April 6, 2026 www.paloalto.gov
STUDY SESSION:
Nonprofit Partnership
Workplan Phase I Process
• Nonprofit Partnership Workplan Phase I Funding Requests ➢TONIGHT: Discuss and provide feedback on consideration to suspend Phase I in FY 2027 due to projected fiscal deficit. Discuss purpose and potential improvements if continued.
• Nonprofit Lease Agreements
• Nonprofit Multi-Year Service Agreements
• Comprehensive review of all grant programs including Human Services Resource Allocation Process (HSRAP) and Community Development Block Grants (CDBG) 2 Nonprofit Workplan Major Areas of Work
• Intended to provide the City Council with a fair and
equitable way to evaluate nonprofit funding
requests during the Budget Adoption process; it was
not intended to represent a new grant program.
• All 501(c)(3) nonprofits were qualified to apply, no
exclusions.
3 Nonprofit Workplan Phase I Pilot
• Pilot caused confusion among nonprofits on who should apply and whether to seek funding, especially for nonprofits with multi-year or ongoing service agreements. • 16 nonprofits were awarded one-time Phase I grants, totaling $506,646 4 Nonprofit Workplan Phase I Process Improvements
• Frame the Phase I process funding as
discretionary and non-guaranteed
• Clarify eligibility for recipients of multi-year
contracts or other City grant programs
(i.e., HSRAP or CDBG)
• Funding priorities (replace relationship to
Council Priorities with other priority or
community needs criteria)
• Improve clarity between Council Committees;
Finance set funding available and Policy &
Services reviews applications/recommends
awards
• Improve application evaluation process by
categorizing nonprofit services to clarify
service alignment and consider Human
Relations Commission (HRC) review
• Streamline redundant or low value
applications questions
• Early communication and engagement with
nonprofits on application expectations
• Funding disclosure, structure grant to
complement versus fully cover program costs
• Adjust application timeframe to allow for
nonprofit interviews
No proposed FY 2027 reductions to HSRAP , Emerging Needs Fund, or ongoing service contracts. No anticipated reductions to CDBG fund allocations. • Projected $14.9 million General Fund deficit
• Balancing strategies include exploring new revenue sources, $7 million in General Fund reductions, Capital Improvement Fund reductions, pension cost contributions, use of stabilization reserves.
5 FY 2027 Financial Outlook
Fiscal Year HSRAP CDBG Phase I Operating
Services Total
FY 2026 911,431 154,812 506,646 5,163,723 $6,736,612
FY 2027 942,971 (est.) 152,000 TBD 5,476,223 $6,571,194 6 FY 2026 Phase I Awards of $506,646 to 16 Organizations Line
# Organization FY 2026 $ Purpose
3 Ada's Café* 10,000 Community events
12 Children's Health
Council*
10,000 Youth mental health services
15 Environmental
Volunteers*
10,780 Ambassador Program at Foothills
Nature Preserve. Turn to op. srv
agreement in FY 2027.
22 JobTrain 45,000 Workforce development
26 Karat School Project* 20,000 Improved engagement and connection to Safe Parking and housing
enrollment programs
31 LifeMoves* 48,366 Meals and food resources for
individuals experiencing homelessness
33 Magical Bridge
Foundation
150,000 Adaptive programming for people of
all abilities.
35 Momentum for Health 15,000 Cold season protection and hygiene kits to individuals experiencing
homelessness
N/A Musical Memories
Foundation, Inc
5,000 Senior services, provision of music at
residences, senior centers and events
* Organization also expected to receive funds via HSRAP, CDBG, and/or operating service agreement Line
# Organization FY 2026 $ Purpose
37 Neighbors Abroad* 17,500 Ongoing services for the City’s efforts with Sister Cities, Sibling City, and
Friendship Cit(ies). Add to op. srv
agreement in FY 2027.
41 Palo Alto Rec
Foundation (Cal Ave)
40,000 April 2026 to September 2026
monthly activations on California Ave
to support business vibrancy
N/A Palo Alto Special
Education PTA
5,000 Training for mentors and for the
buddy program
45 Pathwise (Formerly
DreamCatchers)*
15,000 Tutor training and mentorship and
parent engagement
47 Peninsula Healthcare
Connection*
20,000 Access to trauma-informed
healthcare for marginalized
populations including Health and
Housing Services
58 UNAFF 45,000 Film festival focused on human rights
and year-round screenings and panels
62 Youth Community
Service*
50,000 Funding for the Youth Connectedness
Initiative. Turn to op. srv agreement in
FY 2027.
7 Council Discussion
Discuss and provide feedback on
• Given the City's FY 2027 projected $14.9 million deficit and planned General Fund reductions, staff recommends that Council consider suspending the Nonprofit Workplan Phase I pilot and solicitation in FY 2027 and consider returning in FY 2028 • The Nonprofit Partnership Workplan Phase I – purpose, improvements, & refinements, if continued
Lupita Alamos, Assistant to the City Manager
[email protected]
April 6, 2026