foundations in Washington.
Cities, such as Denver, Los Angeles, Philadelphia and New Orleans, established offices to form such partnerships, she said.
In Pittsburgh, foundations in 2004 began contributing millions of dollars to the city budget in lieu of tax payments. The 102 nonprofit groups formed Pittsburgh Public Service Fund, pledging $13.5 million to the city over three years. The group made its first payment in 2005. The city expects it to give at least $2.6 million this year and $2.6 million in 2013, though the nonprofits haven't agreed.
Government money drove Pittsburgh's renaissance, said Arthur Ziegler, president of Pittsburgh History & Landmarks Foundation. Now, government and foundations work together, and foundations help supply the money.
He cited Market and Mellon squares as examples of renovation projects that probably would not have happened without foundation money.
The Colcom Foundation, the Richard K. Mellon Foundation, the Hillman Foundation and The Heinz Endowments contributed to the Mellon Square renovation, said Ida D'Errico with Pittsburgh Downtown Partnership.
Station Square, the Market at Fifth and historic preservation in Wilkinsburg would not have occurred without front-end capital granted by Dick Scaife, Ziegler said. Scaife's Allegheny Foundation awards grants in Western Pennsylvania mostly for historic preservation, civic development and education. Scaife is the publisher of the Tribune-Review.
“At Station Square, there was no city, county or state money,” Ziegler said. “There was only $900,000 in federal grants. There was a federal low-interest loan that we paid back early.”
History & Landmarks now is involved with a $4 million historic preservation of seven buildings along Wood Street and Fifth Avenue.
“That's a terrific partnership of our organization, the mayor's office, the (Urban Redevelopment Authority) and the governor's office. I think that particular partnership is unique in any city of the country. ... We are working together, saving the buildings, yet providing space for new businesses in (settings) that are architecturally significant,” Ziegler said.
City officials use a team approach to connect with foundations, rather than designate one person, said Marissa Doyle, spokeswoman for Mayor Luke Ravenstahl.
“We're always trying to keep costs low with city government,” Doyle said.
Beyond the status quo
Grant Oliphant, president and CEO of The Pittsburgh Foundation, said money from foundations pales to what government has. He said the federal budget for human services was $76.4 billion in 2011; foundations gave a total of $41 billion in all areas that year.
“Public budgets tend to be invested heavily in the status quo,” he said. “Our grants, by and large, are designed to help these entities do what they couldn't do on their own.”
Bloomberg Philanthropies and Rockefeller Foundation gave the city of Pittsburgh a two-year grant of $200,000 to hire someone to coordinate volunteer efforts involving city government. That indicates foundations are giving money not just for adding or improving amenities, but for programming, said Ravenstahl's press secretary Joanna Doven.
Doven cited more than $1.2 million awarded, including Home Depot Foundation's contribution to neighborhoods and another $500,000 from Home Depot to weatherize the homes of senior citizens, disabled people and veterans.
In Aspinwall, borough Manager Edward Warchol said the $2.3 million sale price of the Aspinwall Marina exceeded the town's annual budget of about $2 million.
“That's a lot for a borough to take on,” he said.
Colcom, the conservancy and Friends of the Riverfront entered the picture.
“There was a likelihood that it was going to become a parking lot,” said Jane Menchyk, land conservation specialist for the conservancy.
Pittsburgh Public Schools Superintendent Linda Lane laughs at the notion of reforming schools without the help of foundations.
“The school reform effort without it would be minimal,” she said.
For two years, federal stimulus money supported the Summer Dreamers Academy, a program that helped kids with reading and math while offering fun programs such as fencing and judo. The money is gone. The Wallace and Walmart foundations and the Fund for Excellence filled the gap, but the program serves fewer students.
In 2006, The Heinz Endowments and the Pittsburgh, Grable, Buhl, Benedum and Jewish Health Care foundations established The Fund for Excellence in city schools. Since then, the school district has spent about $17 million from the fund on teacher training and programs to help schools excel. The fund holds $2.8 million for future grants.
The district won a $40 million grant, its largest, from the Bill and Melinda Gates Foundation.
The Heinz Endowments awarded $800,000 to KaBOOM!, a nonprofit group in Washington, to build public playgrounds in distressed areas, including some in the North Side, the Hill District and Braddock, where Heritage Community Initiatives consulted with borough officials when building the playground two years ago.
In April, Heritage received $50,000 from The Pittsburgh Foundation to examine expanding shuttle service to replace Port Authority service to the Mon Valley.
“Are we filling the gap? Absolutely,” said Heritage CEO Michele Atkins. “Should we be filling the gap? No. But who's going to take care of these people while our leaders are having the big debate?”
Bill Zlatos is a staff writer for Trib Total Media. He can be reached at 412-320-7828 or firstname.lastname@example.org.
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