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Strengthening Partnerships for Effective Federal Funds Disbursement

New federal money going to repair some residents’ roofs as part of Renew Detroit. Mayor Mike Duggan says the program will kick off phase one with helping Detroiters get new roofs – fulfilling one of the most often heard requests.

By Adam Freed, Rose Gill, and Megan Sheekey

The American Rescue Plan (ARP), along with other federal resources, provides unprecedented opportunities for cities and towns across the country to respond to the pandemic. If leveraged and administered effectively, the $65 billion in emergency federal funding will not only support individuals and families in immediate need but could also help tackle some of our most pressing long-standing challenges, bringing transformative change to our communities.

Over the past several months, mayors have made strong efforts to engage community members and elicit feedback on the distribution of these funds, however, many acknowledge their lack of capacity to rapidly deploy the incoming federal aid. At the same time, many foundations and other entities invested in community development are eager to help local government in these efforts, but coming together as a force can be challenging.

We highlighted five key strategies to strengthen strategic partnerships and leverage federal funding for COVID response and recovery at a recent workshop for city leaders. Hosted by the COVID-19 Federal Assistance e311 Program (a partnership between Bloomberg Philanthropies and the U.S. Conference of Mayors) and Bloomberg Associates, the event brought together cross-sector leaders to discuss structures needed to successfully deploy ARP funds. Panelists included Bruce Katz, Co-Founder of New Localism Associates and Nowak Metro Finance Lab at Drexel University; Faye Nelson, Michigan Director for the W.K. Kellogg Foundation; Nicole Sherard-Freeman, Group Executive of Jobs, Economy & Detroit at Work for the City of Detroit; and Melissa Wilson, Purchasing Agent for the City of Dayton.

Structuring the work

Bruce Katz, Co-Founder of New Localism Associates and Nowak Metro Finance Lab at Drexel University, has been advising cities on the management of ARP funds and acknowledges that building back better and attaining equitable outcomes is going to require doing things a lot differently. Katz stressed the critical need for cities to develop strong organizational structure around the funding: “Ultimately, it’s dependent upon cities to design and deliver transformative initiatives, so part of that is getting organized now, both internally and across sectors. We also know we need intermediaries—institutions with capacity, capital, and community standing.”

Building capacity

Dayton, Ohio established a new stimulus command center to not only coordinate ARP funding efforts and resources within city departments, but also with external partners on short and long-term goals. Melissa Wilson, Purchasing Agent for the City of Dayton, described it as a multi-step approach, noting: “We wanted to bring together all of the key players in our community—such as our nonprofits, hospitals, universities, and others—so they can be represented and have an impact.” This cross-sector collaboration led to the development of committees in areas of focus, including health and wellness, education, and workforce development.

Using ARP funds, Dayton immediately brought on two external consultants through RFPs—a program manager to oversee its command center and ARP funded activities and an auditing and compliance consultant to ensure all requirements and reporting are met.

Establishing priorities through community engagement

In Detroit, Michigan, which is receiving one of the highest allocations of ARP funds in the nation, Mayor Mike Duggan established six priority areas of spending, including increasing public safety, closing the digital divide, and tackling the city’s housing crisis. Following extensive resident feedback (that involved over 60 community meetings) the six categories were transformed into 15 proposed appropriations that were approved by the city council on June 29, 2021 in advance of the budget deadline.

Like Dayton, Detroit needed to build internal capacity to take on this work. Group Executive of Jobs, Economy & Detroit at Work for the City of Detroit Nicole Sherard-Freeman shared, “We knew there was absolutely no way we’re going to be able to attend to the compliance complexities and manage all of the technical and staffing requirements, so we engaged well known national firms to help us with all that, and it’s proven to be a lifesaver already.” The City contracted with four large organizations to assist with managing auditing and compliance, procurement, human resources, and information technology. These firms were paid for with ARP funding to the extent permitted by the Treasury’s guidelines. Detroit is also enhancing its internal capacity by creating new fellowships and internships to assist with ARP program implementation.

Sherard-Freeman also noted the need to build in support mechanisms for grassroots organizations, which often have limited administrative resources to meet funding guidelines and are crucial to the equitable distribution of these funds.

Identifying partners and strengthening collaboration

One of Detroit’s long-time philanthropic partners is the W.K. Kellogg Foundation. The foundation centers racial equity, community engagement and leadership in all of its work, which is done in collaboration with a network of local organizations. Highlighting the importance of collaboration, Michigan Director for the W.K. Kellogg Foundation Faye Nelson said, “Having a partnership with the City of Detroit has been critically important because through our conversations we better understand how we can support our public partners and how we can best lean in.” Kellogg is also part of a collaborative, led by the Council of Michigan Foundations, that has brought together foundations across the state to pool resources in support of local, regional and statewide strategies that inform and shape public funding toward equity centered outcomes.

Nelson added, “Philanthropy wants to be part of this effort to empower communities to make the improvements they know they need. We don’t want to come in and tell communities what they should be doing. We want to listen, to thoughtfully understand what is needed, and connect with our partners to better understand how we can best provide support.”

Refining and innovating

The scale and speed at which ARP funds have been made available is certainly unprecedented and will require new thinking and systems to effectively administer them. As Katz stated, “We’re going to have to experiment, iterate, innovate and then codify solutions as they occur.”

While each city can determine the best uses of their federal aid allocation, success will ultimately lie in their ability to establish strong organizational structure as well as collaborative muscle to bring about meaningful results. Katz added: “It’s got to be a team effort. We’re going to have to collaborate to compete, and we’re still figuring out what those ecosystems look like, but philanthropy is going to be critical along with private capital. We need to come up with more integrated holistic solutions where we add value and community wealth for the long haul.”

The workshop was one of the many resources available to cities across the country through the Bloomberg Philanthropies/US Conference of Mayors COVID-19 Federal Assistance e-311 program.  The e311 program has answered more than 260 questions, which are posted on its online hub, and engaged more than 1,000 city practitioners on a range of topics from how federal aid can be used to support vaccination efforts, to economic assistance to underinvested households and expansion of broadband availability, to measures that help prevent fraud, waste and abuse of federal funds.

A recording of the workshop and related materials can be accessed here.