News and analysis
March 10, 2014

War on Poverty Groups Are Still Around but Face New Challenges

Steve Woit, for The Chronicle

Michael Thorsteinson and Gene Flaten check out a construction site where Three Rivers Community Action is building low-cost housing.

Three Rivers Community Action, a $10.5-million nonprofit that serves a 20-county area of southern Minnesota, tackles just about every aspect of poverty you can name. It offers a Head Start program, homelessness services, financial-literacy classes, energy assistance, meal deliveries, help applying for food stamps, and emergency cash aid.

In addition, it has built more than 570 units of low-cost housing in the last dozen years. Its staff members are traveling around the region to help residents apply for insurance coverage under the new health-care law. And it operates a 40-fleet public bus system.

The group has come a long way since it was created in 1966 as a “community-action agency” as part of the War on Poverty in a region that was suspicious of the federal effort.

“We need a poverty program like a moose needs a hatrack,” a county official told Gene Flaten, 83, who was then employed by Minnesota to help set up community-action agencies and still advises the Three Rivers group.

Today, Three Rivers Community Action is one of more than 900 community-action agencies, most nonprofits, that serve almost every county in the nation. They offer programs that date back to the 1960s like Head Start, the early-childhood effort, and newer ones like the tattoo-removal project for ex-gang members run by the Community Action Partnership of San Luis Obispo County.

These agencies at middle age are the ultimate War on Poverty survivors, working to reinvent themselves to adapt to the modern nonprofit world, with its demands for more accountability, pressure to show results, volatile government-funding environment, and looming retirements of baby-boomer leaders.

The poverty fight has evolved as well. Twenty-five years ago, Rob Goldsmith, president of People Incorporated of Virginia, was working to bring indoor plumbing to Appalachia. Today his group operates microenterprise programs and offers loans to encourage businesses to invest in economically distressed communities—an effort that recently helped build a nursing school in Barbourville, Ky.

And at a time when the country has little taste for big-scale antipoverty programs, many community-action agencies have had to tailor programs to a new kind of client showing up at their doors: people thrown out of work by the economic downturn.

“I see people who were working for corporations or a major power company, and they can’t find a job,” says Joyce Dorsey, president of the Fulton Atlanta Community Action Authority, which is offering “be your own boss” classes to help the unemployed start businesses.

More Flexibility

The programs have also weathered many political storms over the years and are now in the middle of another one.

President Obama, who has crafted programs like the Social Innovation Fund to funnel money to nonprofits that can show evidence they are producing results, is clearly rankled by the old-style nature of the relationship between the community-action agencies and the government. In his budget proposals since taking office, including the plan he presented last week, the president has publicly criticized the Community Services Block Grant, which helps community-action agencies pay for their programs.

As in previous years, he proposed sharply cutting the grant—from $674-million this year to $350-million in 2015—and reserving the money for “high-performing agencies” that meet new federal standards.

The block grant, which gives money to states that then award it to eligible groups, 90 percent of which are community-action agencies, represents a small portion of revenue for its recipients—just 4 percent of the $14.2-billion they received from federal, state, local, and private sources in 2012.

But the organizations like the grants because they offer more flexibility than other government money, allowing them to respond quickly to changing needs or fill gaps not covered by other revenue sources. “It’s the most valuable money I have in our budget,” says Lisa Furseth, executive director of Community Action, which serves two counties in southern Wisconsin.

The Obama administration complains in its budget plans that many groups have been getting community-action money continuously since 1964 and face little competition, while states run into procedural hurdles when they want to cut or end payments to “deficient” organizations.

The effort follows a move by President Obama in 2011 to require low-performing Head Start grantees to re-compete for federal grants.

Community-action leaders say they agree the agencies need to be accountable but that they already face myriad reporting requirements by both state and federal agencies and that only a small number out of more than 900 organizations are badly managed or fraudulent.

David Bradley, executive director of the National Community Action Foundation, a lobbyist for the programs who helped craft the legislation that introduced the block-grant program in 1981, says states are sometimes reluctant to withhold money from mismanaged agencies for political reasons. He says he and other community-action leaders have at times worked with federal officials to provide training to such groups or even to get the state to shut them down.

“In years past, if there was a problem with a local agency and it wasn’t yours, people didn’t care,” he says. “They do now. It has consequences.”

The program could soon be facing even tighter restrictions. Legislation pending in Congress would require the Health and Human Services Department to address flaws cited in a 2006 General Accountability Office report, for example by ensuring that federal managers are properly trained about poverty issues and meet performance goals.

'A Huge Change for Us’

Given the growing pressure to prove results, some community-action leaders agree that their groups need to do a better of job of showing what kind of impact they have—which means going beyond just counting the number of people they helped.

Evelyn Friedman, executive director of the Greater Lawrence Community Action Council, in Massachusetts, says her organization adopted a strategic plan last year that aims to measure progress toward certain goals, like encouraging people to become self-sufficient.

“This is a huge change for us,” she says. “We’re in the process of talking about what is a result or an outcome. It’s not that 7,000 people got WIC [Women, Infants, and Children] coupons, but whether the program is reducing obesity or producing healthier children.

Too Dependent

Like other community-action agencies, Ms. Friedman’s group relies heavily on federal money, which pays for programs like energy assistance, housing, and home weatherization. She and others worry that too much dependence on those dollars is risky in an era of government shutdowns and deficit-cutting fervor.

Community Services Block Grant recipients in 2012 received about 73 percent of their revenue from federal coffers, 18 percent from state and local governments, and 9 percent from private sources. The economic-stimulus program sent an extra $1-billion their way, but that money ran out last year, forcing organizations to cut both services and employees.

Ms. Furseth says her Wisconsin group increased its staff to 150 after receiving stimulus money for a transitional jobs program and other activities but has now trimmed it back to 105.

To help temper the impact of such budget swings, the Greater Lawrence Community Action Council pledged in its strategic plan to build a “culture of philanthropy” and to raise at least $125,000 in private donations this year—up from less than $19,000 out of a $30-million budget last year.

John Brothers, a consultant who is serving as interim executive director at Puerto Rican Action Board, a community-action agency in New Brunswick, N.J., is also concerned that his group gets more than 90 percent of its revenue from government, He is now helping to search for a permanent head who can propose a new business approach.

Nonprofits that are too heavily subsidized can become “government plug-and-play” groups that have less ability to test new ways of doing things, he says.

Other groups have already found ways to diversify their revenue. Minnesota’s Three Rivers Community Action, for example, draws 31 percent of its budget from private sources, thanks partly to the money it earns from its housing projects and bus system.  

 Mr. Brothers also worries as the Obama administration promotes shiny new antipoverty programs like the Social Innovation Fund, community-action agencies are hobbled by a legal requirement that their boards consist of one third elected officials, at least one third representatives of low-income people, and the remainder nonprofit and business leaders.

“I don’t think any mandated board structure is any way to go,” he says, adding that groups should give top priority to getting trustees who can help them adapt to a changing marketplace.

But other community-action leaders say the “tripartite” board structure—designed in the 1960s to ensure that both poor people and local officials bought into the programs—helps guarantee that the groups are responsive to community needs and can develop the ties needed to attract partners for their projects, along with money from state and local governments.

“I find it useful because it creates a dialogue between folks that normally don’t sit down with each other,” says Michael Thorsteinson, executive director of Three Rivers Community Action, whose board has included county commissioners, school officials, farmers, and formerly homeless people.

Retirements Coming

Like many of his peers, Mr. Thorsteinson, 64, has been on the job a long time—in his case almost 30 years. And that signals another challenge for the community-action movement.

Donald Mathis, president of the Community Action Partnership, which represents the agencies, says when he asks at conferences how many people have worked at community-action agencies for 25 years or more, at least a third raise their hands.

That means lots of retirements are on the horizon. Some community-action state associations and local groups have developed “emerging leaders” programs to help train the next generation of managers—people, says Mr. Mathis, who still think “antipoverty work is noble and want to do it.”

Send an email to Suzanne Perry.

See all of our coverage timed to the 50th anniversary of the War on Poverty in this special section.


 

Community Action Snapshot

1,045: Number of groups in the community-action network

9-billion: Number of poor people served

20%: share of poor Americans served

Key programs they operate:

  • Food pantries, homeless shelters, and other emergency services
  • Head Start
  • Meals on Wheels
  • Energy assistance
  • Day care and other help for families
  • Transportation

Note: Includes all groups that are eligible for Community Service Block Grant money. Most are nonprofits that have been designated community action agencies by a state or local government.

Photo: Justin Sullivan/Getty Images

 

Source: National Association for State Community Services Programs, 2013 annual report on the Community Services Block Grant.

Send an e-mail to Suzanne Perry.