suburban poverty_brookings 2010

8/8/2019 Suburban Poverty_Brookings 2010

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BROOKINGS | October 2010 1

METROPOLITAN OPPORTUNITY SERIES

Strained Suburbs:The Social Service Challengesof Rising Suburban Poverty

Scott W. Allard and Benjamin Roth1

Suburbs were

home to a large

and fast-growing

poor population

in the 2000s,

yet many dont

have an adequatesocial services

infrastructure in

place to address

the challenge.

FindingsThis report examines data rom the Census Bureau and the Internal Revenue Service (IRS), along

with in-depth interviews and a new survey o social services providers in suburban communities

surrounding Chicago, IL; Los Angeles, CA; and Washington, D.C. to assess the challenges that rising

suburban poverty poses or local saety nets and community-based organizations. It fnds that:

nSuburban jurisdictions outside o Chicago, Los Angeles, and Washington, D.C. vary sig-

nifcantly in their levels o poverty, recent poverty trends, and racial/ethnic profles, both

among and within these metro areas. Several suburban counties outside o Chicago experi-

enced more than 40 percent increases o poor residents rom 2000 to 2008, as did portions

o counties in suburban Maryland and northern Virginia. Yet poverty rates declined or subur-

ban counties in metropolitan Los Angeles. While several suburban Los Angeles municipalities

are majority Hispanic and a handul o Chicago suburbs have sizeable Hispanic populations,

many Washington, D.C. suburbs have substantial black and Asian populations as well.

nSuburban saety nets rely on relatively ew social services organizations, and tend to

stretch operations across much larger service delivery areas than their urban counter-

parts. Thirty-our percent o nonprofts surveyed reported operating in more than one subur-

ban county, and 60 percent oered services in more than one suburban municipality. The size

and capacity o the nonproft social service sector varies widely across suburbs, with 357 poor

residents per nonproft provider in Montgomery County, MD, to 1,627 in Riverside County, CA.

Place o residence may greatly aect ones access to certain types o help.

nIn the wake o the Great Recession, demand is up signifcantly or the typical suburban

provider, and almost three-quarters (73 percent) o suburban nonprofts are seeing more

clients with no previous connection to saety net programs. Needs have changed as well,

with nearly 80 percent o suburban nonprofts surveyed seeing amilies with ood needs more

oten than one year prior, and nearly 60 percent reporting more requent requests or help

with mortgage or rent payments.

nAlmost hal o suburban nonprofts surveyed (47 percent) reported a loss in a key rev-

enue source last year, with more unding cuts anticipated in the year to come. Due in

large part to this bleak fscal situation, more than one in fve suburban nonprofts has reducedservices available since the start o the recession and one in seven has actively cut caseloads.

Nearly 30 percent o nonprofts have laid o ull-time and part-time sta as a result o lost

program grants or to reduce operating costs.

Suburbs were home to a large and ast-growing poor population in the 2000s, yet ew o the subur-

ban communities studied have an adequate social services inrastructure to address the challenge.

The Great Recession has exacerbated this gap between demand and capacity in the suburbs, as

nonproft social service providers have been increasingly asked to help rising numbers o low-

income amilies with tighter budgets and ewer resources. As is true or cities and rural places, the

nonproft social service sector in suburbs can help these communities alleviate the worst impacts

o the current downturn and uture increases in poverty. Promoting stronger region-wide providers

and better engaging charitable oundations in metropolitan saety net planning represent impor-

tant strategies or strengthening suburban social services inrastructure.


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BROOKINGS | October 20102

Introduction

Cities and suburbs occupy well-defned roles within the discussion o poverty, opportunity,

and social welare policy in metropolitan America. Research exploring issues o poverty

typically has ocused on central-city neighborhoods, where poverty and joblessness have

been most concentrated. As a result, place-based U.S. antipoverty policies ocus primarily

on ameliorating concentrated poverty in inner-city (and, in some cases, rural) areas. Suburbs, by con-trast, are seen as destinations o opportunity or quality schools, sae neighborhoods, or good

jobs. Mention o suburbs in conversations about poverty in metropolitan America typically revolves

around eorts to connect low-income amilies in central cities to better homes and jobs in suburban

communities.2

Several recent trends have begun to upset this amiliar urban-suburban narrative about poverty and

opportunity in metropolitan America. In 1999, large U.S. cities and their suburbs had roughly equal

numbers o poor residents, but by 2008 the number o suburban poor exceeded the poor in central

cities by 1.5 million. Although poverty rates remain higher in central cities than in suburbs (18.2 per-

cent versus 9.5 percent in 2008), poverty rates have increased at a quicker pace in suburban areas. 3

In part this is due to sustained population growth outside o cities, such that the U.S. has become a

nation where a majority o all Americans now reside in the suburbs. The two economic recessions that

bracketed the past decade, however, have also contributed to the changing mix o opportunity in urban

and suburban areas. More than in previous recessions, suburban communities have experienced rateso unemployment comparable to those in cities.4 Moreover, the urban and suburban poor are quite

similar in the aggregate in terms o their work eort and household structure.5

Strategies to address poverty in suburbs, as in cities, include both cash assistance programs and

social service programs. Five cash assistance programs are particularly prominent today: Temporary

Assistance or Needy Families (TANF) welare cash assistance; the Supplemental Nutrition Assistance

Program (SNAP, ormerly the Food Stamp Program); Unemployment Insurance (UI); the Earned Income

Tax Credit (EITC); and the reundable portion o the Child Tax Credit (CTC). Combined these fve core

cash assistance programs delivered about $230 billion in aid nationally in 2009, driven in part by

signifcant expansions in SNAP and UI that have helped millions o amilies cope with income losses

during the Great Recession.6

Though these cash assistance programs deliver aid directly to people rather than places, many

have expanded in recent years to meet rising poverty in suburban areas. For example, hal the recent

growth in EITC flings has occurred in suburban communities as more workers in those areas qualiy

or the tax credit.7 SNAP and UI caseloads, meanwhile, rose at a aster rate in suburban communities

than in central cities during the frst year o the Great Recession. 8

O equal magnitude to the cash assistance saety net, the United States also spends $150 billion to

$200 billion each year on social or human service programs that provide specialized services or low-

income populations (e.g., job training, adult education, child care, substance abuse or mental health

services, emergency assistance).9 Most social service programs are unded by ederal, state, or local

government, but delivered by community-based nonproft organizations. Even though they oten get

overlooked in policy discussions, social service programs provide essential help to millions o low-

income Americans, including many who may not be eligible or cash assistance. Measures o social

service program utilization are limited, but there is evidence that more amilies are seeking help rom

such organizations in recent years. For example, visits to ood pantries are up 46 percent since 2005

and the number o sheltered homeless amilies increased by 30 percent since 2007.10

Unlike many cash assistance programs, which are available to those who meet eligibility criteria,

there is no entitlement to social service programs or guarantee that programs will be oered in ones

community. Instead, social service provision in cities, rural communities, and suburbs is inherently a

local activity, relying heavily on community-based nonproft organizations to deliver publicly unded

social service programs through contracts with state or local government agencies. Even though they

operate autonomously rom government, nonproft service organizations are integral components

o todays saety net and are critical avenues through which the poor connect to the saety net. The

availability o nonproft social service programs varies rom place to place, however, determined by

levels o ederal, state, and local government unding; substantive orientation o local nonprofts; the


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engagement o local civic leadership and entrepreneurs with issues o poverty; and the presence o

private philanthropy.11

Previous research on social service provision in urban and rural areas highlights the challenges

communities ace in providing accessible and responsive programs to low-income populations. For

example, urban neighborhoods with poverty rates over 20 percent have access to about 30 percent

ewer social service program opportunities than the average neighborhood. Nearly hal o nonproft

service organizations in urban and rural areas also reported a decrease in revenue in recent years.These unding cuts led about three-quarters o urban and rural social service providers to cut pro-

grams, sta, client caseloads, or close temporarily.12

Evidence about the social services inrastructure in suburbs, however, is quite limited. 13 To fll

that important gap, this report explores the challenges aced by suburban saety nets primarily

through surveys collected between June 2009 and April 2010 rom nonproft social service provid-

ers in the suburban communities o three major metropolitan areas: Chicago, IL; Los Angeles, CA;

and, Washington, D.C. It begins by examining the capacity o suburban social service organizations

in these three metropolitan areas and discusses the changing needs they conront. The report then

assesses the vulnerability o suburban providers to unding cuts and surveys the strategies they are

using to cope with rising demand amid alling revenue. It concludes with a discussion o implications

or policy and practice.

Methodology

This analysis combines a special survey o suburban social service providers, including

in-depth interview transcripts, with publicly available data rom the Census Bureau and IRS

to examine the composition and coverage o these providers, and the extent to which the

Great Recession has aected them and their communities.

GeographyThis report defnes suburbs as the counties and municipalities neighboring the largest city or cities

in a metropolitan area.14 Much o the social assistance landscape outside o big cities is tied to county

and municipal boundaries. Cash assistance programs oten are administered by county governments.

Similarly, many government and nonproft social service programs defne eligibility according to the

county or municipality o residence and administer programs within those jurisdictional boundaries.

Philanthropic oundations also typically defne their impact areas along county and municipal lines,

limiting their grantmaking to specifc urban and suburban jurisdictions.

For this study, suburban areas in metropolitan Chicago include municipalities outside the city o

Chicago in Cook County, as well as DuPage, Lake, Kane, McHenry, and Will counties. Los Angeles

suburbs include municipalities in Los Angeles County outside the city o Los Angeles, as well as

Riverside and San Bernardino counties east o Los Angeles.15 Finally, Washington, D.C. suburbs

include Prince Georges and Montgomery counties in Maryland; and Arlington, Loudoun, Fairax, and

Prince William counties, and Alexandria city, in northern Virginia.

These study sites were selected or several reasons. First, they yield diverse poverty rates and

changes in the number o poor persons across suburban communities within the same metropolitan

area.16 Suburban counties and municipalities, even those neighboring each other, can dier signif-

cantly in these regards, producing very dierent needs and challenges within and across metropolitanareas.17 These metropolitan areas and sites also vary in the strength and size o their suburban social

service sectors. Because local government, philanthropy, and nonproft service organizations shape

which services or programs are delivered in their communities, these services can vary widely rom

place to place across suburban areas. Finally, this report builds upon previous research completed by

the authors on social service providers in the urban centers o these three metropolitan areas.18

Survey DataTo better understand the current context or suburban social service provision, this study col-

lected detailed inormation on the operations and fscal health o suburban nonproft social service


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organizations through our surveys conducted over an 11-month period rom June 2009 to April

2010. A survey sample o 225 nonproft social service providers in the three study sites was purpo-

sively selected to ensure adequate variation by organizational size, location, and service mission.19

Organizations were included i they delivered direct services in one o several areas to low-income

persons in their community: substance abuse; mental health; employment assistance; ood; hous-

ing; children and youth services; amily services; emergency assistance; and homeless centers.20

Verifcation calls were made to each provider to confrm location and services oered, as well as iden-tiy an executive director or program manager who could answer longer survey questions. O the 225

providers identifed, 198 completed verifcation calls or a response rate o 88 percent.21

One hundred (100) o the 198 nonproft service providers that completed the verifcation call com-

pleted a ollow-up 25-minute telephone survey, a response rate o 53 percent.22 Telephone surveys col-

lected detailed inormation on client characteristics, services available, unding, changes in demand,

shits in program unding, and strategies or coping with the impact o the recession.23 About two

months ater completing the phone survey, 76 respondents to the telephone survey completed a web

survey that collected inormation on changing client populations and needs, as well as inormation

about reserve unds and expectations o public program cuts. A third web survey ocused on commu-

nity collaboration was completed in February 2010 with 77 nonprofts rom the original telephone sur-

vey. A fnal set o 77 web surveys was completed in April 2010 that asked organizations to revise their

expectations about program unding or the coming fscal year. Sixty-one organizations completed all

our waves and 82 completed three o our waves.24 In order to gain a more textured understandingo the everyday operation o social services in these three metropolitan areas, the authors conducted

site visits and in-depth interviews with 17 agencies that participated in the initial telephone survey.25

Profle o Survey RespondentsSuburban nonproft service organizations in the survey sample oered a variety o services and the

median nonproft we interviewed served 310 adults per month (Appendix Table A-1). Consistent with

fndings elsewhere, the vast majority o ormal nonproft social service providers in our sample74

percentsel-identifed as secular, compared to 26 percent that identifed as religious organizations. 26

Reecting the racial and ethnic diversity o our study sites, about one-third o nonprofts we inter-

viewed in each metropolitan area reported caseloads that were majority Hispanic.

Most nonproft providers interviewed oered help with basic material or household needs. About

70 percent provide ood assistance to low-income amilies, 48 percent oer some type o emergency

cash or utility assistance, and 53 percent assist amilies with clothing needs or other household items.

Roughly hal o nonprofts interviewed work with low-income households to fnd aordable housing or

make rent payments. One-third maintained temporary shelters or housing, oten in conjunction with

other services or types o assistance.

Nonprofts working with low-income populations in suburban areas also provide a range o more

ormal services that require proessionally trained sta. Fity-fve percent o surveyed organizations

provide job training, search, or placement assistance and 33 percent administer adult education pro-

grams in the orm o ESL and GED or high school completion. About one-quarter o organizations oe

out-patient mental health and/or substance abuse services. And nearly 60 percent deliver some type

o amily or individual counseling to low-income persons.

IRS Data

To complement these survey data, this study analyzes inormation rom 2007 Internal RevenueService (IRS) 990 flings o registered nonproft social service organizations drawn rom the National

Center or Charitable Statistics (NCCS). Data are excluded or registered nonprofts determined to be

the national administrative headquarters o large nonproft organizations, advocacy organizations,

organizations that do not serve low-income populations, or organizations that only provide services

to low-income populations abroad. Appendix Tables A-2 through A-4 report the number o suburban

nonprofts serving local low-income populations operating in one o the ollowing felds: substance

abuse; mental health; employment assistance; ood assistance; housing; human services; children and

youth services; amily services; personal social services; emergency assistance; ethnic and immigrant

centers; and homeless centers (columns 1 and 2). These tables also report revenue data or registered


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nonproft organizations that are classifed in one o fve key social service program areas (columns 3

through 7).27

Census DataWe use data rom the 2000 Census and three-year data estimates rom the 2006-08 American

Community Survey (ACS) to provide the demographic context or our suburban study sites, including

racial and ethnic profles, poverty rates, and changes in the number o poor persons between 1999and 20062008. Appendix Maps A-1 through A-3 show three-year estimates o municipal poverty rates

rom the ACS.28

CaveatsWhile they provide useul insight into the contours o the nonproft social service sector, the data

used in this report have some limitations. First, the survey o providers is drawn rom a relatively

small purposive sample and fndings should be interpreted with that in mind. These survey data do,

however, fll gaps in publicly available IRS data. For example, not all nonprofts registered under social

service categories provide direct services. IRS data do not capture many o the smaller social service

organizations that provide assistance to low-income populations in suburban communities.29 IRS

categorizations o nonproft social service organizations are based on the primary substantive ocus

o programs and do not reect the many other service or program areas in which a nonproft might

operate. Nonproft data rom the IRS only contain location inormation about an organizations admin-istrative headquarters and not separate ofces where services may be delivered. We removed entries

or national administrative headquarters o large nonproft organizations located in suburban areas to

the best o our ability. Any nonproft revenue data reported by the IRS, however, is tied to the location

o headquarters, rather than where program unds may be spent. These IRS data, thereore, may miss

many large social service nonprofts that operate programs in suburban communities, but maintain

headquarters in a central city area. For all these reasons, IRS data may provide slightly imprecise

estimates o the scope o services and program resources available in suburban areas. Finally, it is

important to note that currently available ACS data do not capture the most recent demographic

changes occurring in our study sites.

Even with these caveats in mind, we believe this unique combination o data accurately captures the

challenges acing suburban saety nets nationwide. Not only are our fndings consistent across the

three selected study sites, but they also are consistent with the experiences o many suburban com-

munities as they cope with the long-term impact o the Great Recession.

Findings

A. Suburban jurisdictions outside of Chicago, Los Angeles, and Washington, D.C. varysignicantly in their levels of poverty, recent poverty trends, and racial/ethnic proles,both among and within these metro areas.The suburbs o these three metropolitan areas dier considerably in their demographic and economic

profles. For instance, Hispanics comprise more than 40 percent o the population in suburban Los

Angeles (Figure 1). Several suburban municipalities in Los Angeles, Riverside, and San Bernardino

counties are majority or near-majority Hispanic (see Table A-5 or detailed data). By contrast, most

suburban communities outside o Chicago are predominantly white, although municipalities such asCicero, Elgin, Aurora, and Waukegan have sizeable Hispanic populations (see Table A-6). Many sub-

urban Washington, D.C. communities have substantial black and Asian populations. Prince Georges

County, MD is nearly two-thirds black, whereas about 20 percent o the population in Alexandria and

Prince William County, VA is black. More than 15 percent o the population in suburban Fairax, VA and

parts o suburban Montgomery County, MD is Asian (see Table A-7).

These communities also exhibit diverse economic circumstances. County poverty rates range widely

rom 3.1 percent in Loudoun County, VA to 13.4 percent in San Bernardino County, CA, and to an even

greater degree across suburban municipalities (Figure 2). Similarly, there is no one trend in poverty

across time in these dierent suburban locations. Poverty rates declined during the middle part o


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the decade or suburban counties in metropolitan Los Angeles and increased or each county located

in suburban Chicago, while suburban Washington, D.C. showed more o a mixed, muted pattern. This

variation in suburban poverty rates may reect patterns o residential settlement, aordable housing,

and segregation, as well as proximity to the central city and high-poverty neighborhoods within the

urban core.

The recent acceleration in the suburbanization o poverty has also been uneven across and within

these metro areas. Tables A-5 through A-7 ag those communities that have experienced more than

a 25 percent increase or decrease in the number o poor persons between 2000 and 2008 to help

identiy suburban communities and their social service providers that experienced new stresses even

beore the onset o the Great Recession.30

In the Los Angeles region, the poverty rate is below 5 percent in the western San Bernardino County

community o Rancho Cucamonga, but double that in nearby Ontario (10.1 percent), and more than

our times as high in Victorville (19.6 percent) located in the mountains above San Bernardino (see

Table A-5 or detailed data). Victorville saw a 71 percent increase in the number o residents below

the poverty line between 2000 and 2008, while the poor population dropped by 19 percent in Rancho

Cucamonga and 47 percent in Ontario.

Similar variation in poverty trends can be seen in Chicago. The poverty rate in Cicero, an older,

predominantly Latino suburb west o the city o Chicago in Cook County, exceeds 17 percent. Poverty

rates within other inner-tier suburbs o Chicago are less than hal as high. Rates o poverty in Elgin,

Joliet, Waukegan, and Aurora exceed 10 percent, while many o their neighboring municipalities have

much lower poverty rates (Table A-6). Even though poverty rates remain well below 10 percent in mosto suburban Chicago, every suburban county and nearly every one o the largest suburban municipali-

ties saw dramatic increases in the number o poor in the 2000s. For instance, despite having poverty

rates ranging rom 5.0 percent to 8.4 percent, DuPage, Kane, McHenry, and Will counties all experi-

enced more than 40 percent increases in the number o poor residents rom 2000 to 2008.

Even in suburban Washington, D.C., home to some o the most auent communities and lowest

unemployment rates in the country, there are signifcant and growing pockets o poverty. Portions o

Montgomery County and Prince Georges County in Maryland, and Fairax, Loudoun, and Prince William

counties in Virginia, saw more than 40 percent increases in the number o poor rom 2000 to 2008,

with several municipalities experiencing more than a 50 percent increase (Table A-7).

Figure 1. Race and Ethnicity in Selected Suburban Counties, 20062008

Source: 2006-2008 American Community Survey

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Riverside

County, CA

San Bernardino

County, CA

DuPage

County, IL

Lake County, IL Will County, IL Montgomery,

MD

Prince

George's

County, MD

Prince William

County, VA

Suburban Los Angeles Suburban Chicago Suburban Washington DC

Hispanic

Asian

Black

White


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These fgures paint a brie but inormative portrait o the growing diversity within and among

suburbs in major metro areas like the three studied here. They suggest that, given the diverse start-

ing points o these communities, recent increases in suburban poverty have likely occurred against a

highly uneven backdrop o social service inrastructure. The next section examines the extent o that

inrastructure and how it compares with shiting suburban economic realities.

B. Suburban safety nets rely on relatively few social services organizations, andtend to stretch operations across much larger service delivery areas than their urbancounterparts.Though many suburbs have experienced unprecedented increases in their poor populations over the

course o this decade, social service program unding over the past 40 years has primarily targeted

urban areas, where poverty has been most concentrated and persistent. Likewise, private philan-

thropic support or the nonproft social service sector tends to target urban rather than suburban

providers.31 Thus, the capacity o suburban saety net and nonproft service providers has likely lagged

behind the dramatic demographic changes that have caught many o these communities by surprise.

Number o ProvidersConsistent with these expectations and the lower population densities in suburbs compared to cities,

suburban saety nets rely upon relatively ew social service organizations. In the three metro areas

studied, many o the suburban countieswhich are quite large in terms o both land area and popu-

lationcontain ewer than 100 social service nonprofts registered with the IRS. Most o the largesuburban municipalities alling within these counties are home to ewer than a dozen registered non-

proft social service organizations (see column 1 in Tables A-2 through A-4).

However, unlike their urban counterparts that typically interact with one municipal government and

one county government, many suburban social service providers stretch their operations over large

service delivery areas that oten cut across county or municipal lines. Thirty-our percent o nonproft

providers interviewed administered programs in more than one suburban county, and about 60 per-

cent administered programs in more than one suburban municipality.

In such an environment, jurisdictional ragmentation poses signifcant challenges or suburban ser-

vice providers. Such ragmentation makes it difcult to coordinate programs and services, potentially

Figure 2. Range in Poverty Rates Across Selected Suburban Municipalities, 20062008

Source: 2006-2008 American Community Survey

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Rancho

Cucamonga

San Bernardino Plainfield Cicero Burke College Park

Share

ofPopulation

in

Poverty

4.7%

24.1%

2.0%

17.3%

2.4%

26.8%

Suburban Los Angeles Suburban Chicago Suburban Washington DC


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creating programmatic redundancies and inefciencies. Moreover, the capacity and sophistication

o municipal governments varies across suburban areas; not all have the size, resources, or admin-

istrative leadership necessary to be supportive partners or local nonproft service organizations.

Implementing programs across even a handul o county or municipal jurisdictions can be quite

demanding, but the challenges are even more daunting or large suburban providers. For example, one

regional service provider interviewed served the 13-county suburban ring o Chicago, which contained

more than 600 cities, townships, and villages.32Ultimately, our survey respondents oten describe a thinness or ragility to the local nonproft sector

that makes it difcult to fnd partners or collaborators and better serve the changing needs o the

community. An executive rom an emergency shelter program in suburban Virginia noted the dilemma

created when demand exceeds capacity and there are no programs or reerrals. Her shelter is turn-

ing away 300 people per month . . . [which is a big problem because] were the only shelter in the area,

so we have no one to reer them to. Another suburban Los Angeles nonproft in our study receives

several thousand calls inquiring about emergency cash assistance each month, leading an administra-

tor to observe, the problem is that there are only two other agencies in this area that provide utility

or rental assistanceone o the major requests [rom clients]. Thus, even with organizations working

to fll gaps across multiple suburban jurisdictions, the relatively limited number o suburban providers

means that the assistance available to low-income households may be determined simply by where

they reside, with some suburban communities receiving a more generous or more balanced bundle o

social service programs than others.

Ratio o Providers to Poor ResidentsThe ratio o poor persons to nonproft service organizations, an admittedly crude measure o the avail-

ability o social service providers, underscores how nonproft service sector capacity diers between

and within suburban counties. For instance, the ratio o poor persons to nonprofts or counties in sub-

urban Washington, D.C. ranges rom 357 in Montgomery County, MD and 498 in Fairax County, VA, to

729 in Prince Georges County, MD and 1,338 in Prince William County, VA (see column 2 in Tables A-2

through A-4). Such variation also exists within suburban counties. For example, despite being located

in Cook County and having comparable numbers o poor persons, the poor person-to-nonproft ratio is

much higher in Skokie (1,274) than in Evanston (311).

There is also evidence that low-income residents o some higher-poverty suburbs may have less

access to nonproft social service providers than those in more auent suburban communities. The

ratio o poor persons to nonproft service organizations is much larger in the central city areas o

Los Angeles (1,981) and Chicago (1,240) and in higher-poverty suburban municipalities like Glendale,

CA (1,426), Joliet, IL (1,174) and Cicero, IL (3,648), compared to lower-poverty suburban communities

such as Rancho Cucamonga, CA (813), Naperville, IL (369), Alexandria, VA (303), and Bethesda, MD

(79).33

Nonproft Revenue per Poor ResidentNonproft revenue data rom the IRS provide another indicator o the availability o social service

programs across the suburban counties and municipalities studied. Table 1 charts nonproft revenue

per poor person across fve key social service program areas (substance abuse; mental health; employ

ment services; ood assistance; and human services) in selected counties.34 When looking at these

data, it is important to keep in mind that the presence o only one or two large nonproft service orga-

nizations can be enough to create signifcant variation in revenues per poor person between suburbancounties and municipalities. More detailed data are presented in columns 3 through 7 o Tables A-2

through A-4.

Several suburban counties in these metro areas, particularly those where poverty rates were very

low or many years, exhibit a relatively modest mix o programs (Table 1). For example, per-poor-

person revenue data suggest that human service nonprofts have a prominent presence in Will

County, IL ($717) and Prince William County, VA ($580), but ood assistance and employment service

nonprofts report only modest revenues per poor person in these counties.

Nonproft program resources also vary signifcantly within metropolitan areas and across neighbor-

ing suburban counties. Despite very similar demographic profles, nonproft revenues per poor person


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are much higher or substance abuse and ood assistance services in Riverside County ($265 and$171 respectively) than in San Bernardino County ($127 and $11 respectively). Yet nonprofts in San

Bernardino report more revenue per poor person in mental health services than those in Riverside. We

fnd comparable contrasts in suburban Chicago, where DuPage County reports much higher per capita

revenues across substance abuse and human service nonprofts compared to Kane and Lake counties.

Similarly, Prince Georges County, MD is home to only a ew nonprofts with modest per capita program

revenues, while Montgomery County, MD maintains a more robust nonproft service sector.

Even more variation in per capita nonproft revenue exists within suburban counties, with many

lower-poverty suburban municipalities reporting higher nonproft social service revenues per poor

person than higher-poverty suburban areas (Table 2). For instance, in San Bernardino County, Rancho

Table 1. Nonproft Revenues Per Poor Person in Selected Suburban Counties

Nonproft Service Revenue Per Poor Person

Substance Abuse Mental Health Employment Services Food Assistance Human Services

San Bernardino County, CA $127 $111 $4 $11 $164

Riverside County, CA $265 $15 $13 $171 $143

Lake County, IL $117 $0 $47 $11 $323

DuPage County, IL $773 $279 $43 $11 $895

Kane County, IL $60 $258 $40 $739 $262

Will County, IL $2 $2 $0 $3 $717

Prince Georges County, MD $52 $10 $645 $16 $189

Montgomery County, MD $54 $414 $101 $101 $627

Fairax County, VA $49 $2 $293 $8 $652

Prince William County, VA $0 $5 $0 $6 $580

Source: National Center for Charitable Statistics 2007

Note: Figures reported are rounded to the nearest dollar. Values of zero indicate no reported revenues. Service categories reect the following National Taxonomy of

Exempt Entities (NTEE) codes for registered nonprots: Substance Abuse (F20, F21, F22); Mental Health Treatment (F30, F32); Employment Services (J20, J21, J22);

Food Assistance (K30, K31, K35, K36); and, Human Services (P20, P22, P24, P26, P27, P28, P29).

Table 2. Nonproft Revenues Per Poor Person in Selected Suburban Municipalities

Nonproft Service Revenue Per Poor Person

Substance Abuse Mental Health Employment Services Food Assistance Human Services

Ontario, CA $107 $96 $0


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Cucamonga maintains much higher human service nonproft spending per poor person than neigh-

boring Ontario ($1,185 versus $14) where the poverty rate is twice as high. Likewise, some suburban

municipalities with comparable poverty rates maintain very dierent nonproft communities. Both

Elgin and Aurora in Kane County have poverty rates o about 11 percent, but the registered social ser-

vice nonprofts in Elgin report much higher per capita revenues across most service categories.

Most striking is the apparent absence o nonproft service providers across a number o program

areas in suburban municipalities. Figure 3 charts per-poor-person revenue o substance abuse, mental

health, employment service, ood assistance, and general human service nonprofts across 67 o the

largest municipalities in our suburban study sites. Reected in red is the number o municipalities

without registered nonprofts. The remaining segments sort municipalities by the size o nonproft

revenues per poor person in a particular area (see Tables A-2 though A-4 or detailed revenue data by

municipality).

It is striking that in each key program area, the bulk o municipalities studied have no registerednonproft service providers, or they are home to providers with relatively modest resources given the

number o poor persons in the community. For example, there were no substance abuse or mental

health nonproft service providers registered in almost two-thirds o the suburban municipalities exam

ined (41 and 42 o 67, respectively). Similarly, 55 percent o the suburban municipalities did not have

a ood assistance nonproft registered with the IRS. Even though there were more well-unded human

service nonprofts headquartered in these 67 suburban municipalities, 38 municipalities either did not

have a registered human service nonproft or had nonproft human service revenues under $50 per

poor person.

Particularly notable given the current employment crisis, 80 percent o municipalities did not have

Figure 3. Number o Registered Nonprofts in Selected Suburban Municipalities,

by Type o Service Provider and Size o Per-Poor-Person Revenues

Source: National Center for Charitable Statistics 2007

Note: Figures reported are rounded to the nearest dollar. Values of zero indicate no reported revenues. Service categories reect the following National Taxonomy of

Exempt Entities (NTEE) codes for registered nonprots: Substance Abuse (F20, F21, F22); Mental Health Treatment (F30, F32); Employment Services (J20, J21, J22);

Food Assistance (K30, K31, K35, K36); and, Human Services (P20, P22, P24, P26, P27, P28, P297).

Type o Nonproft Social Service Provider

41 42

54

37

27

10 7

4

18

11

86

77

8

66

3

8

26

2 2

13

0

10

20

30

40

50

60

70

80

Substance

Abuse

Mental

Health

Employment

Services

Food

Assistance

Human

Services

NumberofMunicipalities(N=67

)

$1000

$251 to $1000

$51 to $250

$1 to $50

No RegisteredNonprofits

Number of Municipalitiesby Size of Nonprofit

Revenues Per Poor Person


11/36


a nonproft employment service provider (54 o 67). Where providers did exist, they oten reported

revenues under $250 per poor person in the municipality.

While IRS data do not reect accurately the extent to which providers in one county or municipality

reach into others, these fndings are consistent with survey interviews and suggest that many sub-

urbs do not have the nonproft social service inrastructure necessary to address changing need and

rising poverty.

Sources o RevenueSurvey data indicate that suburban nonproft service providerslike those in central city areaspiece

together program unds rom a ew primary sources. More than eight o every 10 nonprofts received

unding rom government grants or contracts (Table 3). In addition, over 90 percent o nonprofts

reported unding rom either charitable philanthropic organizations or rom private individual giving

(cash or in-kind). Fewer than 15 percent o nonprofts interviewed received Medicaid reimbursements

or services and Medicaid composed only a small share o unding or most o those providers.35 For

the typical nonproft service provider surveyed, government grants or contracts account or roughly

hal o its operating budget, while charitable philanthropy and private giving contribute airly evenly

to make up the other hal.

Gaps in suburban social services may arise in part due to the challenges some ace in securing

sufcient public and philanthropic dollars given their large service areas. One administrator rom an

emergency assistance provider in suburban Maryland shared her eorts to raise support rom countygovernment in light o the act that many clients came rom ar outside the organizations immediate

community: Our county [and catchment area] extends to the ringe o DC. We had people driving all

the way rom there . . . we asked i county councilpersons are willing to help their constituents. They

havent been willing to pitch in, however. . . I give new clients outside o [our catchment area] the

number o their county councilperson and tell them to call.

An executive director o a large aith-based nonproft operating in suburban Los Angeles explained

the difculty organizations that operate inland rom the city o Los Angeles ace when trying to

access philanthropic support: the inland counties received one-tenth o the charitable giving

Table 3. Revenue Sources or Nonproft Suburban Social Service Providers Surveyed

in Metropolitan Chicago, Los Angeles, and Washington, D.C.

Receive Funding through Government Grants or Contracts 81.8%

0 to 25% o Revenue rom Government Grants or Contracts 29.0%



>75% o Revenue rom Government Grants or Contracts 14.5%

Receive Funding through Charitable Philanthropy 92.0%

0 to 25% o Revenue rom Charitable Philanthropy 53.0%



>75% o Revenue rom Charitable Philanthropy 7.6%

Receive Funding through Private Giving 96.0%

0 to 25% o Revenue rom Private Giving 67.1%



>75% o Revenue rom Private Giving 7.1%

N = 77

Source: Survey of Suburban Social Service Providers, 2010


12/36


relative to other areas in southern Caliornia. The point is that we have tremendous needs, but we

dont have the economic base to meet the need. We dont have a coast. In Los Angeles, where theres

a coast theres moneythats where CEOs want to live. Foundations, particularly local oundations, get

their money rom the local community.

Many nonproft service organizations stated that being located in suburban communities with corpo

rate partners and philanthropy was critical to sustainability and revenue diversifcation. Yet, many o

the nonprofts studied are located in suburban communities with ew potential corporate partners andew networks through which to connect to private philanthropy. As one nonproft director in a high-

poverty suburb o Chicago stated, the level o begging and groveling you have to do is just dierent

[here] because you dont go to church with those people or youre not in school with them. . . . We put

a lot more time and eort into it, and the ruit is just not there.

Suburban saety nets ace a number o structural challenges when seeking to address the conse-

quences o poverty and unemployment. The capacity o suburban saety net providers to address

shiting need varies signifcantly rom place to place. Many suburban communities have ew nonproft

organizations to reach those in need and those in place must cover large geographic areas, which can

oten orce clients to travel long distances to get help. Where one lives in the suburbs may thereore

dictate ones access to certain types o help. The data show that ew suburban communities oer a

broad range o support services at a level commensurate to local need or comparable to what might

be ound in urban centers. Such structural eatures o suburban saety nets are particularly salient

during economic downturns, but are likely to persist even ater economic recovery.

C. In the wake of the Great Recession, demand is up signicantly for the typical subur-ban provider, and almost three-quarters (73 percent) of suburban nonprots are seeingmore clients with no previous connection to safety net programs.On the heels o longer-running poverty growth over the decade, the Great Recession has urther

increased need across a wide range o suburban communities. Nine out o 10 suburban nonprofts

interviewed reported increases in the number o persons seeking assistance in the previous 12 months

About eight in 10 providers reported serving larger numbers o clients than a year ago. The typi-

cal nonproft reporting increases in demand or assistance has seen demand rise about 30 percent

between 2008 and 2009. However, nearly one-fth o nonprofts reporting an increase in help-seeking

indicated that they had experienced more than a 50 percent increase in the number o clients seeking

assistance during that time.

Not all increases in demand experienced by suburban saety net providers were the direct result o

layos and rising unemployment. Thirty-one percent o nonprofts interviewed indicated that they had

experienced increased demand or help due to program cutbacks or agency closures elsewhere in thei

community. Many nonproft service providers recognize that inquiries or assistance are driven in part

by caseload management choices made in other organizations. As one provider put it, most o our

programs get clients through reerrals. Were at the end o the chain o a series o decision makers. We

see things that are happening [in the community], but someone else is sending us the clients.

Client NeedsNot only is need increasing in suburban communities, but nearly all suburban nonproft service provid-

ers interviewed report that the needs o their client base have shited in response to the prolonged

economic downturn. Figures 4 and 5 chart the changing mix o needs and clients acing suburban

nonproft service providers. More than three-quarters o suburban nonprofts report seeing amilieswith ood needs more oten than a year ago. The incidence o other types o needs has risen as well,

with more working poor amilies seeking help with medical bills and instances o domestic violence.

Specifc issues related to unemployment are more apparent now at many suburban providers. Fity-

one percent o nonprofts interviewed reported seeing more clients seeking help fnding employment

compared to a year ago. Nearly 80 percent o providers also indicate that more and more clients are

seeking help ater having exhausted their unemployment insurance (Figure 5). One workorce develop

ment organization in suburban Chicago reported that the number o clients seeking assistance in the

past year increased ten-old rom 50 per month to 500 per month. As challenging, however, has been

the change in the type o client seeking helpa shit rom lower-skilled individuals to mid-to-upper


13/36


skill level, looking or unds to retrain and some networking opportunities. The lower-skilled individu-

als are not seeking services to the degree they had beore, because service centers are saturated with

dislocated workers collecting unemployment, [while] low-skilled workers may have exhausted unem-

ployment and are going to other social service organizations or help with basic needs.

Job loss and the collapse o the housing market also have made it difcult or many suburban

amilies to maintain their homes. Sixty-fve percent o nonprofts report more requent requests or

assistance paying utility bills and nearly 60 percent report more requent requests or help with mort-

gage or rent payments (Figure 4). Eighty (80) percent o providers report seeing more clients who

have been evicted as homeowners or as renters in a oreclosed property (Figure 5). Yet according

to providers in most suburban communities studied, there were ew aordable housing options or

low-income households.

Client ProfleThe types o persons or households seeking help have changed in the wake o the recession as well.

Seventy-three percent o nonprofts surveyed indicated that they are seeing many more clients with

no previous connection to saety net programs compared to the prior year (Figure 5). A suburban

ood bank manager noted that the organization was seeing dierent clients this yearpeople who

had been working 10 to 20 years that now don't have work. Such sentiments were echoed by an

administrator rom a small community-based organization outside o Washington, D.C. that providesemergency assistance and domestic violence services: we're seeing middle-class clients who are not

used to seeking services. We're seeing people who used to be donors who are no longer able to give

and are now seeking help.

Just as striking, 45 percent o providers report that many clients come rom households where one

or both adults are working, but cannot work enough to make ends meet. Another 41 percent indicated

that more two-parent households were coming or help compared to previous years. One executive

rom a suburban ofce o a large aith-based service provider in Chicago reected on the near-doubling

o clients served in the past year: the ace o the poor has changed, it is working amilies, people

that are working and somebody is working two jobs or moreand they still can't make ends meet.

Figure 4. Share o Nonprofts Reporting Increases in Client Needs Compared to Prior Year, by Type o Need Requested


0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

Food Needs

Paying Utility Bills

Paying Mortgage or Rent

Finding Employment

Finding Affordable Housing

Paying Medical Bills

Managing Debt

Incidence of Domestic Violence

Help for Alcohol or Drugs

TypeofNeedSeenMoreOftenthan1Yea

rAgo

Percentage of Nonprofit Organizations

78.4%

64.9%

57.3%

50.7%

47.3%

37.8%

28.4%

21.9%

19.4%


14/36


Few amilies seeking help or the frst time know much about government assistance or community-

based nonproft sources o support. Forty-fve (45) percent o nonprofts indicate that they are seeing

more clients who are eligible or government assistance such as SNAP or Medicaid, but have not

applied or such help due to lack o awareness or concern about stigma. A survey respondent in sub-

urban Chicago observed that, there is a new group o people who don't know where to go or help,

they are newly poor and don't know what to do.

Eventually, however, many such amilies do fnd their way to local nonproft organizations. A sub-

urban Los Angeles provider noted that they were serving more amilies that hesitate to seek help

right away; they don't know where to start. Were getting reerrals rom churches and schools, trying

to get individuals who've been laid o into the ofce sooner rather than later to get help with ood and

gas vouchers, so they can pay the rent or mortgage. An executive rom another suburban nonproft

organization described the uptick in client caseloads in the second hal o 2009: demand has really

increased in the last month and a hal. The people not accustomed [to] these services are becoming

amiliar with the act that there are services available; they are going to county [human service] agen-

cies and they are getting reerred to us. Delays in getting help, however, can exacerbate the economic

hardships aced by low-income amilies.

ImmigrationA growing share o needy individuals and amilies in these communities are oreign-born immigrants

or reugees. Forty (40) percent o nonproft organizations studied provide services or oreign-born

populations more oten than one year ago. Such trends are not surprising given recent increases in

oreign-born residents across suburban Los Angeles, Chicago, and Washington, D.C.36

The growing diversity o suburban communities poses a number o challenges or local saety nets.

While there are many providers serving immigrants, some suburban nonprofts see ew local service

organizations able to provide relevant services in a culturally sensitive manner. The director o a

suburban nonproft ocused on Hispanic immigrant populations stated, We are the only agency o our

Figure 5. Share o Nonprofts Reporting Changes in Type o Client Served Compared to Prior Year, by Client Characteristic


0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

Lost Home or Been Evicted

Exhausted Unemployment

Insurance (UI)

No Previous Connection to

the Safety Net

One or Both Adults in Household

Are Working

Eligible, but Haven't Applied

for Public Benefits

Two-parent Households

Foreign-born Populations

TypesofClientsSeenMoreOfteninPast

Year


80.3%

78.8%

73.2%

44.9%

44.8%

40.9%

40.0%


15/36


kind in the suburbs with a bilingual, bicultural sta tailored to the Hispanic community. We have people

coming to us rom [throughout the suburban metropolitan area]. For our immigration services they

come in rom Wisconsin and Indiana . . . There are no inter-agency coalitions among Latino-serving

or immigrant-serving organizations in the suburbs. A director rom another suburban organization

stated There are no other organizations with cultural/language delivery or Korean population [in

this region].

Such perceptions are maniest in the IRS nonproft data or our study sites. IRS revenue data ornonprofts registering as ethnic and immigrant service centers indicate that 11 o the 14 counties

studied have per-poor-person revenues o less than $50 or ethnic and immigrant service nonprofts.

Moreover, nearly three-quarters o the largest suburban municipalities in our study sites have no non-

profts registered as ethnic and immigrant service organizations. While many nonproft organizations

may work with immigrant communities and not register primarily as immigrant service organizations,

these data highlight the lack o resources specifcally targeted at one o the most rapidly growing

components o the population.

A ew nonprofts working with Latino immigrants also described concern about the potential impact

o anti-immigrant sentiment in suburban communities. One director reerred to an agency in a neigh-

boring suburb, whose main problem is that they have an organized anti-immigrant group [in their

community]. I dont know how [the agency] can work when there is a rally outside their door saying

they shouldnt help undocumented immigrants that they should all be deported and blocking und-

ing, going to the city councilThank God thats not happening here. Even i it is not overt, anti-immi-grant sentiment sometimes lies just beneath the surace. Upon completing a large und-raising event

in the community, this same director noticed a series o anti-immigrant comments posted on-line in

response to news coverage o the event. People were saying these undocumented should all go back

and they like everything or ree because theyre parasites, she said, Its scary. We know the senti-

ment is there.

Combined with the small number o organizations working with expanding immigrant communities,

the chilling eect that anti-immigrant sentiment can have on suburban social service organizations

is cause or concern. In addition to making it difcult or nonprofts to provide direct services to work-

ing poor amilies who are legal residents and citizens, it also makes it difcult or nonprofts to con-

duct outreach and serve as advocatesimportant components o their service missions to strengthen

immigrant communities and neighborhoods.

Provider ResponseSuburban nonprofts have adopted a number o dierent responses to cope with increased need amid

stretched program resources. For instance, 58 percent o nonproft providers have been reerring

a larger number o clients to other organizations in the community. In addition to actively reerring

clients elsewhere, nonprofts have juggled rising demand by turning away clients and limiting hours

when client intake can occur. A nonproft service organization in San Bernardino County that has

experienced signifcant increases in adult clients seeking help with employment, ood, and housing,

described the challenge o rising caseloads: weve had to turn away more clients than ever beore.

With the number o people calling or help, the only way to be really air is to set up a day o the week

when people can call in.

Another common strategy used to manage rising demand or help is to expand client waiting lists.

Hal o all suburban nonprofts interviewed reported placing larger numbers o clients on waitlists and

increasing the length o time clients must wait beore getting help. In such an environment it is notsurprising that nonproft service providers eel compelled to make determinations about the severity

o need across applicants or assistance. About two in fve nonprofts indicated they had to triage

clients in the past twelve months, prioritizing those with more severe or acute needs. One respondent

explained, This is why our client numbers remain the samemore people are seeking services, but we

can only help a certain number. A nonproft operating emergency assistance and employment-related

programs in northern Virginia explained, We have not turned anyone awaybut there are waitlists or

certain programs. This same provider later noted that anyone who has emergency needs is seen, but

other programslike our sel-sufciency programhave lengthening wait times.

D. Almost half of suburban nonprots surveyed (47 percent) reported a loss in a key


16/36


revenue source last year, with more funding cuts anticipated in the year to come.The Great Recession has weakened both public and philanthropic sources o revenue, as well as indi-

vidual donations, depressing unding or many nonproft organizations right as demand or services

increased. Most state governments, critical sources o unding or social service programs, are acing

historically unprecedented budget defcits. For example, Illinois aces an estimated $14 billion def-

cit, while Caliornia is grappling with an $18 billion defcit. Each state has cut social service program

unding by several billion dollars in the past year and more signifcant cuts are expected in the coming

year. Although substantial, defcits in Maryland ($2.8 billion) and Virginia ($3.6 billion) are smaller by

comparison, but will likely lead to cuts in social service program unding.37

Since the start o the recession, many suburban nonprofts have experienced annual cuts to their

program unding. As Figure 6 shows, no one source o unding is more durable than another. About

one-quarter o suburban nonprofts reported decreases in Medicaid reimbursements; government

grants and contracts; grants rom charitable nonproft organizations and oundations; and private

giving in the past year. Because nonproft service providers typically draw on multiple sources o und-

ing, the accumulated impact o cuts across unding areas is signifcant. Nearly hal o survey respon-dents47 percentreported a drop in unding rom any one o these our key revenue sources in the

last fscal year.

Such fgures are consistent with other recent studies o the nonproft sector. For example, oun-

dation unding to human service nonprofts ell by nearly 13 percent in 2008 and overall giving by

oundations declined by about 8 percent rom 2008 to 2009. 38 One national survey o education, arts,

culture, and health and human service nonproft organizations ound that about 60 percent expected

government revenue to decline in 2010, and 55 percent expected unds rom charitable oundations to

decline.39 In another survey o the nonproft sector in metropolitan Chicago, 62 percent o respondents

reported cuts in public unding, requently due to delayed payments by the State o Illinois. Sixty-eight

Figure 6. Share o Suburban Nonprofts Reporting Revenue Cuts in the Past Year, by Type o Revenue


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Any Revenue

Source

Private

Giving

Support from

Philanthropic Orgs

Government

Revenue

Medicaid

Revenue

PercentageofNonprofitOrganizations

Type of Revenue Cut

46.9%

25.9%25.8%23.2%

22.2%


17/36


percent (68) reported reductions in charitable philanthropy and 53 percent decreases in individual

giving.40

Although a handul o providers in our surveys reported substantial cuts in unding, most o the

reductions in program unding reported were less than 10 to 15 percent in the current year. In many

instances, however, lost unding has been difcult or suburban social service nonprofts to replace.

Less than 40 percent o providers who reported cuts in one source o unding were able to fnd addi-

tional unding rom another source. Moreover, many nonprofts indicated that decreased unding had

become an annual event. Even annual cuts o 10 to 15 percent add up quickly over the span o two to

three years.

Responding to Current Funding CutsLower levels o unding have orced many nonprofts to curtail programs or scale back operations in

the ace o alling revenues and rising demand (Figure 7). Almost 22 percent have reduced services

available since the start o the recession and 13 percent have actively cut caseloads. One suburban

emergency assistance provider described howwhen one o the fve or six providers oering help withood or bills has no unds to disbursethe county government coordinates reerrals or services: They

periodically put out a map to indicate which saety net organizations are responsible or which part

o the county. We had a run on our services last November. We cut back on emergency assistance we

gave to each client, but didnt cut back on number o clients served.

Another provider located in northern Virginia, exhausted by the stress the recession has placed on

their organization, confded, The question keeping me up at night is how much longer we can keep

increasing our services at [the] expense o our sta. Our caseloads have doubledand tripledand

we're doing more with less. I do a lot o begging to get donations or our ood pantry, or example. And

donations have increased, but not to match demand. I eel like we're teetering.

Figure 7. Share o Nonprofts Undertaking Selected Responses to Revenue Cuts in the Past Year


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Reduced FT or

PT Staff

Reduced

Services Available

Reduced

Clients Served

Reduced

Salaries

Reduced Hours

of Operation

Pe

rcentageofNonprofitOrganizations

Response to Revenue Cuts

28.4%

21.7%

13.3%

11.7%

10.3%


18/36


Twenty-eight (28) percent o nonprofts have laid o ull-time and part-time sta as a result o lost

program grants or to reduce operating costs. Such strategies are oten part o broader cost-cutting

measures that nonproft service providers pursue in times o severe fscal austerity. A director o a

suburban youth and amily nonproft discussed eorts to reduce overhead: [We] closed one site to

save money on acility costs and brought that sta down and merged them into the administrative

ofces. We closed another site because o transportation and acility costs, so we cut services. But, we

tried to match those kids into other programs. Havent flled open positions. Sta took a 10-percentsalary cut in late 2008 to make it through fscal year.

A nonproft executive noted that the organization roze some wages at two points last year. All

executives took a cut in pay, 15 percent. We elected to do that. In some o our programs we cut out

a phone line, or eliminated a high-speed internet line, trimmed down on janitorial sta, et cetera.

Underscoring the tone o many discussions we had with nonproft providers, a senior administrator

rom a suburban ofce o a well-unded national network o aith-based service providers admitted,

We have a waiting list or utility assistance and we closed our child care ofce. We have no money or

rent or water bills. Were reallocating resources away rom social services to pay or building upkeep,

salaries, overhead costs.

Lost program unding does not reect a lack o undraising eort or most suburban nonproft

service providers. They appear to be working harder than ever to identiy potential program resources

A aith-based service provider serving multiple suburban counties explained, we've never been

so aggressive as we have been this year [sending out letters o inquiry to oundations], and have hitalmost nothing. Our problem is not our accountability, longevity, or reputation, but so many o the

responses say we can't und your request because we don't have enough money. The rule o thumb

was that you get one hit or every 10 attempts. Now it's one in 20. Many o them are saying because o

hit on interest income they're not taking on new projects or agencies. That's really painul. Foundation

and corporate money is really dierent oundation or corporate dollars give nonprofts room or

creativity and ingenuity. When that goes away, we might become mini-government ofces dispensing

government unds. We lose our identity as an organization. Not only do unding losses jeopardize

programming and the availability o assistance to low-income populations, they also can compromise

the integrity and mission o nonproft organizations.

Impact o the American Recovery and Reinvestment ActSome nonproft service organizations have been able to access unding rom the ederal stimulus

package, or American Recovery and Reinvestment Act (ARRA), but the degree to which nonprofts

receive such support has depended on whether they were amiliar with ederal unding applications

and whether they oered services that stimulus unds targeted.

In some instances, ARRA created new lines o unding and new opportunities to serve low-income

populations. Several providers mentioned the importance o stimulus unds or Homelessness

Prevention and Rapid Re-Housing Programs (HPRP). A large suburban aith-based service provider

in suburban Los Angeles explained that the organization had been able to obtain some stimulus

money and additional Emergency Food and Shelter Program (EFSP) unds, so we have been able to

help more people than ever. Another suburban southern Caliornia service provider working with

Latino youth noted the importance o ARRA unds: Because o ederal stimulus money we were able

to provide additional programming this past year or job-seeking youth. We expect to see more money

earmarked or workorce development and green jobs [in the coming year].

For other suburban providers, ARRA dollars have helped to soten the blow o other governmentprogram cuts. A nonproft executive working in the southwest suburbs o Chicago noted that und-

ing rom ARRAreplaced other sources o unding. Amounts have decreased but not as severely as

would have occurred [without ARRA unds]. A suburban Washington nonproft that oers a range o

services or low-income children and amilies noted that it received ARRA unds that exceeded other

program unding cuts by nearly two-to-one. Yet ARRA unds are not ungible and must be targeted to

specifc program areas. In the case o this suburban provider, ARRA unds to expand Early Head Start

were welcomed, but let the organization searching or ways to adjust to across-the-board cuts in its

other core programs.

In the end, ARRA may have only temporarily delayed important shits in the landscape o social

The question

keeping me up

at night is how

much longer

we can keep

increasing our

services at [the]

expense of our

staff. Our case-

loads have

doubledand

tripledand

were doing

more with less.


19/36


service unding. A provider located in metropolitan Los Angeles noted that, I anticipate at the end

o the fscal year that we'll have more ederal money than we've ever had, and less state money than

we've ever had. That will be our government unding reality. We'll pick up unding rom local govern-

ment as pass-through money rom the ederal government. Since ARRA unds expire in the coming

year, however, social service agencies that have received stimulus dollars will be orced to fnd replace-

ment unding rom public or private sources, or again ace tough decisions about program cuts.

Opportunities, Diversifcation, and Strategic PlanningEven though many suburban saety net providers appear to be struggling to meet need and maintain

operations, not all providers have experienced the recession similarly. Many nonprofts have seen the

recession as an opportunity to expand their mission or tap into greater local interest in philanthropy

or the poor.

Revenue diversity, planning, and proximity to wealth in the immediate area have helped some

organizations weather tough economic times. Indeed, about one-quarter o the nonprofts interviewed

reported a net increase in public unding or charitable giving in the previous year. As one ood bank in

an auent Maryland suburb o Washington, D.C. put it, More money, more clients, more ood. A non-

proft in a neighboring suburban community echoed this experience, Any time the economy tanks, our

unding drops and demand goes sky-high. But, we're sort o insulated because we get so many in-kind

donations. We had budgeted $250,000 or last year [in private giving], but got $290,000. Another

nearby suburban organization working with immigrant youth anticipated that the recession wouldimprove its access to public unding: We expect an increase in government unding in the coming year

because smaller nonproft organizations are dying o and making us more competitive or grants.

Thoughtul strategic planning has allowed some suburban nonprofts to better adjust when the

recession hit. One executive explained, We were trying to be proactive [when the recession hit], so we

did a 5 percent reduction across all programs. We roze positions and closed an anticipated $200,000

defcit by holding positions vacant. Such strategic planning also came with cuts to programs and sta

benefts, as the organization cut direct assistance to clients, [and] cut some employee benefts. We

have a $50,000 surplus now as a result. We drew up scenarios or 10 percent and 20 percent cuts,

which helped us to position or the unknown.

Some nonprofts that did not rely upon public unding have weathered budget cuts, particularly

in suburban Los Angeles where one provider stated that, during the mid-year county [budget]

reduction, many providers who were counting on unding had to close doors or reduce client loads.

We're picking up whatever we can. We're in an interesting spot because we had not used [government

unds]. Weve expanded hours, hired new sta, increased salaries.

Responding to Future Funding CutsDespite signs o economic recovery, many suburban nonproft providers anticipate difcult times in

the year ahead. Apart rom the immediate crises created by the recession, nonproft service organiza-

tions are operating in an uncertain fscal environment, particularly with regard to state unding and

persistent budget defcits. In April 2010, 66 percent o nonprofts indicated they were anticipating

reductions in government unding. Forty-seven percent expected revenue rom charitable nonprofts

and oundations to all in the coming fscal year and almost one-third expected individual donations

to decline.

The impact o unding cuts and uture fscal uncertainty is clear rom the survey data. Providers

were asked about measures they are considering or the coming year at two dierent points in timeonce in June 2009 and again nearly a year later in April 2010 (Figure 8). Whereas 28 percent o

nonprofts interviewed in June 2009 reported considering cutting back on services oered, 33 percent

indicated they were considering doing so in April 2010. Similarly, 21 percent were weighing reducing

client caseloads in June 2009, compared to 28 percent in April 2010. The biggest dierence was in the

share o nonprofts expecting sta layos, which rose rom 33 to 42 percent.

Perhaps partly due to a decline in the number o places to send clients, a smaller percentage o

nonprofts anticipated reerring clients elsewhere because o a lack o capacity in the coming year

(61 percent in June 2009 versus 46 percent in April 2010). The percentage o organizations indicating

they were considering expanding client waitlists ell rom 44 percent in June 2009 to 36 percent in


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April 2010, one small indicator that nonproft service providers may be beginning to see a drop-o in

demand.

In addition, compared to a year ago a much smaller share o suburban nonproft organizations are

contemplating more drastic measures. While nearly 20 percent o organizations interviewed in June

2009 indicated they were considering opportunities to merge with other organizations, only 9 percent

reported weighing such options today. The percentage o nonprofts indicating it was possible that

the organization would close altogether in the coming fscal year ell rom 9 percent in June 2009 to

less than 5 percent in April 2010. Moreover, only a small percentage o nonprofts in our study cur-

rently are considering the possibility o reducing salaries (16 percent) or reducing hours o operation

(14 percent). Such fndings reect the deep cuts already made and the limits to what can be done totrim overhead moving orward. According to one director working in the suburbs o Chicago, the

only thing we can cut this year is salaries . . . all non-salary overhead and operating costs have been

stripped to the bone.

Figure 8. Changes in the Share o Nonprofts Considering Selected Measures to Respond to Revenue Cuts and Recession,

June 2009 versus April 2010


0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Anticipate Closing Down

Merging with AnotherOrganization

Reducing Number ofClients Served

Reducing Hours of Operation

Reducing Salaries

Reducing Services Available

Reducing FT and/or PT Staff

Expanding Waitlist

Reducing Overhead Costs

Prioritizing Clients byDegree of Need

Referring a Greater Numberof Clients Out

TypeofActionCurrentlyBeingConsideredforComingYear


June 2009

April 2010


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Conclusion

Our examination o suburban communities outside o Chicago, Los Angeles, and Washing-

ton, D.C. reveals suburbs to be quite diverse in terms o poverty, racial and ethnic compo-

sition, and saety net characteristics. Over the course o the last decade, many suburbs

have experienced unprecedented increases in their poor populations, yet the nonproft

social service sectorso critical to providing help to the poorhas oten lacked the capacity to keep up

with these demographic shits.This analysis underscores the act that ew suburban communities oer a broad range o support

services at a level commensurate to local need or comparable to what might be ound in urban cen-

ters. Several suburbs exhibit quite high poor person-to-provider ratios and low per capita unding, and

more than hal the municipalities in our study did not have any registered nonproft service providers

in many key service areas. In addition, the Great Recession has exacerbated demands on an already

strained suburban social service inrastructure. All suburban nonproft service organizations inter-

viewed reported increased demand or help and expanded client caseloads rom a year or two ago,

and or a signifcant share o these nonprofts, rising demand or services has coincided with program

unding decreases, which have led to sta cuts and the reduced availability o services.

The absence o nonproft service providers or the presence o inadequately resourced nonprofts

will make it difcult or communities to respond to rising need and continued changes within subur-

ban labor markets, even ater local economies recover rom the recent downturn. To the extent that

nonproft organizations cannot sustain unding or replace lost unds, many may be orced to closeprograms and doors. Suburban amilies in need will have a harder time fnding help, possibly leading

many to experience more serious economic hardship. Not only is there the prospect o less saety net

help or low-income populations in the near term, but also there may be ewer sources o support in

uture years.

The composition o already strained suburban saety nets may change signifcantly in the coming

years, particularly i there are not eorts to strengthen revenue ows, improve delivery o social ser-

vices, and cultivate shared, regional approaches to service delivery. Overall, suburban saety nets run

the risk o becoming reliant on ewer organizations that will continue to be under-resourced even as

they take on responsibility or assisting more low-income amilies. To strengthen suburban saety nets,

thereore, communities will be challenged to overcome problems o both resources and perception.

PerceptionOne critical step toward strengthening suburban saety nets is or local leaders to be more proactive

in defning community needs and in educating residents about the work o local nonproft service

providers. Such eorts not only build support or maintaining or increasing public commitments to

social service programs, but also may help attract private philanthropy. As one suburban Washington

nonproft described its eorts to increase private unding, it depends on how we market ourselves

and the services we provideand how we realistically tell the story o what's going on. We try to be

as compelling as possible. A respondent in suburban Chicago reerred to the process o defning an

independent brand, which involves convincing suburban residents o the need in their own communi-

ties in order to capture unding that otherwise might be directed to more traditionally impoverished

areas in central cities.

Collaboration

Several suburban saety net providers described building collaboration as one strategy to develop newand more sustainable program resources. A large nonproft organization in suburban Los Angeles has

worked to cultivate collaborative relationships with other local organizations as a way to provide bet-

ter quality services to clients. In doing so, this organization has strengthened partnerships with other

businesses and organizations to maximize delivery o services and assistance to clients. Similarly,

a large number o suburban Chicago agencies are participating in a call center that connects low-

income suburban amilies to rent and utility assistance. The call center has dramatically streamlined

the process or distributing fnancial resources to those in need, which has allowed program dollars

to stretch arther than beore.

The only thing

we can cut

this year is

salaries

all non-salary

overhead and

operating costs

have beenstripped to

the bone.


22/36


Other suburban organizations are attempting to co-locate services to make it easier or clients to

access a range o supports and reach more people within existing program resource levels. A relatively

large agency in Maryland states: We partner with a large number o other non-profts, and work to

attract complementary services into our ofce complex. We currently have ten other NGOs [non-

governmental organizations] here either ull- or part-time. Clients are able to access mental health,

primary care, emergency assistance, ood, clothing, and transitional housing rom the providers here.

Many o the agencies in our study spoke o building ties to local and non-local institutions in orderto recruit or dispatch volunteer workers. For example, an agency providing services to amilies in

Montgomery County, MD collaborates with community colleges and graduate programs to recruit

interns. Other organizations we interviewed are relying more heavily on Americorps volunteers or

what one director termed non-proessional program delivery. One employment-related agency in

suburban Chicago reported that they set up a volunteer network or the unemployed individuals to

keep them engaged and gaining skills while they are looking or new employment opportunities.

InclusionFostering a more inclusive environment or working poor immigrant amilies is another particular chal-

lenge and imperative or suburban nonproft leaders. Building alliances and coalitions with local law

enorcement, politicians, community-based organizations, and immigrant-serving organizations are

all potential steps toward creating such an environment. One provider in suburban Chicago described

a new initiative meant to link organizations to provide a broader range o services or immigrants.Nonprofts also can work to change perception by building leadership capacity within immigrant and

minority communities. Another suburban nonproft executive described a Latino coalition in the

communitythere are banks and libraries and other agencies like churches, and attorneys. We meet

once a month [to discuss emergent issues concerning the Latino immigrant community.] One sub-

urban provider points out that in her community, there are no Latino trustees, no Latinos on the

school board, theres no Latino leadership. As a result she has begun to heavily recruit Latinos rom

her community to serve on the board o her organization and get involved as volunteers.

Problems o perception are key, but difcult to address in the case o immigration and saety net

assistance. One suburban Chicago provider discussed ways to communicate what services or immi-

grants mean or the community and society: It helps or people to see what were doing [or local

immigrants] and that it makes a dierence. . . . So we try to eature those success stories, like the

person who got her GED and now has a better job and can better help her amily. We try to market our

eorts to show that they make a dierence in the community.

Social EnterpriseAlthough the Great Recession has exposed the vulnerabilities o suburban saety nets, or some ser-

vice organizations there may be growth opportunities in emerging program or business areas. Several

nonprofts reported pursuing social ventures that would fll unmet community needs and generate

new revenue streams. For some this meant starting a new social enterprise or a ee-based program,

such as a market-rate daycare center. A suburban Los Angeles nonproft noted that there were many

opportunities to develop social enterprise ventures outside o cities because there were not many

entrepreneurial nonprofts. This particular organization was operating catering or a cause and was

exploring social enterprise opportunities in real estate.

A Regional ApproachTo reduce ragmentation across the local saety nets in metropolitan areas, ederal and state govern-

ment could support eorts to build and strengthen the capacity o regional institutions. One way to

do so would be to develop a Promise Regions competitive grants process comparable to the educa-

tion innovations emerging rom the Promise Neighborhood grants competition. A Promise Regions

initiative could provide planning grants to local intermediary organizations charged with ostering the

development o regional strategic plans to better coordinate social service programs across metro-

politan space. Promise Regions could motivate state and local governm

suburban poverty_brookings 2010

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