Daniela Garcia, administrator for the SPARC office in Adams County, told county leaders on Oct. 9 that staff completed an environmental scan and risk assessment of the county’s nonprofit ecosystem to test how organizations would cope with a “financial cliff” as pandemic-era federal funding winds down.

The analysis groups nonprofits into three service types — basic and immediate needs, stabilization services, and quality‑of‑life programs — and scores organizations on six financial metrics. "So today, we're here to, just do an overview of, an environmental scan and risk assessment that we did on the whole nonprofit sector in the county," Garcia said, summarizing the project and its purpose.

The assessment uses six equally weighted metrics — reserve ratio, revenue diversity, change in net assets, program expense ratio, debt-to-asset ratio and liquidity — each scored 1 to 5, producing an overall sustainability score. Juan Cortez, grant compliance specialist for the SPARC office, said staff compared those internal scores with Charity Navigator ratings to add an external credibility check. "To determine financial sustainability, the assessment uses six key financial metrics," Cortez said.

Why it matters: SPARC staff warned that the expiration of American Rescue Plan Act (ARPA) and similar emergency funding could produce substantial service disruptions. The presentation highlighted a projected funding gap of more than $20,000,000 in the county’s basic-needs category under current assumptions and used stress tests (5%, 30% and 50% cuts to government grants) to model impacts on organizational budgets and sustainability scores.

Key findings

- Score bands and population: A combined score of 25–30 indicates "strong sustainability," 19–24 "moderate," 13–18 "high risk," and 0–12 "at risk."

- Size and distribution: Most community-based organizations operate at mid scale; staff reported 41% of organizations have operating budgets between $1 million and $5 million, 22% operate above $10 million, and about 10% are under $500,000.

- Grant dependency: The analysis shows many stabilization organizations and several large providers rely heavily on government grants; a subset of organizations in the "cusp" range were flagged as particularly sensitive to small funding shifts.

- Stress tests: Using a baseline 5% reduction staff call a sensitivity check that already puts some low‑sustainability organizations under strain. At a 30% government-grant cut, staff reported about 58 organizations move into higher risk categories; a 50% cut pushed that number to roughly 65 organizations. SPARC characterized the 50% scenario as a severe cliff if ARPA replacements or other supports are not secured.

What staff did and how: Garcia said the team relied on audited financial statements and IRS Form 990s where available from the most recent two years of data they could access; some inputs come from 2023 or earlier. Cortez explained revenue diversity is a scored metric so smaller organizations can score well if they manage finances responsibly, and larger organizations can still be vulnerable if their internal ratios are weak.

Questions and follow-up direction

- Data scope and currency: County leaders asked whether the analysis excluded organizations that have already closed; Garcia said the assessment included only organizations currently active and that the SPARC team can produce a retrospective analysis of groups that have ceased operations on request.

- ARPA breakdowns: Participants requested ARPA-specific exposure because those grants will largely expire by 2026. Garcia agreed to include an ARPA variable in the upcoming sector memo showing how much of each organization’s government grants came from ARPA and how that affects risk when those funds sunset.

- Sector focus and next products: Attendees asked SPARC to prioritize deeper sector resiliency work for food support, youth services, and housing. Garcia and Cortez said staff will provide shorter one‑page briefings on specific sectors within roughly 48 hours and a more detailed sector memo in the following weeks. Garcia said the office will also maintain organizational profiles that include filing timeliness and financial records to support internal grant decisions.

- Proactive engagement: Several meeting participants urged SPARC to use the assessment to prompt proactive conversations with organizations flagged as "on the cusp" and to work with foundations and partners (for example, Denver Foundation and United Way, which were named during discussion) to explore stabilization strategies, partnerships or consolidation where appropriate. Garcia said the SPARC office already plans targeted outreach to the organizations in orange boxes on the matrix to discuss stabilization and partnership options.

No formal board action was taken during the presentation; the session consisted of staff briefing and discussion. Garcia and Cortez framed the work as a tool to inform future county grant priorities, discretionary funding decisions and community partnership work, not as a binding policy change.

Methodology and limits

The team emphasized limits in available data: not all nonprofits file up‑to‑date Form 990s or have external audits, and some financial records in the dataset date to 2023 or earlier. Staff said organizations that spend at least $750,000 (now $1,000,000 for some thresholds) in federal funds are required to obtain an external audit; smaller organizations may not have audits, reducing the comparability of some records. Garcia noted that as new audits and filings arrive, SPARC will update scores and the tool.

Community and operational context

Meeting participants said the findings are useful for communicating with local elected officials, foundations and potential donors about sector vulnerabilities and to guide county grant criteria. The group discussed examples where the county has facilitated transitions or asset transfers to preserve service sites (for example, work to preserve tiny‑home sites and Meals on Wheels partnerships cited in the meeting). Garcia said the BRCDO (building resilient capacity for community‑based organizations) conference and other convenings will be opportunities to discuss strategies with funders and partners.

Ending

SPARC will circulate the requested one‑page sector briefings within about 48 hours and a fuller sector memo in the coming weeks that will include ARPA exposure by organization, staff said. The assessment and subsequent memos are intended to guide county grantmaking, targeted outreach and conversations with community foundations and nonprofit partners to mitigate service disruptions as pandemic-era grants decline.