The nonprofit sector is diverse and has a significant presence in the U.S. economy. Of the estimated 1.7 million tax-exempt organizations in fiscal year 2008, about 69 percent were religious, charitable, and similar organizations, or private foundations and were referred to as 501(c)(3) organizations, and about 8 percent were social welfare organizations. Nonprofit organizations provide services in a wide variety of policy areas such as health care, education, and human services. As we have previously reported, the federal government is increasingly partnering with nonprofit organizations because nonprofit organizations can offer advantages in delivering services compared to government agencies—they are more flexible, they can act more quickly, and they often have pre-existing relationships with local officials and communities. Nonprofit organizations have provided a wide range of direct long-term assistance and recovery services to those affected by the Gulf Coast hurricanes including job training, counseling, and housing. Nonprofit organizations have contributed significant support—financial and non- financial—to post-Katrina and Rita recovery efforts. At the end of 2009, FEMA officials in Louisiana reported that more than $24 million in donated dollars, volunteer hours, and goods had been leveraged through long-term recovery groups to provide permanent housing and address other unmet needs. In addition, some nonprofit organizations provided technical and support services to those nonprofit organizations that rendered direct recovery services to Gulf Coast residents. For example, as of 2007, the Louisiana Family Recovery Corps (LFRC) had provided more than $20 million in programs, initiatives, and activities in the Greater New Orleans area since the storms. In its 2005-2008 retrospective, the Louisiana Disaster Recovery Foundation reported awarding grants totaling nearly $29 million to nonprofit organizations involved in Louisiana’s recovery process. Organizations such as the Mississippi Center for Nonprofits had a well- established communications infrastructure with hundreds of nonprofits within the state of Mississippi before the 2005 storms and used this network following the hurricanes to disseminate grant and technical information, provide vital resource referrals, and communicate available training workshops for nonprofit service providers. The Louisiana Association of Nonprofit Organizations (LANO) was similarly positioned in the state of Louisiana. According to its officials, LANO serves more than 1,000 nonprofit organizations throughout the state of Louisiana. One of LANO’s field offices is located in New Orleans in a building that it shares with approximately 30 other nonprofit organizations, many of whom are providing recovery assistance to residents of the surrounding neighborhoods which are among the poorest in the Metropolitan New Orleans area. Table 1 below provides examples of some of the nongovernmental partners that helped to build the capacity of direct service providers involved in the Gulf Coast recovery by providing human resources, guidance, training, funding, and technical assistance. One of the primary mechanisms the federal government uses to provide support to nonprofit organizations is federal grants. Federal grants are forms of financial assistance from the government to a recipient for a particular public purpose that is authorized by law. Federal grant funds flow to the nonprofit sector in various ways. For example, some grant funds are awarded directly to nonprofits, while others are first awarded to states, local governments, or other entities and then awarded to nonprofit service providers. Federal grant funding may also be awarded to nonprofit subgrantees through contracts. Federal laws, policies, regulations and guidance associated with federal grants apply regardless of how federal grant funding reaches the final recipients. Nonprofit organizations in Louisiana and Mississippi provided numerous human recovery services to Gulf Coast residents following Hurricanes Katrina and Rita, and several of those services, including housing, case management, and mental health services were supported either directly by the federal government or indirectly through other organizations receiving federal support. The federal government relied on both pre-existing as well as newly developed funding programs when supporting nonprofit organizations. For example the federal government used well-established grants such as the Temporary Assistance for Needy Families, Community Development Block Grant, and the Social Services Block Grant to provide financial and human recovery assistance to Louisiana and Mississippi residents. Nonprofit as well as Louisiana and Mississippi state officials also identified additional federal funding programs that were in place before the storms that were used to assist in human recovery services such as the Department of Housing and Urban Development’s (HUD) workforce housing grants, Entitlement Cities, and the Low-income Home Energy Assistance Program; FEMA’s Community Disaster Loans; and the Low Income Housing Tax Credit program. There were also several newly created grants with emergency supplemental funds designed to provide human recovery assistance to hurricane-affected areas. Some of these grants include the Department of Health and Human Services’s (HHS) Primary Care Access and Stabilization Grant and HUD’s Disaster Housing Assistance Program. See table 2 for descriptions of selected federal funding programs that provided assistance to victims of the Gulf Coast hurricanes. Louisiana and Mississippi differed in how funds from these programs were distributed. Louisiana created organizations like the nonprofit LFRC and the state-level Louisiana Recovery Authority to serve as custodians and distributors of some of its federal funding, while Mississippi took advantage of provisions in the National Community Service Trust Act to establish a state-level commission to oversee the state’s community service block grants. Using federal funding programs such as those shown in table 2, nonprofit organizations have provided a wide range of recovery services to residents affected by Hurricanes Katrina and Rita including housing, long-term case management, and a variety of counseling services (including crisis management and substance abuse). According to nonprofit officials in both Louisiana and Mississippi, as of early 2010, Gulf Coast residents continue to need services in these areas. CDBG funds are being used by Providence Community Housing, a collaborative effort of Catholic housing and social service organizations in the New Orleans community, to build, rebuild, or repair 7,000 units of affordable houses and apartments over a 5- year period that began in 2006. Some nonprofit officials also told us that long-term case management services were still widely needed. For example, according to officials with the Lutheran Episcopal Services in Mississippi, as of the summer of 2008, this nonprofit had provided case management services for several years to Katrina-affected residents in the Mississippi Gulf Coast region through the efforts of approximately 60 case managers who worked with clients throughout Mississippi. Some nonprofits in our review were instrumental in helping other nonprofits access available federal funds in order to deliver much needed services. The United Methodist Committee on Relief (UMCOR), for example, also served as the umbrella grants manager for Katrina Aid Today (KAT), a national consortium of nine subgrantees. The consortium was required to provide matching funds and was able to put up $30 million of in-kind funds, while FEMA channeled foreign donations of $66 million over a 2-year period. At the completion of its grant-funded activity in March 2008, KAT had enabled case management services for approximately 73,000 households. As the umbrella grants manager, UMCOR provided financial compliance monitoring, technical assistance and training to the nine consortium members. Nonprofits such as Louisiana’s Odyssey House and Mercy Family Center also provided crisis, mental health, and substance abuse counseling made possible as the result of federal funds. In addition, according to officials from the Catholic Charities Archdiocese of New Orleans, their organization contracted with the Louisiana State Office of Mental Health and the resulting Louisiana Spirit hurricane recovery project, funded by FEMA, helped provide intervention and mental health services to its clients. The National Response Framework (NRF) designates the FEMA Voluntary Agency Liaison (VAL) as the primary liaison to the nonprofit community. VALs are responsible for initiating and maintaining a working relationship between FEMA, federal, state, and local agencies and nonprofit organizations. VALs also advise state emergency agencies on the roles and responsibilities of nonprofit organizations active in the recovery. The FEMA VAL system is staffed by a combination of permanent federal employees as well as temporary and term-specified employees whose work focuses on a specific disaster. Among the permanent FEMA employees are 10 regional VALs—one for each FEMA regional office— along with an additional 2 VALs in the Caribbean Area and Pacific Area offices. FEMA also has five VAL staff based at headquarters whose role is to provide the overall VAL program and policy development, the national perspective, training and development to states and regions, support services in the field, coordination with other DHS and FEMA entities with nonprofits as stakeholders, and oversight of the FEMA Donations and Volunteer Management Program including the National Donations Management Network. FEMA also deploys Disaster Assistance Employees, reservists who can be called up to carry out the VAL role in local communities following a specific disaster and, depending on the size of the disaster, typically serve for a period of approximately 50-60 days with a maximum of 50 consecutive weeks in a calendar year. As of March 31, 2010, FEMA had 90 disaster assistance employees in its reserve VAL cadre. In addition, after the Gulf Coast hurricanes, FEMA hired 40 “Katrina VALs,” of which 10 are remaining in Louisiana as of May 24, 2010. These are term-limited federal employees hired locally who are designated to specifically address Katrina-related issues and 10 remain based on FEMA’s need for their continued work. FEMA is not planning to retain these individuals after Katrina-related work is finished. FEMA’s VAL program received general approval from state, local, and nonprofit officials we spoke with. Several nonprofit officials told us that VALs were instrumental in helping initially set up and guide the operation of long-term recovery committees. Officials from state Voluntary Organizations Active in Disasters (VOAD) in Louisiana and Mississippi spoke highly of the respective regional VALs and said they were involved with the VOADs on a regular basis helping coordination between the VOADs and nonprofits. And officials from various nonprofit organizations cited how useful they found the VAL coordination.