January 15, 2009

Economic-Stimulus Package to Help Nonprofit Groups Meet Social Needs

Note: The Chronicle originally reported that the House proposed money for YouthBuild USA, a nonprofit group in Somerville, Mass. In fact, the money would go to YouthBuild, a program operated by the U.S. Labor Department that provides grants to groups that train low-income young people in construction skills. YouthBuild USA supports the federal program—for example by offering training, setting quality standards, and raising private money—but will not directly receive any stimulus money. This item has been corrected to omit the error.

House Democrats unveiled an economic-stimulus package today that proposes billions of dollars in spending on Medicaid and other federal programs that will help nonprofit groups in cash-strapped states meet spiking demand for social services.

It also proposes spending $200-million to allow AmeriCorps, the national-service program, to expand by 16,000 members to help vulnerable people during the recession, and $50-million to allow the National Endowment for the Arts to provide grants to struggling arts groups.

It would also grant $50-million to YouthBuild, a federal program that provides grants to groups to train low-income young people in construction skills.

The package, the “American Recovery and Reinvestment Bill of 2009,” calls for $825-billion in tax cuts and spending in areas including clean energy, education, health care, and road and bridge projects. President-elect Obama endorsed the measures, saying in a statement that they would save or create 3 million jobs and offer a “significant down payment on our most significant challenges.”

Many nonprofit leaders and experts have proposed that the stimulus package include billions of dollars of spending to help charities both weather the recession and put people to work solving the country’s problems.

More than 1,000 people signed a letter asking Mr. Obama and Congress to greatly expand the country’s national-service programs and create 175,000 new jobs over two years.

It also asked for a “nonprofit stimulus fund” to distribute government and private money to innovative nonprofit groups. Mr. Obama endorsed both of those ideas on the campaign trail.

Money to the States

This package does not take up those ideas, although many of the measures to bolster the social safety net and state finances would trickle down to charities that rely on government revenue. The proposed new spending includes:

$87-billion to temporarily increase the federal portion of Medicaid, the health program for poor people that is managed by the states. This will help states that are experiencing deep budget shortfalls as tax revenues fall. (See The Chronicle’s story on state budget woes.) $2.1-billion to Head Start, the early-education program, to allow it to serve 110,000 additional children and create 50,000 jobs. $1-billion for Community Services Block Grants, which help states provide social services to low-income residents, and $1-billion for Community Development Block Grants, which helps them provide housing and antipoverty projects. $1-billion for Child Care and Development Block Grants, which help states provide child-care services to low-income families. $1-billion to the Low-Income Home Energy Assistance Program, which provides money to states to help low-income families pay for heat and air conditioning. $1-billion to help community health centers renovate their facilities, and $500-million to help them provide care to uninsured and underinsured patients. $120-million to the Community Service Employment for Older Americans program, which would allow charities and other groups to add 24,000 participants. The program pays low-income older people to take part-time community-service jobs. $100-million to the Compassion Capital Fund, which provides grants to religious and other charities to provide social services. The money would be directed to groups that provide job training, energy conservation, and other services for low-income families.

The package also includes new money for food stamps and jobless benefits. Mr. Obama is scheduled on Friday to discuss the proposals — which must now be considered by several House committees — while he is visiting a wind-turbine plant in Bedford Heights, Ohio.

See the House Appropriations Committee Web site for more details.

Suzanne Perry