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McMinnville finance committee recommends new nonprofit funding policy and tiers; council takes first reading of appropriation ordinance
Summary
The McMinnville Finance Committee voted to recommend a rewritten nonprofit funding policy that tightens eligibility and documentation requirements and establishes a three-tier award structure, and the council gave first reading to a related appropriation ordinance totaling $487,870.
The McMinnville Finance Committee voted to recommend changes to the city’s nonprofit funding policy and forwarded the draft to the full council with a recommended adjustment increasing the proposed maximum award for the third tier to $5,000.
Finance staff summarized the proposed changes: require nonprofit applicants to provide either a copy of their most recent annual audit or IRS Form 990; include a clearer cover-letter description of program focus, the number of individuals impacted and specifically how McMinnville residents are served; change the application period to July 1 through Aug. 30 but only in years when a surplus exists and the budget was adopted on time; and convert awards to a reimbursement-style grant so the city receives documentation (receipts/quotes) before releasing funds.
The draft also removes dues and the Magnus Library maintenance-of-effort from the nonprofit calculation (reducing the straight-charitable contribution percentage from 4% to 2.5%) and establishes three tiers of awards: tier 1 (economic/civic organizations) up to $10,000; tier 2 (health and safety organizations) up to $5,000; and tier 3 (educational/recreational/other) recommended to be raised to $5,000 (from an earlier $2,500 in the draft).
Staff said the policy would allow the council discretion about the timing of award letters and would require organizations to be in active status with the Tennessee Secretary of State before funds are released.
Committee members discussed the city’s operating position. Staff said the proposed policy is intended to prevent awards that would move the city into a deficit; one speaker noted the current fiscal-year operating deficit is “around $120,000” (staff provided the figure during committee discussion). Committee members also emphasized the policy is intended to remove ad hoc or preferential treatment of organizations.
The committee voted to recommend the policy to the full board with the tier 3 cap set at $5,000.
At the later regular council meeting, the council gave first reading to an ordinance appropriating $487,870 to nonprofit and civic organizations for the fiscal year beginning July 1, 2025. That ordinance was presented as the first reading and the council recorded a roll-call vote to advance the ordinance; the ordinance will return for second reading as required.
