The City of San Antonio is poised to end its direct support of three nonprofits that provide support services to small businesses on the East, South and West sides of town.<\/p>\n
Pitched in the city\u2019s 704-page\u00a0proposed fiscal year 2025 budget<\/a>\u00a0document as a cost savings of $517,000, the change would mean the end of municipal operational support for Prosper West, SAGE and Southside First Economic Development Council.<\/p>\n All three nonprofits have\u00a0faced<\/a>\u00a0leadership changes and other challenges in recent years; struggles that their leaders say have hampered their ability to help small businesses in historically underserved parts of town. Like the businesses they aim to serve, the nonprofits have struggled through the pandemic, inflation and construction woes.<\/strong><\/p>\n In 2023, an\u00a0internal city audit<\/a>\u00a0found that the city\u2019s Economic Development Department had not been adequately monitoring its funding agreement with Prosper West, and the nonprofit had not properly documented all its processes.<\/p>\n That audit was the catalyst behind the city\u2019s decision to hold off on funding all three nonprofits. The CEO of Prosper West resigned earlier this year, citing in part a\u00a0strained relationship<\/a>\u00a0with city officials.<\/p>\n Prosper West is now helmed by an interim CEO, as is Southside First, although Linda Pearson recently laid herself off due to budget constraints. She is now working in a voluntary capacity. SAGE\u2019s latest CEO, James Nortey, began in January; its board recently voted to\u00a0triple its service territory<\/a>.<\/p>\n The city\u2019s decision earlier this year to hold back funding that had been allocated in the 2024 budget further strained the nonprofits, all had to lay off staff to stay afloat.<\/p>\n Earlier this year, the city gave\u00a0$1.5 million to another nonprofit\u00a0<\/strong>to distribute<\/a>\u00a0in lieu of those missing general fund dollars, but delays getting individual contracts in place with the three nonprofits mean\u00a0<\/strong>that to date, that money hasn\u2019t started flowing.<\/p>\n With the city\u2019s proposed 2025 budget and its 2026 plan both showing the $517,000 as cost savings, the shift away from directly funding these organizations, which each serve small businesses within defined geographic boundaries, appears to be permanent.<\/p>\n SAGE\u2019s Nortey has said he\u2019s working to expand the nonprofit\u2019s breadth of funders to adjust for the loss of direct city funding.<\/p>\n But he expressed disappointment in the city\u2019s decision.\u00a0<\/strong>\u201cBudgets are moral documents that reflect values and priorities,\u201d he said, and ending operational support for SAGE \u201ccontinues the tradition of neglect on the Eastside.\u201d<\/p>\n According to the narrative that opens the\u00a0proposed budget document<\/a>\u00a0released by the City\u2019s Manager\u2019s office, the city believes that small business support should not be geographically defined, but instead be \u201cculturally informed and consistent across providers.\u201d<\/p>\n The document also notes that the city \u201cis still being viewed as the \u2018first dollar in’\u201d by the nonprofits, \u201cbut could leverage greater outcomes when viewed as \u2018last dollar in.’\u201d<\/p>\n That appears to sum up the strategy of the city\u2019s Economic Development Department: it will still support nonprofits that serve San Antonio\u2019s small businesses, but will do so through \u201ccapacity strengthening, technical assistance and specific initiatives that address barriers to accessing capital.\u201d<\/p>\n The beginning of that shift could be seen when\u00a0<\/strong>the department reworked its contract earlier this year with the San Antonio chapter of LISC, a national nonprofit that works with existing local organizations in historically disadvantaged communities to boost their capacity through leadership training, technical assistance and funding.<\/p>\n The $1.5 million the city gave LISC will cover up to $260,000 in operating expenses for six nonprofits that offer small business support services through the end of 2025. That includes SAGE, Prosper West and Southside First, as well as three nonprofits that do not operate within geographic boundaries:\u00a0Maestro Entrepreneur Center<\/a>,\u00a0Culturingua<\/a>\u00a0and\u00a0American Indians of Texas at the Spanish Colonial Missions<\/a>.<\/p>\n In addition to that money, LISC has created a networking group for all six nonprofits to strengthen their boards of directors and come up with consistent policies and procedures that will help them access other sources of funding \u2014 so they can better provide services to San Antonio\u2019s small businesses.<\/p>\n \u201cYou need boots on the ground and grassroots connections in the community,\u201d so strengthening these nonprofits is in the city\u2019s interests, said Leilah Powell, LISC San Antonio\u2019s executive director.<\/p>\n The nonprofits and the city agree that small businesses\u2019 single greatest need is access to flexible capital. The city has given out millions in federal pandemic relief grants to small businesses over the past several years, but that money\u00a0has largely been spent.<\/a><\/p>\nExpanding indirect support<\/h4>\n
Creating an ecosystem<\/h4>\n