By Don Keelan
It was bound to happen, and now it has; many of Vermont’s nonprofits have become the Fourth Branch of State Government.
Based on gross revenue, staff size, and the actual number of entities, it is indisputable that in Vermont, one of the largest, if not the largest, sectors of the State’s economy is the nonprofit sector.
It was inevitable that state agencies would not be able to execute the myriad programs of the State’s eight-billion-dollar spending budget. Thus, funding, execution, and control were transferred to scores of state-registered nonprofit organizations, thereby creating exponential growth in nonprofit organizations from where many were three decades ago.
This observation is not unexpected. The evolution was necessary. State agencies could not carry out the work of hospitals, colleges, mental health, housing agencies, and others.
But it comes with a price. The price is that the nonprofit entity is not subject to the same rules of transparency that must be adhered to by government agencies. Meanwhile, they are carrying out programs entirely funded by the State or federal funds administered by the state.
A recent example of transparency was an inquiry to Efficiency Vermont. My request was simple: would the nonprofit provide me with information on how they have spent the proceeds of the $34 million grant they received last August (legally, the grant was executed by EVT’s parent company, Vermont Energy Investment Corporation)?
For background, on August 22, 2023, Emma Cotton’s reporting in VTDigger was headlined, “Efficiency Vermont announces $36 million to help homeowners, renters, and businesses recover from floods.” However, a year later, significant changes were made in how the grant funds will be spent. EVT made it clear to me that there are “no funds from the State’s coffers, but that the funds are federal ARPA funds.”
To be accurate, the signed grant was $34 million, with $1 million going to the State for administrative costs. EVT has been cooperative in sharing some information on how the $34 million has been repurposed. I was told the details need to be accessed by requesting such information from the Vermont Public Service Department.
According to the material provided to me by a senior executive at EVT, 29% of the grant will aid flood damage victims. Specifically, EVT noted the following:
“None of the $34 million comes from state coffers or funding sources. Approximately $10 million is for residential flood recovery (homeowners and renters). Approximately $5 million is spent on a heat pump and water heater program for low- and moderate-income residential customers. Approximately $20 million in ARPA funds electric panel upgrades for low- and moderate-income residential customers.”
Based on EVT’s July 15, 2024 filing with VPSD, 409 installations have been made for homeowners and businesses to date.
The need to assist victims of last July’s and this year’s floods was not as great as initially thought. EVT has engaged in an active media campaign to get the word out but has still had little success. The grant’s fund was reallocated, but did the public know about it?
A $34 million grant overseen by a State agency is significant.
For reference, the Vermont Veterans’ Home in Bennington exemplifies how far $34 million can go. According to information provided by an official at the Veterans’ Home, the Home has a current census of 92 residents, 195 full-time staff, and an operating budget of $31.8 million.
I received this information within one hour of requesting it. I was told that if additional details were required, I should just ask.
Shires Housing, which recently provided numerous housing developments in Bennington, Arlington, and Manchester, announced that it was merging with the Housing Trust of Rutland County. The reported reason was to gain more leverage by being part of a larger organization. Meanwhile, needed rehab at existing projects is not being addressed according to public comments. My calls to Shires Housing requesting financial and tax information have been ignored.
The State’s PSD and Veterans’ Home staff have been most cooperative in responding to my requests. EVT has been cooperative, and Shires Housing has not at all.
With Vermont having a fourth branch of government, the same rules of transparency that apply to the other three branches should apply. This is especially so if the nonprofit agency is the beneficiary of grant funding, regardless of whether the funds come from the State “coffers” or the federal government with the State as the conduit.
The author is a U.S. Marine (retired), CPA, and columnist living in Arlington, VT.