Include Nonprofit Organizations in the Stimulus, by Bill Shore, Founder and Executive Director of Share Our Strength

The new Congress will enact a huge economic stimulus package intended to get our markets and economy moving again. But what about those so voiceless and vulnerable that there are no markets to serve them regardless of whether the economy is weak or strong? That۪s why an investment in community organizations helping the victims of economic hardship must be part of any economic recovery. It۪s the only way to not only ensure economic growth, but a growing economy that does not leave millions behind.

Unfortunately, even during robust economic times, before the credit crisis, the loss of 1.2 million jobs, and the disastrous stock market losses that wiped out so much wealth, there were still more than 34 million Americans living below the poverty line, 12 million kids at risk of hunger, and millions more stuck in failing schools and with inadequate health care.

For these families it has often been nonprofit organizations food banks, health clinics, and education and job training programs that have come to the rescue. Even an economic stimulus package as large as $700 billion will not be sufficient if it fails to include a modest slice of funding to build the capacity of nonprofits that are, and always have been, on the front line of providing emergency food, housing, health care, and other essential human services when markets fail. Many of these agencies have been so effective that that they۪ve become models of public-private partnerships earning support from business, philanthropy, and government.

But today, nonprofit organizations at the national and community level face a classic triple whammy: decreased assets and donations just as need is increasing and state and local government budgets that might otherwise meet it are being cut. Foundation endowments have lost 30% of their value, more than $200 billion, since the stock market۪s peak last October. Corporate philanthropy and sponsorships are being reduced. In New York, the much admired anti-poverty organization Harlem۪s Children Zone is laying off 10% of their staff. There are many other such stories. And all at a time of rising unemployment, an historic high of 30 million Americans on food stamps, and record increases in demands for other types of assistance.

As little as one percent of the likely $700 billion aimed at economic stimulus could enable thousands of the nation۪s most effective and respected nonprofits to go from financial crisis to financial stabilityfocusing on strategically delivering quality services rather diverting their energies to desperation fundraising and scrambling to stay afloat. Standards and criteria for receiving funds would need to be set just as the government is doing for financial institutions and other beneficiaries of economic stimulus funds.

Nonprofits are used to doing a lot with a little. Most have no working capital reserves and have never had access to or used credit in the first place. But they are mission driven, innovative, rooted in the community, and closer than government to the people they serve. They are the first responders when it comes to economic distress, putting the needs of others ahead of their own.

Unlike the for-profit institutions receiving federal aid because of reckless risk-taking, greed, and poor management, nonprofits are in need of support primarily because they seek to serve more of the victims of this economic disaster.

It۪s encouraging to see Congress and the next Administration preparing to act so quickly to provide the leadership our markets require. But the moment requires moral leadership that goes even further. An economic stimulus package aimed at creating jobs and wealth ought to include efforts to create the kind of community wealth that the nonprofit sector excels at creating. It۪s not the kind of wealth that yields vacation homes and private jets, but the kind that makes our children healthier, our schools better, and our neighborhoods safer.

In his 1970 Nobel acceptance speech, Alexander Solzhenitsyn said: “What seems to us more important, more painful, and more unendurable is not really what is more important, more painful, and more unendurable but merely that which is closer to home.” For most of us, the current economic crisis has struck closer to home than ever before. But many of our fellow citizens have been living in crisis for too long already and will continue to even after the economy is stabilized and growing again, unless we seize the opportunity to build capacity in the nonprofit sector and create community wealth too.

Bill Shore is the founder and executive director of Share Our Strength, a national anti-hunger organization.