Spotlight Exclusives

Community Nonprofits Are Our Insurance Policy for Families

Douglas Steiger Douglas Steiger, posted on

The hope that American politics would return to a more normal condition after the 2020 election was in vain.  Even after the events of January 6th, Donald Trump remains central to Republican politics and may be the party’s candidate in 2024.  The extreme polarization of our politics appears likely to continue for years to come.

With our politics so bitter and divided, our reliance on states for operating programs for families has become more challenging.  The fate of the Medicaid expansion in the Affordable Care Act is a preview.  Despite obvious benefits of adopting the expansion, a dozen states continue to resist for what appear to be largely political reasons.  If, hypothetically, a Romney administration had achieved a similar expansion of health coverage, would conservative governors and legislators have been so determined to oppose a policy that, among other things, assists rural hospitals?

We will see a mirror image rejection of federal initiatives should the balance of power shift in Congress after the 2024 elections.  States like California and New York will refuse to implement policies related to immigration or abortion in federal programs they run.  State Attorneys General now routinely sue to stop federal policies when the president is of the other party.  Instead of adapting programs and policies, state policymakers are moving towards just saying no – or insisting on changes the other party sees as contrary to a program’s purpose, such as Democratic resistance to the Trump Administration’s promotion of work requirements in Medicaid.  Meanwhile, American families are struggling and there will be a continued need – and pressure – to do more and better by them.

For progressives (and perhaps Senator (Mitt) Romney (R-Utah)) this stalemate argues for emphasizing direct federal assistance to families, such as the expanded Child Tax Credit.  Conservatives will likely have federal tax proposals of their own when they next control Washington policymaking.

There is another approach to dealing with this stalemate—community-based nonprofit organizations, such as food banks, community health centers, and Community Action Agencies.  They assist families all over the country in ways that do not necessarily depend on state or federal programs, though they often tap those resources in their work. Federal policies that bolster such street-level organizations may even find bipartisan support, given their local roots and ties.

These nonprofit organizations can connect families with supports provided by state agencies, such as assisting with complicated applications for governmental programs.  Many offer direct aid of their own, such as with food or housing.  These organizations also can be effective in reaching marginalized communities, such as immigrants, whether to enroll their children in Head Start or to ensure they receive tax benefits for which they are eligible.

This is not a novel insight. The role that the 1,400 community health centers across the country have played in providing vaccinations to underserved populations is reflective of their broader role in ensuring access to health services. Food banks play a similar role for nutrition and they too stepped up during the pandemic – providing 6 billion meals during 2020 alone.  Head Start, provided through a mix of nonprofit organizations and local school districts, enrolls about 1 million children per year. There are Community Action Agencies (CAAs) in virtually every American county, offering a mix of help, depending on their resources and the needs in their area.

However, the financing of this social infrastructure was under pressure even before the pandemic.  As Tim Delaney of the National Council on Non-Profits put it in a recent Washington Post article, “All the data shows pre-covid a lot of nonprofits had not recovered from the Great Recession.  Demand for services was up before the pandemic in three-fourths of the states.”  Meanwhile, the 2017 tax law raised the minimum deduction level for charitable contributions and 21 million fewer taxpayers took the credit, though the overall impact on donations to nonprofits that support families is not clear.

Some community-based organizations receive direct federal help.  Community health centers receive substantial funding as well as payments from Medicaid and Medicare for services they provide.  The federal government supports food banks through commodity distribution.  CAAs receive base funding through the Community Services Block Grant.

We need more focus on federal policies that support these community organizations, especially now when national political conflicts are infecting federalism.  Additional direct federal funding for those that receive it is an obvious step — and not just the emergency resources they received as part of the pandemic response.

But more creative policy approaches should be considered.  Are changes needed to the deduction for charitable giving?  Are there additional types of federal “in kind” aid to nonprofits that could be provided or current types, such as the commodities provided to food banks, that should be expanded?  For example, is the requirement that “suitable” surplus federal property be made available to house the homeless in need of updating or expanding?  AmeriCorps members can increase the staffing at community organizations that support family economic security, such as food banks.  Would an increase beyond the current level of about 50,000 members make a real difference at the community level?  I don’t have the answers but believe we need a concerted effort to consider policy options.

At a fundamental level, it is time for a comprehensive strategy to support these community nonprofit organizations to ensure American families keep getting help as we struggle through these challenging times for our politics – and our economy.  They represent an insurance policy for families until our federal politics and policymaking become more functional.

Douglas Steiger was deputy Assistant Secretary for Legislation at the Department of Health and Human Services during President Barack Obama’s first term and counselor to the secretary during Obama’s second term.  Prior to that, he was a Senate staffer for more than a decade.  He is now an independent public policy consultant.

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