After public scrutiny of a grant recipient, Portland’s green energy grant program is bolstering its proposal review process ahead of its second year of funding. Project staff hope the updated review processes will strengthen the grant recipients’ projects without jeopardizing the program’s goal of funding historically underserved organizations.

The Portland Clean Energy Fund (PCEF), a city climate-focused grant program funded by a tax on major retailers, was overwhelmingly approved by voters in 2018. PCEF aims to center Portlanders who are most impacted by the effects of climate change, like communities of color and low income people, by funding projects that lower carbon emissions in those communities and help develop a more diverse green energy workforce. PCEF awarded its first round of funding in 2021.

Following the historic June 2021 heatwave that killed 54 people in Multnomah County and nearly 100 people statewide, PCEF launched a program to deliver 15,000 cooling units to vulnerable Portlanders over the next five years. PCEF gave a $12 million grant to a local nonprofit called Diversifying Energy to coordinate the buying of all of the cooling units. However, an Oregonian investigation found that the company’s role in some past projects couldn’t be verified and that Diversifying Energy’s executive director Linda Woodley had spent time in prison for financial crimes.

After PCEF conducted its own investigation into the organization's previous work, Portland City Council chose to strip Diversifying Energy of the grant. A new organization was awarded the grant in early January, allowing the cooling unit project to move forward, but the delay caused by changing the grantee organization may push the first delivery of cooling units later into the summer.

According to PCEF project manager Sam Baraso, the investigation and subsequent change of grant recipient revealed an opportunity for the PCEF program to improve and strengthen its grant review process. However, improving the reviewal process includes maintaining the integrity of the PCEF program, which aims to give emerging community-centered organizations opportunities to grow in the green energy field.

“Our objective is to set folks up for success, not preclude or prevent them from accessing funds,” Baraso said of the new review process in a PCEF meeting last week.

Because PCEF intentionally awards grants to organizations from communities that have been historically ignored by traditional climate-related grant programs, many of the grantees have a limited work history. Without decades of experience to prove an organization’s capacity and responsibility, the PCEF grant committee will focus on evaluating the level of risk associated with grant proposals from less experienced organizations.

The PCEF grant committee already reviews and scores each grant proposal on the proposal’s eligibility for the program and technical feasibility before moving proposals forward to be considered for funding. The additional risk review will take place after applicants have made it past the eligibility and technical screenings and only apply to proposals that meet specific criteria.

Proposals will face additional review if an applying organization is less than three years old, requests more than $100,000 in project funds for an area they don’t have demonstrated experience in, or requests funding that’s more than $100,000 over double their average revenue. Proposals that raise additional budget and financial concerns are also subject to further review.

Additional review means PCEF staff will ask the organization for more information, like examples of successfully completed projects of similar scope or proof of internal financial oversight and governance within the organization. Grant applicants will be given six business days to provide the additional information. Woodley of Diversifying Energy was given a day and a half to provide proof of previous projects and argued that it was not enough time to contact her previous co-workers who could speak to her leadership.

With that additional information, PCEF staff will either move the project forward through the program's scoring process, recommend the project not move forward, or recommend that the proposal moves forward with more active management, like releasing portions of the grant money in stages contingent on regular performance measures.

The additional risk mitigation measures will add an estimated six weeks to the grant review process. The PCEF grant committee is currently reviewing grant proposals for the fund’s second round of funding using the new process and will deliver recommendations to PCEF staff and Portland City Council for approval in mid-May, as opposed to late March.

Notably, the PCEF program will not perform background checks on any of the grant applicants. Woodley of Diversifying Energy pointed to her community-based energy work after completing her prison sentence during a Portland City Council meeting, arguing that she should be judged off her current actions and not past mistakes.

“As someone who has worked in the community for a long time, restorative justice is a value I believe in,” Portland Commissioner Carmen Rubio said in December when the Oregonian first reported on Woodley’s previous financial crimes. “Time and again we’ve seen how our justice system can be a barrier to someone’s ability to make changes and reestablish their life.”

Baraso hopes the new review process further supports emerging organizations in delivering successful projects, doesn’t deter any applicants, and protects the viability of the PCEF program in the long-term. The PCEF program has dual goals of investing in climate-benefiting projects and building workforce capacity in historically underserved communities that are most impacted by climate change. Because of the latter goal, PCEF differs from traditional private investors who see younger organizations as too risky to invest in.

“While other grantmaking entities may decide not to fund new or emerging organizations, we are constantly learning how to better manage risks associated with practices we see as necessary to combat systemic inequity and climate change,” Baraso said.