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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.

As the recession deepens and unemployment rises, we can expect more and more working Americans will become poor. Families experience need in many ways: trouble finding a job, difficulty paying the mortgage or bills, struggling to have enough food. How do we as a country help working poor families today? The answer may be surprising.

Instead of depending primarily on cash assistance programs to help the poor – as the conventional wisdom supposes – most assistance we provide to the poor comes in the form of social supports that help with job search, address material needs, and promote greater self-sufficiency. This system of social service supports, however, will be severely tested in the coming months as funding from government and nonprofits decreases, and as the agencies operating programs become more vulnerable. If we are to meet the economic challenges ahead, we must have a reality-check in our discussions of safety net assistance and have accurate impressions of how we help the poor and the challenges that programs face in our communities.

While cash assistance programs are important sources of support, our safety net largely is oriented to the provision of employment services, child care programs, treatments for mental health or substance abuse problems, and help with basic food or housing needs. In a recent study, I estimate that for every $1 we spend on welfare cash assistance, we spend some $15 dollars on service programs that help millions of working poor adults provide for basic material needs and reach higher rungs on the job ladder. Even though most of these social service programs are funded by government, quite often they are delivered through nonprofit organizations that complement public dollars with private donations and volunteers.

Ironically, government funding for social service programs is cut during economic downturns and times of tight budgets.  In the State of Illinois where I live, for example, a nearly $3 billion potential deficit is forcing officials to contemplate substantial cuts in funding and staff to an array of programs serving low-income populations. Similar stories can be found in all states and communities. Rollbacks in private philanthropy to social service agencies also are a likely possibility in the coming months, as foundation endowments and private donations are battered daily by volatility in the economy.

The potential impact of these cuts can be drawn from research I recently published that examined how social service agencies coped with the economic downturn of the early 2000s. Based on interviews with nearly 1,500 service organizations, I found evidence of profound instability and turmoil in our local safety nets in the years following that downturn. About 30% of agencies listed in community directories were no longer operational or offering programs for the poor. Of those still operating programs, about 40% of public and nonprofit agencies reported recently losing at least some of their program funding. Even more troubling, of those that lost funding, 70% reported cutting services, staff, and/or caseloads as a result. Given the depth of today’s economic distress, we might expect these numbers to understate the current challenges confronting community-based agencies that serve the poor.

Although my research suggests a tough road ahead, there is a lot we can do to strengthen our system. Our political leaders must resist the temptation to cut programs and at a minimum should maintain public funding levels for social service programs. We can help to better connect working poor families – many who are seeking help for the first time – to existing programs and resources nearby their homes. In addition, individuals energized by the spirit of volunteerism in the recent presidential election should direct time, advocacy, and fundraising to local nonprofit agencies that assist those in need. Even if concerned citizens give only a few dollars or a few hours per week, we could channel hundreds of billions of dollars in donations and millions of volunteer hours to nonprofits that help the most vulnerable Americans.  To be sure, we cannot replace public funding for the safety net with volunteers and $10 donations; rather these private commitments are essential to strengthening the nonprofit sector on which the public safety net rests.

The stakes are high.  If we do not adequately support public social service programs and the nonprofits that often deliver those programs in the coming months, not only will a poor child go to sleep without enough to eat this winter or an unemployed adult will struggle to find work to support their family, it will mean that next year poor persons will have fewer and fewer agencies to turn to for help.