Funding Faith-based & Secular Nonprofit Service Providers
In today’s Washington Post, Jacqueline Salmon discusses how the recession has created daunting funding challenges for faith-based social service organizations:
Faith-based charities, which provide an enormous array of private social services to the nation’s sick, elderly and poor, are facing unprecedented cutbacks from one of their biggest funders: the government.
Given that nonprofits helping low-income populations meet basic material needs, find work, or improve personal well-being rest at the core of our safety net, it is important to understand how the current crisis is having a sharp destabilizing effect on the sources of support that more and more Americans are turning to for aid.
This Washington Post piece cites a few data points from my recent book Out of Reach: Place, Poverty, and the New American Welfare State, which examines interviews with almost 1,500 government and nonprofit social service agencies. I found that most nonprofits - faith-based or secular received some type of funding from government sources. Secular nonprofits, in particular, draw quite a bit of funding from government grants, contracts, and fees for services. About 40 to 50% of secular nonprofits are dependent upon public funding streams for at least half of their budgets. (Click here to view related papers and reports).
Faith-based service providers, contrary to popular impressions, also receive quite a bit of public funding. In metropolitan Washington, D.C., for instance, 35% of faith-based service organizations that I interviewed reported receiving government funding of some kind. Similar findings emerge in other urban and rural locations that I’ve studied.
Nonprofit service organizations - secular and faith-based - have become important partners in the delivery of government safety net programs, so it is no surprise that many receive public funds and many are hurt when government programs are cut. Reliance upon public funding sources also reflects the modest amounts that Americans give to charities that work with poor populations. Americans gave about $300 billion to charities in 2007, but less than 10 percent was targeted at social or human service nonprofit organizations (Giving USA 2008).
What the article didn’t report was that my data indicate there is substantial volatility in funding even during relatively good times. Interviewing providers between 2004 and 2006, I found that roughly one-third to one-half of faith-based and secular nonprofits experienced a recent decrease in program funding. About 7 of every 10 organizations reporting a decrease in funding also reported reducing staff, caseloads, and program offerings as a result. Figures for today certainly would exceed these striking numbers. Ensuring strong public and private support of the critical nonprofit components of our safety net, however, will be important if we are to help families cope with the recession and if we are to help people return to work soon.