Q&A with Fran Barrett, InterAgency Coordinator for Not-for-Profit Services

February 10, 2015

On Tuesday, Feb. 3, 2015, Adirondack Foundation and the Adirondack Nonprofit Network welcomed Fran Barrett, New York State’s InterAgency Coordinator for Not-for-Profit Services, to the North Country.

Barrett visited Lake Placid to learn about the nonprofit sector in the Adirondack region and to discuss her role in helping nonprofits and state government work together more effectively and more efficiently.

Barrett’s office helps nonprofits navigate the many layers of state government, and serves as the intermediary between the Cuomo administration and the nonprofit sector. She emphasized that Cuomo is committed to using the sector to build community and delivering payment, on time, to nonprofits that contract with the state to provide services. She also encouraged nonprofits to purse creative cross-sector partnerships when seeking state funding.

During a visit to Adirondack Foundation’s office at Heaven Hill Farm, Barrett sat down with the foundation’s communications manager, Chris Morris, for a wide-ranging discussion about the role of her office and the nonprofit sector as a whole. (Note: The following interview has been edited for length.)

For video from Chris's interview, click here.

Chris Morris: What does it mean to be the InterAgency Coordinator for Not-for-Profit Services in New York State? What does the job entail?

Fran Barrett: The title is a mouthful to say, but it really does describe the job. It is, in fact, looking across all state agencies, and looking at where the agencies are sub-contracting out a significant portion of the work that they do to the nonprofit sector. And where that is happening, it makes sense for there to be a common perspective on what the nature of those interactions should be. In other words: what standards do we hold for the nonprofits that we go into business with? Also: what systems and structures do we have that can be streamlined and simplified and less redundant for the nonprofit sector? What role can technology play in all of that? And, most important to the governor right now, is the idea that we are paying nonprofits as promptly as possible.

Right now, because of the myriad complexities of the systems, it takes a long time for the nonprofits to get paid. Cash flow can become a real problem, so at the very least, we want to be able to pay the nonprofits promptly when they put their vouchers in. The idea of the inter-agency coordination is to look at where there are opportunities, how one agency that is doing a great job can influence other agencies, how an agency that isn’t doing such a great job can realize it and change and improve their systems.

We also want to give the nonprofits a point of access in government. Some people say there are 60,000 nonprofits in New York State—I can’t be the point of access for all of them, but we have a team of about eight people, and we field calls and questions. As reform comes into focus from the Nonprofit Revitalization Act, from our own pre-qualification and Grants Gateway system—even from the Opportunity Initiatives that are in the State of the State—we have to proactively communicate with the nonprofit sector. We have contracts with roughly 5,000 nonprofits right now, but that’s not all of the nonprofits that interact with the state. A lot of nonprofits interact with government—in schools, in hospitals, in senior centers, in arts centers—with no government money at all. We still want them to know what the government is doing, we want them to come in with ideas and strategies and that kind of thing.

Also, nonprofits are the best possible source of information on good policy, because they are sort of the troops on the ground, if you will—they really know what would make a difference in terms of cutting down on homelessness or helping people find jobs. The Inter-Agency Coordinator role gives us the ability to communicate out and to hear back.

CM: What is the Opportunity Agenda?

FB: The governor’s State of the State, for the first time, really put a lot of emphasis on the nonprofit sector and recognizing that the nonprofit sector is the best tool that we have right now to sort of bring programs and services and strategies that can work to our communities. In it, the governor had a multi-point program—one point was employment as the way to create the greatest opportunities. So there is an employment “strike force” in The Bronx that has had a lot of success helping people find actual jobs. Lots of times, the job training stuff just trains people but doesn’t connect them to a job or an opportunity. We want to close that gap. Cuomo is going to expand that strike force program and we want to go out to the top 10 highest areas of unemployment with it. In terms of employment, we also want to double the tax credit for companies that employ young people that would otherwise not be getting the jobs, and we have to incentivize business more and more to come to the table. Doubling the tax credit is an extremely progressive and exciting idea—we think it’s going to yield great results.

The other thing we’ve observed about the nonprofit sector, and we’ve heard this from nonprofits directly, is the issue of capital expenses. If you have money and a line item budget, it hardly ever has capital expenses in it. Your nonprofit might say, “Well, gee, we really have to replace these computers, but there’s no money for it.” It constantly gets deferred, and yet the state is expecting the nonprofits to use the Grants Gateway, to be technologically functioning at a high level. So we thought we should really make a commitment to nonprofit infrastructure. So we set aside $50 million, not to renovate entire buildings and not for capital campaigns, but basically for if there’s something you as a nonprofit need. We’ve limited this to nonprofits that already have state contracts because we really want to do this to improve service delivery. We wanted to do it with people who we already have business with. We’re also looking at direct service organizations—as opposed to advocacy organizations or capacity building organizations. If we’re going to have an impact with this we wanted to have it immediately on people in need. So you have to be able to make the case that this is going to actually improve your service delivery.

One thing we’re discussing a lot this year is the hunger problem. It’s really a silent problem in a lot of communities. The governor appointed an anti-hunger task force that I was able to work with. The task force came up with a set of recommendations for improving a number of things, but there was one fundamental thing that I think is of great interest to the Adirondack North Country. We were very focused on ways in which we can get locally grown food into places like schools, hospitals, and other institutions. It makes no sense that these places get grapes from California. Kids should be eating local food, they should understand where that food comes from, there should be lessons attached to it.

We’ve also proposed putting some money on the table to help nonprofits with the administrative work attached to some state programs. For example, some nonprofits have access to funding to let them serve dinner at after school programs, but don’t take advantage because of the administrative work. The governor’s Opportunity Agenda proposes to set aside $250,000 for this.

Another issue for us is: we have a lot of immigrants throughout the state, and more and more are moving upstate. At the Department of State, we have the Office for New Americans, which tries to pay particular attention to nonprofits working in the immigrant community. There’s $3 million in the Opportunity Agenda for that work. And there’s a lot of money invested in homeless services and homeless programming.

We are also doing a program called the Office of Community Living, which has to do with this notion that the institutionalized disabled are moving out of large institutions and into smaller, community based settings. Our office will pay close attention to that.

The governor also announced, as part of the Opportunity Agenda, the faith-based initiative, and that initiative will be looking to tap into the whole network of faith-based organizations that are out there, many of which are nonprofits themselves, so there will be overlap between that initiative and my office.

CM: Can you elaborate on how the funding from the Opportunity Agenda will reach the organizations and entities that will carry out the work?

FB: Typically what happens is a state agency issues a request for proposals, and then nonprofits will see that RFP and apply. Then, you respond to the RFP, which details everything that you have to do. Then the applications are scored, and the organizations that get the highest scores win. One of the reasons I’m happy to be in the North Country is I want to encourage your nonprofits to apply for state contracts, even if you don’t get it the first time—get the hang of it, get into the game. That’s really important.

CM: Almost two years ago, we changed our name from Adirondack Community Trust to Adirondack Foundation. To do that, we had to go through the Department of State—it was a tricky process, but one we were able to navigate successfully, in part because we had some very knowledgeable board members who knew what had to be done. In speaking with you now, it occurs to me that we could have contacted your office for guidance—is that something your staff can help with? The day-to-day challenges that nonprofits deal with?

FB: At this point, we take all comers. If someone has a problem with a contract, if someone doesn’t know how to do something, if someone needs to hunt down a document—if I can figure out, from the inside, who would know this, I can at least connect you to the right person. By this summer, we’ll have our website up and running; that will take up a bulk of the work, because within the website, we’ll have the capacity to take questions and answer them in an orderly way.

CM: What is your take on the Nonprofit Revitalization Act?

FB: In general, this law does some things that woefully needed attention. The incorporation process was more cumbersome than it need be and somewhat outdated. There was actually a regulation that said you had to everything in person or on paper—not online. That got cleaned up. There used to be types of nonprofits—A, B, C, and D. When you applied for nonprofit status, you applied for one of those categories. That’s been cut down to just two. The Nonprofit Revitalization Act also increased the threshold for an audit. Prior to the law, you had to have an audit if you had more than $250,000. Now it’s $500,000. By 2021, that threshold will be $1 million. We’re increasing the leeway that nonprofits have to operate without the kinds of restrictions that have traditionally been imposed upon them.

The law also streamlines corporate approvals for real estate transactions and permits other key actions by board members, rather than the whole board. It imposes additional board or audit committee oversight responsibilities on nonprofits that are required to file and annualized audit. It also looks at one of the major concerns, which is conflict of interest. And it prohibits an employee from serving as chair of a board. The law also requires a whistle-blower policy for nonprofits with more than 20 employees. And in general, it enhances some of the powers of the state’s Attorney General.

This law signals a major shift: it’s saying to the nonprofit sector, “We’re going to make it easier for you to deal with the state—you’re right, sometimes you have too many regulations. But on the other hand, we’re raising our expectations of the sector.”

CM: Statewide, what are the big challenges that nonprofits are grappling with?

FB: What most people don’t get is that most nonprofits are small. If you only read the big newspapers, you’re only hearing about the giant nonprofits. The truth is, the average nonprofit has a budget under $2 million—by my standard, that’s about 20 to 30 people. You’re kind of a small company, so leadership issues are tough. You go from being this impassioned advocate who formed something, to being a boss. That happens when the organization reaches somewhere around $750,000—you then begin to have to differentiate functions. You can’t just be a committee of the whole. You have to have someone working on fundraising, someone on communications, and so on. It’s like a rite of passage, but it never gets acknowledged. Being a boss for people who don’t necessarily aspire to be a manager or boss or decider—that’s a challenge for the sector.

The other issue is, obviously, fundraising. The inclination is to let the funders hear what they want. It takes a lot of courage to have an honest conversation with a funder. That relationship—that can be really convoluted. Your investors, your donors, are giving you advice about how you should do something. You’re free to ignore it, but you’re not stupid. Lots of times they’re right—sometimes they’re not. The challenge is: how do you integrate it into decision making?

The third thing that all nonprofits struggle with is boards. How do you have a high functioning board? How do you have an effective board? How do you have an honest relationship with the board? How does the board operate at its own maximum ability?

 I’ve been working in the nonprofit sector for years. These things are something that nonprofits struggle with across the board.

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