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Human Services Organizations Strained, New York City Study Shows

Resource Center - Foundation

(Sept. 15, 2009) A recent report released by the Human Service Council (HSC) and Baruch College: School of Public Affairs shows that the majority of human services organizations in New York City are seeing major decreases to public and private funding due to the economic recession.

According to the report, more than 60 percent of organizations surveyed have seen decreases in public funding with more than 50 percent experiencing major cuts to existing contracts with government at all levels—city, state and federal.

Furthermore, 80 percent of respondents also said they are experiencing major reductions in private funding with more than half seeing reductions of more than 20 percent. Furthermore, 73 percent of the organizations have no financial reserves—no endowment or lines of credit—with which to weather the uncertain economic climate.

Delays in government reimbursement, growth in expenses, and lack of full funding for the real costs of services exacerbate the decrease in public funding, the report shows.

“On a broad level, this is the worst scenario for human services organizations,” said Michael Stoller, executive director of the Human Services Council. “There’s less government money because there are less taxes and there’s less foundation and personal giving because of the uncertainty in the market. Yet, the number of human service clients keeps increasing as poverty levels go up and these organizations are trying their best to help those who have nowhere else to turn.”

Staff and Benefit Reductions

The majority of responding organizations (53 percent) have laid off staff in the past year. Sixteen percent of the organizations lost more than 15 percent of their workforce. In addition to laying off staff, respondents are reacting to the decreases in their financial resources by reducing planned salary increases (60 percent), using attrition to cut staff (45 percent), implementing hiring freezes (45 percent), reducing employee retirement benefits (25 percent), and reducing health care and other employee benefits (24 percent).

About the Survey

The report is comprised of responses from 244 organizations, representing a 30 percent response rate. The respondents represent a diverse cross-section of human services organizations. The median responding organization serves between 2,001 and 5,000 clients, has a budget of $2,000,001 to $5,000,000, and provides direct services in New York City.

The full report is available at www.humanservicescouncil.org



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