Don’t Say Earmarks: $1.7B For NPOs From Designated Congressional Spending
Don’t Say Earmarks: $1.7B For NPOs From Designated Congressional Spending

Federal legislators have set aside $1.7 billion in funding for more than 1,700 nonprofit-related projects. The funds are part of the larger Consolidated Appropriations Act, 2022, which designates more than $9 billion for nearly 5,000 projects, which in addition to nonprofits include military, education and state and local government recipients.

While that might seem a significant amount, the funds make up barely 0.6% of the $1.5 trillion spending bill into which they were folded. With this round of appropriations, total funds for both nonprofit and commercial purposes were capped at roughly 1% of the total federal spending.

The legislator-designated funds mark the return of a process formerly known as earmarks. But that term has apparently fallen out of favor, although a replacement has not yet taken root. Within the U.S. House of Representatives, the fund allocations for commercial, government and nonprofit entities are known as Community Project Funding Requests, while in the U.S. Senate they are called Congressionally Directed Spending.

What does go down easier is direct funding to local concerns. Whatever the preferred term, the practice itself has been hailed as bringing back a certain level of transparency to expenditures. The practice of designating funds had been suspended in 2011 amid anti-spending fervor. But the net result was to either cloak and continue the process within the legislative branch, or transfer designation responsibility to the executive branch. One argument for a return to open funding is that it allows legislators to attach their names to palatable programs, such as those sponsored by nonprofits.

Those legislator benefits go hand-in-hand with opportunities for nonprofits. “The problem that earmarks correct is that [without them] Washington D.C. bureaucrats make the decisions about spending going into federal, state and local communities,” said Steve Taylor, the former longtime head of government for United Way Worldwide and current principal at advocacy firm Integer LLC in Washington, D.C.

“Earmarks allow actual representatives from those states to make the decision about where that funding should go,” Taylor continued. “The critical point is that a select few in the nonprofit sector have figured out how to unlock earmarks and get this money, but a larger and more varied segment of nonprofits should be accessing this funding.”

In a statement to The NonProfit Times, House Appropriations Committee Chair Rosa DeLauro (Conn.-03) wrote: “I am proud to have led the way to include Community Project Funding in the 2022 federal funding package. For the first time in more than a decade, we restored Congress’ power to deliver directly to communities across the country. In doing so, I believe we made Congress more responsive to their constituents. By requiring all requests to be posted online and members of Congress to demonstrate community support and certify that they, their spouse, and their immediate family have no financial interest in the projects they request, the House Appropriations Committee expanded beyond the underlying requirements in House Rules to increase transparency and accountability. Additionally, there is a ban on for-profit recipients, a cap on overall funding and Member requests, and rigorous vetting. While it can be significant work for organizations and communities to request projects, it is all done in a very open way to demonstrate trust in how public funds are spent.”

Within the current process, Democratic legislators served up $5 billion in funding to all recipients, nonprofit and otherwise. Republicans steered $3.4 billion to their interests, with just over $600 million considered bipartisan. Republican allocations were more heavily concentrated: Four of the top five amounts allocated were given to entities suggested by retiring Sen. Richard Shelby (R-Ala.), who currently is the vice chairman of the U.S. Senate Committee on Appropriations.

Allocation amounts range from $132.7 million to $4,000. Shelby-sponsored recipients include the top single amount designated – the aforementioned $132.7 million – for Alabama State Port Authority Facilities and Improvements Alabama State Port Authority. Shelby also garnered three of the four next-largest allocations; $100 million for improvements to the Mobile Downtown Airport; $76 million for the University of Alabama at Birmingham Marnix E. Heersink School of Medicine; and $67.3 million for Alabama State Port Authority rail expansion, rehabilitation and modernization efforts. The lone non-Shelby allocation within the top five was given to Senator Lindsey Graham (R-S.C), who garnered more than $121.8 million for a U.S Navy project — an aircraft maintenance hanger.

Democrats did not break into the top allocations list until the sixth-highest amount allocated, with $64.5 million requested by the two Democratic senators from Hawaii (Mazie Hirono and Brian Schatz) for defense-related electrical distribution modernization efforts.

For all this, the largest expenditures went to the usual suspects. Non-military, education, or government-related entities do not crack the list of top funding recipients until the #32 position, with an allocation of just under $27.7 million for the Alaska Native Tribal Health Consortium requested by Senator Lisa Murkowski (R-Alaska).

The Consortium runs the Alaska Native Medical Center, a 173-bed hospital, while also providing disease and injury prevention, health education and rural water and sewer construction across Alaska. According to the Consortium’s most recent Form 990, which covers the year ending Sept. 30, 2020, the organization generated $687.2 million in revenue, including $312.6 million in contributions and grants.

Additional information on how funds for nonprofit and commercial concerns alike were allocated is available here: https://www.gao.gov/products/gao-22-105467