Heinz Endowments to invest up to $10 million to leverage Inflation Reduction Act funds for region
Pittsburgh, Pa., February 7, 2024 — The Heinz Endowments has set aside $10 million to be available over two years to help leverage federal funds through the Inflation Reduction Act and other government legislation. The money will be used to support projects in western Pennsylvania such as renewable energy expansion, facility upgrades, clean energy jobs and investments, and research.
The Endowments’ investment plan centers on establishing a coordination center, or hub, that would build a pipeline of projects that could receive IRA funds, assemble a team of experienced technical assistance providers, promote success stories and offer a range of other support.
The IRA, which was passed in 2022, includes roughly $500 billion worth of investments and tax breaks in energy-saving programs, job creation and measures to lower prescription drug prices and expand the Affordable Care Act.
The clean energy portion of the legislation includes tax breaks and rebates for consumers, developers and manufacturers that invest in solar-power systems, electric vehicles and charging equipment, energy-saving appliances, battery-storage systems and heat pumps. While nonprofits are not tax-paying entities, a section of the IRA allows them to qualify for certain provisions of the law such as direct payments of up to 60 percent of the cost of energy-saving projects such as installing solar panels that generate electricity.
Western Pennsylvania has not yet benefited meaningfully from the Inflation Reduction Act’s incentives and grants. For example, according to Climate Power’s Clean Energy Boom Anniversary Report, in its first year the IRA created the most permanent jobs in Georgia (16,678), Michigan (15,856), New York (13,555) and South Carolina (13,543). Pennsylvania ended the first year with just 457 new jobs through the law.
“For decades, The Heinz Endowments has helped to build the infrastructure for sustainable development in southwestern Pennsylvania as part of its effort to reduce air and water pollution, achieve cleaner and safer living and working environments for local residents, and improve the quality of life in the region,” said Endowments President Chris DeCardy.
“We want to take advantage of this exciting opportunity to expand climate-friendly policies, investments, and practices that have the potential to create a healthier region. We also want to support the creation of good-paying jobs for the future as we work toward both a healthy environment and a healthy economy.”
The hub, which is expected to launch later this month, is designed to help nonprofits, municipalities, school districts and redevelopment authorities, among others, interested in applying for funds through the IRA by providing assistance in areas such as grant writing, project development, legal guidance and communications support. These groups also would be able to apply to the hub for assistance in developing projects, secure funding, fulfill compliance and reporting requirements, and implement the plans.
“We believe that these programs will accelerate a shift of business, government, and civic sectors towards a more sustainable orientation in the long term,” said Sustainability Vice President Andrew McElwaine.
An example of the possibilities could be a school district applying to the hub for help in obtaining federal funding for solar panel installations. This process would include assessing facilities for solar viability, alternative electrification, and weatherization; crafting a financing plan; developing and releasing a request for proposals; and filing for the direct-pay provisions to secure a cash payment for up to 60 percent of the installation cost.
The Endowments and The Pittsburgh Foundation hired the Washington, D.C.-based firm Freedman Consulting to have its What Works Plus team to assess how Pennsylvania could maximize the impact of the IRA, and the evaluation found several needs and barriers as well as opportunities. These obstacles included a lack of bridge funding for projects eligible for tax credits or direct payments; insufficient staff and resources among state agencies to administer certain funds from the IRA; a lack of staff and expertise among local entities to identify IRA funding options and requirements and to submit applications; misconceptions about clean energy-related career opportunities that have created concerns among some labor advocates; and an overall lack of knowledge about the IRA among many residents.
“While the opportunity is immense, the challenges of a fractured region with limited capacity are also large,” Mr. McElwaine said. “To realize this opportunity before us, we must enhance our existing nonprofit and municipal capacity, and in some cases build new capacity – and we need to do it quickly.”
Rob Stephany, the Endowments’ senior program director for Community & Economic Development, echoed Mr. McElwaine’s sentiments.
“Without an intervention targeted to the scale of the opportunity, we anticipate that the region will lose out on the competitive investments and incentives granted through the IRA and related laws, and will underperform on the guaranteed allocations,” Mr. Stephany said. “Our initiative could really help organizations with limited capacity move projects from early visioning to fundraising and implementation.”
Last year, the Endowments worked with Bruce Katz, co-founder of New Localism Advisors, an Arlington, Virginia-based firm that consults with city and regional leaders on initiatives promoting sustainable growth, to help Pennsylvania maximize resources from the IRA. He is assisting mayors across the state in advocating for statewide action to access the funds and helping state officials to develop a strategy to ensure that Pennsylvania uses the federal money to its maximum potential.
Heinz Endowments grantee ReImagine Appalachia, a coalition of representatives from organized labor, local governments, and faith, racial justice and environmental groups, has been hosting regional forums on each of the major provisions in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act to encourage regional participation.
Other Endowments grantees that have been working to help nonprofit organizations and institutions to learn how to access the federal funding include solar energy adviser Pennsylvania Solar Center, affordable housing developer ACTION-Housing, community development funding intermediary Bridgeway Capital, and the Philadelphia-based energy awareness and education nonprofit Energy Efficiency Alliance.
The Heinz Endowments also is working with foundation colleagues and state officials to help groups in western Pennsylvania to prepare for the IRA submission process or to leverage what they receive through it. The Pittsburgh Foundation, for example, is partnering with the Endowments on various aspects of the work, such as providing local officials with information on the uses of the IRA, explaining to officials how projects in communities can qualify, assisting organizations in applying for different federal climate funds, and raising awareness across the region about the opportunities the IRA offers.
“We’re proud to partner with so many visionaries working for a region where sustainable practices and projects unite people because they are good for health and the environment, great for living wages, and help keep and attract the diverse workforce we need to thrive in the future,” Mr. DeCardy said. “This boost of federal resources is a unique opportunity to spread that reality much more widely for everyone.”