Less Government Funding Flows To Groups Like Food Banks and Homeless Shelters

We've been warning for some time now (see here, here, here, here, here, here and here) that human services charities (food banks, youth programs, homeless services) can be especially hard hit in a down economy. Why? The demand for their services goes way up, but the pace of income doesn't match that demand.

That makes a new study by the Urban Institute, showing that government support for such groups is down, especially troubling. Their findings reveal that:

• 56% of human service charities received less funding from State Governments
• 49% received less from Local Governments
• 31% received less from Federal Agencies.

That drop in government support, combined with decreases in other sources of revenues, like donations, has forced 82% of human service charities to scale back. Specifically,

• 21% cut programs and services
• 17% are helping less people
• 50% have cut salaries or refrained from issuing pay increases
• 39% have dipped into their rainy-day funds
• 23% have reduced their employees benefits
• 22% have had to borrow money.

Worst of all, the study’s authors predict that things will only get worse for human service charities. They believe demand for their programs and services will continue to increase and that revenues will continue to decline. So, as you start to make your holiday giving plans, please consider supporting a group like your local food bank or homeless shelter this year. For example, you could fund a holiday meal or volunteer at a local youth program.