October 28, 2024 www.cityofpaloalto.org
Nonprofit Relationships
Study Session
2 Purpose and Goal of Study Session
That Council provide feedback on the
overall guiding principles and structure
for nonprofit relationships
3 Proposed Sequence of City Non-Profit Partnerships Review • City Goals
• Identification of ResourcesPrinciples
• Individual Council Actions
• Administrative practicesPractices
• Defined Funding Programs
• Administrative Policies
• Communications
Products
4 Nonprofit Relationship Principles
1. Impact oriented focus and accountability
2. Service alignment
3. Fairness and open access
4. Equity and inclusion
5. Flexibility for special circumstances
5 Principle 1: Impact oriented focus and accountability Partnerships will identify intended outcomes and prioritize unmet needs, and incorporate appropriate measures and reporting, while reflecting the nature of the engagements and avoiding unnecessary administrative processes.
Practice Examples:
• City’s engagement on org. and fiscal management
• Risk mitigation through training
• City engagement in nonprofit governance
• Measurable goals and performance measures
• City’s responsibilities are clear and achievable
• Guidelines for underperformance
Product Examples:
• Depending on significance to nonprofit’s budget,
require ongoing annual reporting
• Council liaison assigned to nonprofit governance
where City is a major funder
• Appropriate measurable goals and key
performance indicators for all
• City funding is leveraged and not significant
financial source
6 Principle 2: Service alignment
Programs and services should align with the Council's priorities and identified community needs
Practice Examples:
• Regularly evaluate community needs and
supporting services and providers
• Funding based on alignment with Council
priorities, impact and nonprofit capacity to deliver
services
Product Examples:
• Consider aligning Council priorities, community
surveys and needs assessments prior to making
new funding decisions
7 Principle 3: Fairness and open access
The City will maintain visibility and consistency in its partnership processes, to both the nonprofit community and public at large
Practice Examples:
• Periodically review overall nonprofit funding and
below market leases, as a precursor to new
decisions
• Broadly communicate funding availability
• Financial reporting aligned with goals and
expectations for funding use
• Subsidies consistently applied based on public
benefit
Product Examples:
• Develop publicly available summary and calendar
of funding opportunities
• Annually report overall nonprofit funding and lease
subsidies
• Agreements for ongoing direct funding (non-grant)
will be periodically reviewed to ensure continued
alignment in the context of other available service
providers
8 Principle 4: Equity and inclusion
Resource allocations will consider and prioritize accessibility of the resulting services to all community members, with particular attention to underserved and vulnerable populations
Practice Examples:
• Maintain high standards and transparency in
decision-making and award process
• Where appropriate, engage boards and
commissions
• Consider conflict of interest policies for disclosure of relationships with nonprofit applicants
• Solicit feedback after each funding cycle
Product Examples:
• The HSRAP program will continue the Human
Relations Commission’s role in grant
recommendations to Council
• Consider policy that significant direct funding
decisions be reviewed by applicable board or
commission
9 Principle 5: Flexibility for special circumstances
Council has the discretion to consider special circumstances Practice Examples:
• Identify circumstances and procedures through
which agreements/grants are awarded outside of
the established processes
• Requests that fall outside these circumstances
would require more extensive review
Product Examples:
• Develop a policy for managing one-off requests
• Create a Council emerging needs earmark within
its contingency fund
11 Proposed Engagement Process
Following Council’s initial review and feedback, the City will engage with stakeholders, especially the nonprofit
community. Staff will use nonprofit engagement to inform recommendations that will return to Council
11 That the Council provide feedback on the overall framework for strengthening the City’s practices in nonprofit relationship engagement, funding, support, and evaluation, informed by the 2022 Nonprofit audit
Staff Recommendation
Lupita Alamos, Assistant to the City Manager
Kristen O’Kane, Community Services Director
Lauren Lai, Chief Financial Officer
October 28, 2024