As the second tranche of federal American Rescue Plan Act (ARP) funding flows to municipalities around the country, new realities are surfacing about cities’ and counties’ readiness to execute on this unprecedented amount of money.
Not surprisingly, the picture is mixed. Under pressure to expedite funding allocations, local public officials must balance acute, pandemic-related relief needs with strategic, longer-term recovery expenditures. To achieve the latter, they must build internal capacity and strengthen nonprofit partners.
Launched this spring by Brookings Metro in partnership with three communities, the Transforming Cities Lab is helping communities navigate the practical and political challenges of coordinating with nonprofits—offering promising solutions to overcome these challenges and deliver more transformative economic change.
The nonprofit sector is a challenging but essential partner to the public sector
The Transforming Cities Lab is a peer learning project aimed at helping places build civic capacity and infrastructure to maximize use of federal dollars in more strategic, sustainable, and equitable ways. And it has revealed that identifying spending priorities upfront is a necessary but not sufficient component. While a vast majority of local leaders are endeavoring to meet this moment, municipalities—even larger ones—lack the capacity to plan or carry out longer-term strategic investments without nonprofit or other external partners. This challenge is particularly acute in Midwestern legacy cities, where public and nonprofit sectors have been accustomed to operating with an austerity mindset and competing for scarce dollars.
Nonprofit organizations are indispensable partners for the public sector to maximize federal dollars and leverage funds for inclusive, systemic change. Yet, to make the most of today’s historic investment opportunities, cities and nonprofits must overcome two preexisting conditions that could hinder such an approach: functionality and equity.
First, functionality. As an example, workforce training and economic development ecosystems—both essential to inclusive growth—are often highly fragmented and lack basic functionality. This in turn intensifies local government and nonprofit coordination challenges. In places transitioning from older industrial to “new” economies (e.g., Cleveland, Detroit), organizations have been operating on a shoestring budget for decades, and nonprofit ecosystems were not designed to intake large-scale, one-time investments and ensure they have durable positive impact.
Second, equity. Paradoxically, while municipalities need to rely more heavily on nonprofit partners, nonprofits are also …….