City nonprofit struggles with drought of federal funds

Posted: October 05, 2013

On the third day of the federal government shutdown, the people who run an important regional science-education center began to get worried.

About paying their rent. Making payroll. About their ability to pay the hotel bills of the expert they dispatched to Egypt to help that troubled land revise its entire education system.

The 21st Century Partnership for STEM Education, a nonprofit research agency whose work influences schools across the Philadelphia region, gets 92 percent of its funding from the federal government. And that money has stopped flowing.

On Thursday, the pain began to seep beyond the thousands of furloughed federal workers and disappointed tourists toward agencies that depend on government money to operate.

"It's a tropical storm now," said F. Joseph Merlino, president of the Conshohocken-based partnership, "but it could gather energy and become a Category Five."

In Washington, tensions surged when a woman driving a black Infiniti tried to ram through a White House barricade, then led police on a chase that ended in gunfire outside the Capitol. President Obama and Republican leaders traded barbs while 800,000 federal workers - including most of the 46,880 in the Philadelphia and Camden metro areas - went without pay.

In Philadelphia, nonprofit agencies such as the Caring People Alliance (CPA), which serves children and strengthens families, waited and watched. About 95 percent of CPA's budget comes from state money and federal funds that pass through the state government.

"When they stop getting the federal dollars, they're not going to have it to pass it on to us," said president and CEO Arlene Bell.

The problem for agencies such as the 21st Century Partnership is how the government disburses grant money. For instance, the agency recently earned a $10 million grant from the Institute of Education Sciences to work on science programs in 90 Philadelphia schools. But the government doesn't cut a check for $10 million. Instead, 21/PSTEM, as it is called, must first spend the money, then immediately draw it down from the government..

And because 21/PSTEM is the conduit for funding that goes to partners such as Temple University, the University of Pennsylvania, and the University of Pittsburgh, those institutions won't be getting paid.

"If we can't draw the money down, then they don't get it," Merlino said. "It has a cascading effect, not just in this organization but on all our partners."

Renting its office and turning on its lights costs 21/PSTEM about $10,000 a month. The next payroll for its 19 employees will be paid from residual funds. What happens after that, though, is "an ongoing discussion," said financial manager Elysa Weiss.

Maybe worst of all, Merlino said, is that without government funding, the work stops. The effort to improve science education stops. The initiative to help children stops.

The 21st Century Partnership is hardly a household name. But the nonprofit is a player in science education across the region, working with dozens of school districts and partners that include researchers at Arcadia University, Villanova University, and the Franklin Institute.

It aspires to be a national leader in databased analysis, innovative curriculums, and professional development to advance what academics call STEM - science, technology, engineering, and mathematics - in schools and colleges. Its research focuses on ways to significantly improve student engagement and achievement. In short, 21/PSTEM seeks answers that can be game-changers.

The agency recently received a $400,000 grant to examine the impact in Philadelphia schools of what it calls churn. That's the percentage of teachers who change either their grade - moving, say, from first to fifth - or their subject, such as from English to math.

In city schools, the annual churn rate is 40 percent, Merlino said. His agency wants to find out how that instability affects students.

"We got the award letter," Merlino said, "but we got no money. The system is shut down."

The government closure stopped progress on finalizing a $2.5 million, 30-school study that could help keep students from dropping out, a project based on what is called proficiency-based grading.

It sounds radical: Schools would abandon traditional grades of A, B, C, D and F, instead assessing children on their understanding of a topic. Those who struggle would get more instruction and then be reassessed, the goal being to improve their comprehension and understanding.

"Kids aren't labeled as failures," Merlino said. "It changes the entire approach teachers have with students."

The agency is at the point of compiling and writing its research results, but right now, "we can't do that. I can't pay the people to do that. Nor can we take the next step to say, 'What if we do it in all math classes, or all the grades in a high school?' "

At any one time, 21/PSTEM has about $3 million in federal grants, from agencies like the National Science Foundation and the Department of Education.

The agency can draw on a $100,000 line of credit, but that will only last a month, and the federal government will not reimburse the cost of paying interest.

"We're not at the crisis stage today, but it's like a drought," Merlino said. "If it goes on a while, the crops are going to be destroyed."



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