- Trump has announced his support for a bailout of the airline industry. But thus far, the federal government has taken no action to ensure state and local governments can continue to support their nonprofit human services organizations.
- These nonprofits provide critical services to impoverished children and families, the mentally ill, the homeless, and seniors in assisted living.
- In New York City, they were left without clear guidance on whether they would have necessary financial support from the government for weeks. And even now, some organizations aren't fully reassured.
- Without a clear message from the White House that the federal government will back local leaders financially to help serve America's most vulnerable, this will become a bigger problem in other cities.
- This is an opinion column. The thoughts expressed are those of the author.
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President Trump has in recent days announced sweeping moves directing the federal government's relief efforts to address the novel coronavirus pandemic.
He's even floated his support for a bailout of the airlines and other travel-related industries like hotels and cruise lines.
But thus far he's taken no actions that could directly assist the non-profit social service agencies which provide care and aid for society's most vulnerable people — including seniors, the homeless, the mentally ill, and children in poverty or in danger of living in foster care.
Instead, the president has kicked that responsibility to state and local governments.
That approach is full of uncertainty and bears the potential for a widespread mess. Just look at the case of New York City — the nation's largest city, metro area, and one of the two epicenters of the crisis in the US — where non-profit human services organizations were left in the dark by the city government for a full 17 days since the city's first confirmed case of COVID-19. These critical groups were unsure about whether they would be supported with the necessary cash infusion they need to continue operating.
While Mayor Bill de Blasio sent the city's Human Service Providers Providers a letter Wednesday that finally offered some guidance, some providers worried that the wording is ambiguous enough to create further disruptions.
The letter promises the city will reimburse providers even if there are disruptions in their services or overages on their expenses. It also says the city will cover staff overtime or the hiring of temporary workers if the regular staff can no longer make it work. But it comes with the caveat: "If you work with your contracting agency and agree to a plan for moving forward, you will get paid for executing on that plan."
This is in New York, a city with a huge infrastructure and low unemployment. If there's this much confusion here, imagine what could happen in, for example, an economically-depressed Rust Belt city with far fewer resources.
It wouldn't be hard to imagine mentally ill homeless people having nowhere to go but the streets, during a crucial moment when much of the country is trying to stay indoors for an indefinite period.
(Disclosure: My wife works for a social services organization in New York City.)
Worries about the "safety net"
"Organizations like us are really the safety net of this city," Phoebe Boyer, President and CEO of the Children's Aid Society, told Insider before de Blasio announced the new guidelines.
"We are the trusted resource in our communities for children and families when they're feeling vulnerable," Boyer added. "We need clarity on whether we are going to continue to get paid so that we can take that burden off of our staff. They can do what they do best, which is work with families and children."
Boyer stressed that for workers in their field, working from home is not an option.
But it's the federal government's inaction in assuring local governments that Washington will have their back to help keep the nonprofit sector afloat during this once-in-a-century crisis that Boyer finds most perplexing.
"When I hear that we're talking about bailing out the airline industry because people aren't going to be flying, and yet we're not securing the front line workers. I'm like, that's just insane," Boyer says. "Tax credits don't exactly help us. We actually need cash to flow."
"Nonprofits are on the frontline of helping people in crisis every day," Michelle Jackson, the acting executive director of the Human Services Council, told Insider.
Jackson says the workers such as the ones delivering meals to senior centers, operating homeless and domestic violence shelters, and providing after-school programs for underprivileged children should be treated as first responders, and given the support from the government that goes without saying for other first responders.
Roadblocks, red tape, and lack of clarity
Non-profit organizations typically raise their part of their operational funding through private donations, but that rarely covers the extent of their costs. The critical groups largely subsist on government grants, which are contingent on the organizations meeting contractually-obligated benchmarks.
In a time of extraordinary unforeseen crisis, such as right now, those benchmarks will be impossible for most organizations to hit. And without guarantees that they will be reimbursed without penalty, they could run out of the money needed to pay their employees and perform their services.
Three days before De Blasio's office sent its letter to the city's nonprofit partners, City Comptroller Scott Stringer sent a letter of his own to New York's First Deputy Mayor Dean Fuleihan. Stringer wrote, "to ensure non-profits will remain able to serve New Yorkers through this crisis, it is essential that they be held harmless for missed contract deliverables that are directly attributable to COVID-19."
But governments are unwieldy beasts, loaded with inscrutable processes and immovable red tape. In New York City, nonprofits were left not knowing where they stood on the list of the government's priorities, and without a federal mandate to provide support for the non-profit sector, this could be exacerbated in cities around the country.
Before the most recent update, the city had also provided seemingly contradictory guidance, according to Jackson.
"On Sunday there was an announcement that schools were closing and [Department of Education] after-schools were closing, but nonprofit after-schools were instructed to stay open," Jackson said. "It would be helpful if there was clear guidance as to why they're saying open and giving them resources so that they can stay open appropriately.
Another problem facing nonprofits is the inherent conflict with being the "boots on the ground" during an unprecedented moment of social distancing.
"How do you provide childcare in any meaningful way, when you're also trying to practice social isolation?" asks Michelle Yanche, the Executive Director at Good Shepherd services.
"A petrifying reality that cannot come to pass"
"There are as many as 80,000 homeless New Yorkers and in shelters ... That's a lot of people," Catherine Trapani, the Executive Director of Homeless Services United, told Insider.
Trapani said if the city had failed to ensure nonprofits will not be held to the letter of their contracts because the city won't guarantee funding "for even the most basic things like payroll and time and a half and incentive pay," then the workers won't show up and homeless shelters will go unstaffed.
"That's a petrifying reality that cannot come to pass," Trapani adds.
Trapani says she'd "love to see a meaningful federal stimulus package" that includes funding for nonprofits. She hopes this would include making all necessary additional supplies reimbursable and providing guarantees for social services workers that should they or a family member become ill, that they won't lose their job.
Yanche told Insider, "The most important thing the federal government can do for us right now is to make funding available and create assurances that expenditures related to our response to the needs of the community — and even the flexibility we need to provide our usual essential services given the fluid status of what's happening — that those resources will be made available."
President Trump demonstrated in recent days that after an inexcusably slow start, he grasps the severity of the COVID-19 pandemic, and is aware of the toll it's taking on the economy and citizens.
And while he was criticized this week for telling governors to buy their own respirators and ventilators, the president at least assured the state executives, "We will be backing you."
Without assurances from the federal government, it's hard to see a trickling down from the states to the cities that the nonprofit sector will be able to provide their services to their proper effect.
That could mean seniors going without meals, homeless shelters going unattended, and children going without care and supervision. That would be disastrous, and almost certainly lead to the health care system — which is already bracing for a tsunami of COVID-19 patients — to be taxed even further.
If federal bailouts are coming for private businesses, it would seem that local governments should receive some kind of meaningful financial support specifically earmarked for the non-profit agencies that provide essential public services.
Unless President Trump acts, help doesn't appear to be on the way.
(Insider made multiple requests for comment from New York City Mayor Bill De Blasio's office, New York Governor Andrew Cuomo's office, and the White House.)
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