WILMINGTON — A discussion about nonprofit funding was before council for the second time in a month as staff proposed adjustments to one of its grants processes ahead of next year’s budget cycle. One council member suggested The Endowment become the primary source for the grants and allow the city to get back to funding essentials for its residents.
READ MORE: City to shift grant award process, Endowment used as example
ALSO: Endowment CEO talks relationship with local governments, housing and new ‘roadmap’ strategy
At council’s agenda review meeting on Monday, staff recommended the city change its human services grant process starting in fiscal year 2026-2027. The idea includes splitting the grants into two categories: an impact fund to serve a larger transformational project, with remaining money going toward smaller human services grants.
Traditionally, city-funded human services grants have amounted to $10,000 to $50,000 per organization, with no program receiving more than $75,000 in total. Housing and Neighborhood Services Director Rachel Schuler told council staff envisioned smaller grants could allocate a two-year commitment at $20,000 or $25,000 annually for approved organizations, while the impact fund would consist of a two- or four-year commitment of up to $300,000 annually.
Schuler suggested they encourage collaborative projects among nonprofits and said funds may cover capital needs. Other ideas included affordable housing through repairs and rehabilitation, day shelters for people experiencing homelessness, early education and childcare programs, and allowing heirs to invest in aging properties with legal protections.
“I think that’s an excellent idea,” Mayor Bill Saffo said of the latter, citing heir property as one of the biggest issues faced before the council. “Because people have multiple heirs who come in here and want to save the properties, but there are 20 or 30 people part of the ownership and they don’t have the legal means or financial wherewithal to do it. I know we contribute in our budget to Legal Aid and we should take advantage of that and ask for more help from them.”
Refining the grant process to include a larger tier of impact funding, Schuler said, reflects what’s happening in the nonprofit sector currently. She pointed to the United Way Cape Fear and The Endowment’s “Grants Rainbow” tier — consisting of smaller community grants, larger strategic grants and social impact investments — as examples providing a more targeted approach.
Council member Luke Waddell inquired to what degree the city has engaged with The Endowment.
“Has there been any discussion internally, like there has been at New Hanover County, to direct these kind of initiatives to the billion-dollar New Hanover County Endowment and focus our resources, the taxpayer’s resources, over to core services?” he asked. “Or do you need direction from council?”
Deputy City Manager Thom Moton said staff has explored ways to “leverage” the city’s money with The Endowment.
“However, I’ve not been involved in a conversation about completely eliminating the process and diverting or directing individuals to apply to The Endowment,” he clarified to Waddell.
The council member’s suggestion of pushing nonprofit funding to The Endowment reflects fellow Republican Dane Scalise’s suggestion made to county commissioners in May. Commissioner Scalise disapproved of the New Hanover County manager’s suggested 35-cent budget proposed last month and advocated for it to be revenue neutral, noting one cut could come in nonprofit funding, which he thought “should be shifted entirely to The Endowment.”
Last week, New Hanover County Commissioners pulled back $1.6 million in nonagency funding for nonprofits, part of a $36-million reduction in its budget to reach a 30.6-cent tax rate, 1.4 cents off from revenue neutral. It also included a $9.86-million cut in personnel changes, meaning some county staff being let go, as well as removing the $3-million annual workforce housing commitment, $975,000 for six pre-K classrooms, and $875,000 in merit increases for high performing employees. The reductions have received flak from area constituents and Democratic commissioners.
The county’s nonprofit funding cut came the same day The Endowment announced $3.5 million in its latest round of grants, with $1.6 million of it awarded to the county to pick up its rollback. Vice Chair LeAnn Pierce said in Monday’s commissioner meeting the county “went to bat with The Endowment” to carry the nonprofit costs this year. She added commissioners are still deciding “where that needs to go next year.”
However, Wilmington City Council member Kevin Spears told his colleagues at the city’s agenda review on Monday he didn’t agree with the county’s moves and wasn’t interested in following a similar pattern.
Spears wrote to Port City Daily after the meeting:
“I just don’t think the City of Wilmington needs to be mirroring the antics of the NHC commissioners and how they are recklessly disregard[ing] the current well being and future well being of NHC citizens. I’ve heard my counterparts tell our staff to look and see what the county is doing. I prefer to do a better job than what the county’s Big 3 is doing to NHC. I do salute and appreciate the efforts of Commissioners Walker and Zapple because they’re fighting a dauntless battle.”
At the meeting, Spears added The Endowment’s relationship with the city wasn’t as close as with the county. New Hanover commissioners helped lay the groundwork for The Endowment after they approved the $1.5-billion sale of New Hanover Regional Medical Center to Novant in 2021. The Endowment was set up with $1.25 billion, which with accrued interest has ballooned to almost $1.6 million today. To date, The Endowment has issued roughly $125 million to community organizations.
“I think we should set our own precedent,” Spears suggested, rather than “banking on what The Endowment will do.” “Staff should focus on how we take care of our citizens, how we take care of business as the City of Wilmington.”
Council member Charlie Rivenbark — whose brother Bill is the chair of the county commissioners — pointed out the county and city both benefit from The Endowment. He also thought “lines were getting blurred” between what the county and municipalities should be funding, explaining the county has responsibilities as an extension of the state government.
“Health, education, welfare, the courts, the jail,” Rivenbark listed specific to the county, whereas the city covers solid waste, police, fire, planning and zoning. “Now, all of the sudden you go back 20 years and look at the responsibilities we undertook then versus what we are attempting to do now and we’re looking more and more like the county. And The Endowment is not just set up just for the county to dip in — and I don’t think that’s what they’re doing.”
While he called grant money a wonderful asset, Rivenbark found it also tricky. He gave the example of the city receiving a grant years ago to fund eight to 10 police officers which the local municipality then had to figure out how to continue covering once the money went away.
“You live by it and die by it,” Rivenbark said of grant funding. “We have to also be very careful we do provide services we are, by law, required to do and not begin to take on other things. We need to take care of our citizens in our corporate boundaries like we are charged to do and not get so involved with functions not part of our core services.”
Spears countered the government has evolved in the last two decades and therefore may require participation in varied areas not before considered.
Rivenbark also was concerned that if the city was monetarily backing similar nonprofits the county funds, essentially it could leave residents footing the bill twice.
In May, when staff brought up the human services grant changes, Mayor Saffo asked them to research a dollar amount that has funded nonprofits community-wide — including from the state, city, county and Endowment. At that time, Rivenbark also asked for “accountability” in how the funding has proven successful.
Port City Daily asked the city if it had numbers to report back and learned staff is still gathering data to present as part of its end-of-year survey, required of the human services funding. The grant was formerly called the “Public Services Grant” and has provided a boost to various nonprofits — NourishNC, Coastal Horizons, Carousel Center, Domestic Violence Services and Shelter Inc., and Good Shepard Ministries — for more than a decade.
“These local dollars leverage CDBG and HOME funds, offering partnership with community agencies, nonprofits, public institutions, and businesses to assist in carrying out the City’s Strategic Plan,” city spokesperson Lauren Edwards said.
This includes the creation of affordable neighborhoods; sustainable multi-modal transportation network and city infrastructure; safe and healthy communities; business opportunities and cultural vibrance; and achieving organizational excellence within its government.
Target populations for both the impact and human services funds are older adults 55 and up and youth under 24, as well as people facing mental disabilities, domestic or child abuse, housing insecurity and for households that fall below the 80% area median income.
Schuler told council in May changes to the process were prompted by increased interest each application cycle. In the last three budget cycles, applications ticked up from 34 to 46, as many nonprofits reapply for funds annually, though new agencies also continue to add to the list. For instance, in fiscal year 2024-2025, the city saw 19 new organizations apply.
The city’s funding requests escalated from $1.1 million in 2021-2022 to more than $1.6 million this year, with funding gaps going from $525,255 two years ago to almost double at $965,913 last year.
The city has awarded more in grant funding annually — though it slightly fell this year:
- $627,000 in 2021-2022
- $689,000 in 2023-2024
- $721,000 in 2024-2025
- $720,647 in 2025-2026
Staff was presenting criteria for its changes only on Monday; no vote was taken. Schuler suggested council members appoint an ad hoc committee to review applications and recommend funding appropriations when it comes to the new larger impact fund. The committee would interview the applicants and score them on criteria and effect.
Staff from city finance, budget, housing and neighborhood services departments would also provide council feedback for both the impact and human services applications. Though the human services fund would not have an ad hoc committee.
“I think the council ad hoc committee should look at both funds before it comes to council as a whole,” council member Salette Andrews suggested.
Staff’s timeline on changes include updating the grant application next month, followed by promoting workshops to be hosted with nonprofits in August. Applications would open in September and the ad hoc review committee would meet in September before further delving into applications and providing council updates along the way.
The goal is to present the suggested grants to council by next March, ahead of the 2026-2027 budget being firmed up.
Moton said staff will lean on policy guidance from the city council at its first 2026-2027 budget work session to gauge its “appetite” on moving forward.
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