Mayor Justin Bibb is cautioning local nonprofits to pull back on spending as the city waits for news about the federal funding the groups rely on to serve Cleveland neighborhoods.
The city has not yet heard official word on how much money it will receive from the federal Community Development Block Grant (CDBG) program. Nonprofit leaders say a lapse in federal dollars from City Hall could mean cuts in staff.
The federal government will announce its allocation amounts by May 14, a U.S. Department of Housing and Urban Development spokesperson told Signal Cleveland in an email. The spending bill signed by President Donald Trump last month slates $3.4 billion for HUD’s community development fund.
In an April 8 letter, the mayor advised nonprofits that use the block grant dollars not to spend more than their current city contracts allow, nor to take on new responsibilities under the assumption that federal dollars would flow as usual. The letter also bore the signature of Community Development Director Alyssa Hernandez.
“While our neighborhoods have benefitted from decades of stable support, we now face an uncertain future,” the letter read. “Funding may be reduced, subject to new restrictions, or delayed—whether temporarily or for the long term.”
Cleveland received $28.3 million from HUD last year, including almost $20 million in CDBG funds. The city sends $8 million of that to nonprofits known as community development corporations, or CDCs. They use the money for home repairs, business assistance and other neighborhood projects. Often, the dollars pay for staff at the nonprofits.
Bibb laid the blame for the uncertainty on the Trump administration, which has been cutting staff and pulling grants across the federal government.
“The Trump administration’s policies have created chaos across the country and weakened the social safety net,” the letter read, “and this, not any policy from the city or other organization, has put us in the challenging place we find ourselves in.”
Community development corporations prepare for ripple effects
Roshawn Sample, who leads the nonprofit NuPoint in the Union-Miles and Mt. Pleasant neighborhoods, described her organization as “operating in an unknown.”
NuPoint receives revenue besides block grant dollars, she wrote in an email. But without the federal money, her organization wouldn’t be able to maintain a staff of 12 who provide home repair, workforce development and other services to two neighborhoods.
Sample laid out the calculus this way: “no staff, no program.”
On Cleveland’s far West Side, the nonprofit West Park Kamm’s Neighborhood Development uses block grant dollars to help seniors with home repairs and to guide businesses through the City Hall zoning process, according to Executive Director David Robinson.
The money contributes to the paychecks of five out of the seven staff members, he said. That means that cuts in Cleveland’s block grant dollars, if they occurred, could have ripple effects across the small organization.
“I think every CDC is going to have to think about layoffs,” Robinson said.
With fewer staff, the nonprofit could have to cancel even neighborhood programs that don’t receive CDBG dollars, such as next year’s Kamm’s Corner farmers market, he said.
Like other community development corporations, Robinson’s organization will see its current contract with City Hall expire at the end of June. Although West Park Kamm’s can survive 2025 without block grant money, a cut would force leadership to decide whether to tap the nonprofit’s reserves, he said.
The nonprofit must decide what it is willing to spend with the future unknown, Robinson said. He pointed to Trump’s plans to dismantle the U.S. Department of Education as one cause of the worry about federal aid shrinking.
“Of course we can only let our imaginations run wild based off of what’s happening in other departments, and I’m sure that’s impacting a lot of the fear that we have,” he said.
Federal block grant money a staple for Cleveland nonprofits
Tania Menesse, the CEO and president of the nonprofit Cleveland Neighborhood Progress, said that nonprofits are used to fronting their costs while negotiating new contracts with City Hall for federal dollars. But they can’t hold out forever, she said.
“They don’t have the cash flow to keep their doors open indeterminately, because the city is, for most of them, the largest funder,” she said in a phone interview. “And these are small, neighborhood-based organizations that are already carrying risk that is generally pretty untenable.”
Without federal money, 12 of the city’s 18 community development corporations would be unable to deliver services by the Thanksgiving and Christmas holidays, she said.
While it’s not yet known how much money is headed Cleveland’s way, Menesse said City Hall had cause to worry.
“This is not a federal government that any of us recognize,” she said.
Read the city’s letter below: