Money will soon flow to three local nonprofits that had funding allocated to them in this year’s city budget — but to date, haven’t received any of it.
It’s unlikely they’ll ever see those city general fund dollars; instead the nonprofits will soon sign contracts to get reimbursed for operational expenses from the city’s dwindling pot of federal pandemic-era relief aid.
These organizations, which have been tasked with the job of economic development for local small businesses in historically disadvantaged areas of San Antonio, spent the last several years working frantically to help companies hammered by the pandemic, inflation and construction woes, often while facing leadership challenges of their own.
Now, after months of delay, Prosper West, Southside First Economic Development Council and San Antonio for Growth on the East Side, or SAGE, will be eligible for up to $260,000 in funding through the end of next year.
And for the first time, three other local nonprofits, which have not gotten city funding to cover operations in the past, will also be eligible for funding to do similar work: Maestro Entrepreneur Center, Culturingua and American Indians of Texas at the Spanish Colonial Missions.
All six are also collectively getting additional behind-the-scenes help, via the BDO Alliance — BDO stands for business development organization — a networking group with the goal of strengthening and expanding what has been a somewhat fractured small business ecosystem in San Antonio.
While the funding will come from the city’s remaining federal pandemic relief dollars, the local chapter of a national nonprofit will be responsible for funding, oversight and development of these organizations.
LISC San Antonio formed the BDO Alliance in 2022, which was a recommendation of the small business ecosystem assessment it did in late 2020.
The funding and the support are “part of a coordinated strategy” to build or rebuild the capacity of these organizations, said Leilah Powell, executive director of LISC San Antonio.
LISC is a national nonprofit that establishes itself in historically disadvantaged communities, then works with existing local organizations — like these six nonprofits — to build their capacity through leadership training, technical assistance and funding.
Through its agreement with the city, LISC San Antonio will disperse roughly $1.5 million in American Rescue Plan Act money to the six organizations. When the money runs out at the end of next year, LISC San Antonio will continue to run the BDO Alliance and will help the nonprofits find other sources of funding, Powell said.
It took longer to develop the contracts than she hoped, Powell said, given the strings attached to spending federal money.
“But now we’ve got the contracts out, and it’s pretty exciting,” she said. “Now we’re in the thick of it.”
Who is getting funded?
The three nonprofits that received direct city support in the past are in a different position than the three that will receive funding for the first time.
Prosper West, Southside First and SAGE work with businesses in defined geographic areas on the West, South and East sides of town, respectively, which have historically experienced disproportional neglect, disinvestment, high poverty and low educational attainment.
Each group has been running on fumes while awaiting money they thought they were getting from the city’s general fund, which was approved as part of the fiscal year 2024 budget last September. Some have had to lay people off and reduce staff hours as the months dragged on without funding.
The city’s Economic Development Department, which held contracts with those three organizations, was audited last year over its agreement with Prosper West. The internal city audit found the department hadn’t been adequately monitoring the contract, and the nonprofit had not properly documented all its processes.
That led the department to review its contracts with SAGE and Southside First as well. Since then, the department has yet to create funding agreements for any of the three. That tension led, in part, to the resignation of Prosper West’s CEO, Ramiro Gonzales, in May.
James Nortey, an Austin attorney who took the helm at SAGE in January, said he’s grateful SAGE will finally be able to get reimbursed for some of its operating costs, but the risk of an organization relying too heavily on a single funding source was made apparent by the delay.
Nortey had to lay off one staff member earlier this year, and has cut hours of others in order to keep them employed.
“We’re already making the pivot to broaden our scope of funders,” he said, especially since it’s unclear whether City Council is still interested in directly supporting the organization once the federal pandemic money runs out.
“I still view the city as an important partner,” he said, “but we need to be looking at having 30 funders, not just two or three.”
New groups eligible
Each of the three nonprofits eligible for reimbursement for operations for the first time has a slightly different focus, but all hope to expand their support of small businesses with the additional funding.
The Maestro Entrepreneur Center is located on the West Side, but it serves businesses across Bexar County. It offers regular workshops on financial literacy topics like access to capital and buying a business, technical assistance applying for grants and a program that helps “second stage” companies, which are slightly more mature than small businesses.
Geremy LandÃn, who has served as Maestro’s executive director for the past year, said he plans to hire an additional staffer who will focus on communications and outreach, with the goal of reaching more small businesses.
Culturinga was founded in 2019 to “cultivate, promote and preserve” Middle Eastern, North African and South Asian cultural, linguistic and artistic heritage in San Antonio.
Located on the city’s Northwest Side, Culturingua offers a variety of programs to meet its mission, including support for small businesses. Partnering with LISC and Kiva, a microloan program, Culturingua helped several businesses get 0% interest loans.
It also recommended that Afghan Village restaurant and market owner Essa Yousafzai participate in the U.S. Chamber of Commerce’s pilot BizConnect program.
Founded 30 years ago, the American Indians of Texas at the Spanish Colonial Missions (AIT-SCM) is the oldest nonprofit of the bunch, but Executive Director Ramon J. Vasquez described it as “the newest of the group” to do economic development work.
“For the past few years we’ve been getting our feet wet,” he said, working with LISC to expand its capacity to help Native American small business owners. “We started to incubate some smaller for-profit businesses, and realized we needed to take it seriously, because they didn’t have access to capital, didn’t have the resources or knowledge” to succeed.
He noted that Bexar County in 2020 saw its Native American population grow by 115%.
The new funding, Vasquez said, will allow an existing employee to pivot full-time to economic development work. “We’re hoping this opportunity will help draw American Indians out, make them more visible.”
