Governor Nixes Serve South Dakota; AmeriCorps Funding in Limbo

Last updated on 2017-02-12

Here’s my morning head-scratcher:

South Dakota is getting $1.6 million through AmeriCorps to help the Red Cross, Boy Scouts, the Extension Service, Teach for America, and some Native American groups. State government doesn’t have to put any money in to make that happen; Pierre just needs to appoint a commission to oversee the program. (AmeriCorps is easier and cheaper than Medicaid expansion, which the Governor is working on.)

But after authorizing non-profit Serve South Dakota at the end of 2013 to oversee AmeriCorps, Governor Dennis Daugaard has apparently decided to let AmeriCorps die:

Michael Wyland, the chair of both Serve South Dakota and the South Dakota Commission for National and Community Service, asked the governor’s office for a sign of support to keep the commission going.

Wyland said the federal government provides financial support, but only if states provide a way to oversee the programs.

Wyland said the group asked Governor Daugaard to appoint a full commission to keep it going, but without it he said Serve South Dakota will have to put an end to the non-profit organization as of December 31st.

In response to the end of Serve South Dakota, the governor rescinded the Executive Order which established the state commission.

Serve South Dakota chair Michael Wyland said “with the loss of the commission, we lose the opportunity to get federal funding for national service in South Dakota. The value of that funding is a million-and-a-half dollars a year, directly and indirectly about $6 million dollars a year” [Mark Roper, “Statewide Community Service Organizations at Risk,” KSFY-TV, 2015.10.07].

Serve South Dakota provides this narrative of an apparent breakdown in communication with the Governor in its July 31, 2015, minutes:

Wyland commented on the concerns of the sustainability of Serve South Dakota and the state of the commission. Key issues are: 1. Recommended commission appointees have not been appointed by the Governor’s office; 2. Organization has been operating under a CNCS alternative match schedule that will escalate to a 50-50 CNCS-Serve SD match in 2016. Without an alternative match schedule in 2016, Serve SD will likely need a $150,000 cash match to meet standards in 2016.

Wyland and Ladonski shared that we have been told indirectly that the Governor’s office has been looking at restructuring the state commission, and without any concrete information to the contrary, we have to be prepared that the new configuration may not include Serve South Dakota and it’s 501(c)3 designation. Despite our request for approval of commissioner nominations in December of 2014, we have been told by the Governor’s Office that those nominations have been put on hold until the Governor’s Office researches the best approach to hosting a commission. Seven months have passed with little to no communication from the Governor’s Office despite requests from staff and board members and therefore, we cannot make a determination of when the Governor’s Office will come to their conclusion.

Ladonski thanked Burke and Wyland for their work in reaching out to the Governor’s office on Serve South Dakota’s behalf. Although there have been many outreach efforts undertaken by a variety of parties over the past seven months, Ladonski said that the only response has been to inform staff that the Governor’s Office was not prepared to bring the commission into the discussion at this time.

In addition to the structural challenges, Ladonski explained the difficulty in fundraising administrative funds, particularly with uncertainty surrounding a restructuring. Then there is the issue of funders wanting to ensure state participation, for which we have not traditionally experienced and cannot guarantee into the future.

Ladonski informed commissioners that Bill Basl, President of AmeriCorps, was scheduled for a telephone conversation today with our co-liaison, Grace Kessler, Policy Analyst with the Governor’s office. Unfortunately Kessler was ill and unable to speak with Bill. CNCS will attempt to reschedule meeting with Kessler.

Commissioners discussed the difficulty of the lack of communication with Governor’s Office and how it affects the future success of Serve South Dakota. Wyland and Ladonski shared that without BOTH support of the Governor’s Office and additional funding for 2016, we will need to entertain dissolution of the commission [Serve South Dakota, minutes, 2015.07.31].

The September 8, 2015, minutes provide Serve South Dakota’s version of the timeline that led to the current state affairs:

Wyland opened the meeting stating that things have not changed appreciably in the 6-8 weeks since the commission last met. He commented that there has been a lot of activity and considerable effort, but unfortunately not much change. Issues that were talked about in July are still the issues today – namely whether or not the commission and the non-profit can continue to exist given lack commissioner appointments, communication from the Governor’s Office and lack of funding. Wyland stated that Serve South Dakota has been working hard to achieve clarity in each of those areas.

Ladonski outlined a summary of historical communications with the Governor’s Office:

• 2011 commission was established via Governor Executive Order housed under the South Dakota Non-Profit Association (SDNA).
• Second quarter of 2012, SDNA became active as a granting agency.
• Third quarter of 2012, SDNA was fully staffed.
• Less than a year later after the commission began work under SDNA, the executive
  director of SDNA resigned, and organization was experiencing significant financial
  hardships and facing restructuring.
• August 2013, commission decided to restructure knowing there were key items that had
  to fall in to place to be successful. A decision was made to pursue those activities.
• End of 2013, Serve South Dakota was able to secure support from John T. Vucurevich
  Foundation that allowed continuation of operations.
• January 2014, restructured bylaws, official hiring of Aimee Ladonski as Executive
  Director, and the renaming of the 501(c)3 to Serve South Dakota.
• Spring of 2014, Wyland and Ladonski met with Dusty Johnson, Governor’s Chief of Staff.
• Summer of 2014, added staff: Director of Finance and Operations, and Program
  Director.
• Responded throughout summer and fall months to a series of information requests
  from the Governor’s office, and we believed we were making headway with
  understanding and general support of national service.
• Dusty Johnson resigned as Chief of Staff in October 2014. Since that time Serve South
  Dakota has experienced difficulty with communications with the Governor’s office.
• December 2014, commissioner nominations were forwarded to the Governor’s office.
• January 2015, secured a meeting with new co-liaison, Nathan Sanderson, Director of
  Policy. Grace Kessler, Policy Analyst that manages the Governor’s boards and
  commissions has been a co-liaison for the commission since 2013.
• Wyland and Ladonski met with Sanderson and Kessler in Pierre who had questions and
  generally seemed to lack understanding about national service, specifically the commission. Sanderson and Kessler said they would get back to Wyland and Ladonski in a couple of weeks regarding Serve South Dakota’s commissioner nominations. 8 months since that conversation, there is still no word on the status of those nominations or their suggestion for replacement.
• Months went by without return phone calls or emails to staff or board members.
• On July 8, 2015, Ladonski received communication from Kessler, our co-liaison, that the
  Governor’s office is looking at a restructuring of the commission, and that they are not going to appoint commissioners until that has been decided. Governor’s office would let Ladonski know if they wanted to bring the board chair or Ladonski into that discussion, but at that time Governor’s office was not looking to do that.
• Commission reached out to CNCS even before previous events and asked for their assistance. Ladonski reported there have been multiple discussions between Governor’s office and CNCS including Bill Basl, President of the National AmeriCorps program, with Kessler. Bill Basl offered to travel to Pierre, but that was declined and conversation occurred via phone.
• To date, neither the board chair or executive director have been able to have a discussion with the Governor’s Office to discuss: the status of the commission, share
  information that could be relative to the decision of the governor’s office, discuss the status of commissioner appointments, or gain information on what this proposed restructuring looks like. This lack of communication has made it difficult for Serve SD staff to operate and plan.
• Recently, Kessler has hinted that they are looking into a commission structure similar to South Carolina’s. This is a structure that absolves the Governor’s office of any real monetary or in-kind responsibility for the commission and has proven to be ineffective.
• September 2015, Ladonski reported some movement, as a scheduled call is to take place between a commissioner and Kessler on Friday, September 11th.

Despite the challenges before us, Ladonski wanted to share the successes of commission’s work: full staff; professional offices; more robust notice of funding opportunity granting process; thorough training for subgrantees; two national competitive grantees in portfolio (which CNCS stated is a big success for a young commission); very diverse and much more robust subgrantee portfolio with a strong vision for the way forward if Serve South Dakota were to continue.

During the this time of development, Serve South Dakota has a diverse portfolio that includes USD, SDSU Extension, American Red Cross, Center for American Indian Research and Native Studies, St. Francis Mission Foundation, Teach for America, Red Cloud Indian School, Boy Scouts of America, and Black Hills Special Services. Ladonski expressed that Serve South Dakota has come a long way from the initial two-three subgrantees just a couple of years ago. Also during this time, staff has been involved in a financial monitoring visit, a programmatic monitoring visit by CNCS, and an A-133 audit.

Ladonski wanted to share this with commissioners to demonstrate success despite the consequences of Governor’s Office communication challenges.

Ladonski stated the commission has things to consider in regards to Serve South Dakota’s fate if further funding is not available:

• Provide property manager with 60-day notice to release Serve South Dakota from lease obligations by October 1, 2015.
• Inform subgrantees by October 1, 2015 of Serve South Dakota’s inability to release Notice of Funding Opportunity this fall so they can prepare for 2016-2017 national competition. Staff recommends that Serve South Dakota notifies subgrantees of the opportunity for national competition and help prepare them where possible.
• Initiate “close-out” operations: file appropriate paperwork with the state and federal governments, finalize reporting for current grants, inform partners and stakeholders, close office safeguard files, etc.
• Staff will forward an unusual proposal to CNCS for an alternative match application that requires only in-kind (no cash) match for 2016. This is not an ideal AMS application structure and as a result, we do not anticipate full approval by CNCS. If CNCS did approve the alternative match schedule, Serve South Dakota would have no cash match requirement, but we would still need around $15,000 of working capital in the bank for cash flow between drawdowns from the federal government.

Ladonski stated that the board’s decision today would impact year-end budget estimates. However, current projections reflect more than enough capital to reach year’s-end fully staffed and with sufficient resources.

Wyland asked if there was anyone who had any further questions. Discussion followed among commissioners concerning past communications and possible ways in the future to connect with the Governor’s office. Wyland stated that guesswork, supposition and polite inquiry does not allow for sufficient operations. We can only make decisions based on the information that we have. The challenge, now that we are where we are, is understanding our options. Wyland suggested that the commissioners adjourn the SDCNCS meeting and re-convene as the Serve South Dakota Board of Directors to discuss the finances of the non-profit, and the future of the non-profit as a corporate entity [Serve South Dakota, minutes, 2015.09.08].

The Serve South Dakota board apparently met on September 14 and voted to dissolve the organization. Governor Daugaard followed up on September 28 with Executive Order 2015-11, rescinding the December 2013 executive order authorizing Serve South Dakota to oversee AmeriCorps activities in South Dakota.

I’m trying to figure out what motivates changing how AmeriCorps runs. We haven’t seen any red flags the way we have with Mid-Central Educational Cooperative with the GEAR UP flap and all the federal money flowing to cozy SDGOP cronies who can’t do math. The bipartisan Serve South Dakota board of directors, operating as an official state commission, and its staff of three appear to be moving its federal money to good causes with proper oversight.

The Governor’s Office says it is looking for ways to keep money flowing to the local service organizations. Why keeping that money flowing through Serve South Dakota is unacceptable remains a mystery.