Looking for Relief

Recession-weary charities across the country may soon get some relief from an economic-stimulus plan Congress is now crafting. An early version of the plan would spend billions of dollars to bolster a range of federal health and social programs.

The measures, unveiled this month by House Democrats, propose increased spending on Medicaid, community health centers, and grants to states for social services and community development. Much of the money would go to help states that are under severe fiscal stress as tax revenues shrink.

“This looks like the cavalry coming over the hill,” says Harry Bogdan, director of public policy at the Maryland Association of Nonprofit Organizations, which has been lobbying Congress to help Maryland avoid a “total budget meltdown” that would force the state to slash spending on social programs. He calculates the stimulus plan could give his state an infusion of up to $3-billion for its deficit-plagued operating budget.

“We’re ecstatic about the result,” says John Sawyer, director of federal affairs at the National Association of Community Health Centers.

Not only does the plan propose $87-billion to temporarily increase the federal portion of Medicaid, the health program for poor people that is operated by the states, but it would provide money specifically for local health centers — $1-billion to help them renovate their facilities and $500-million to help them provide care to uninsured and underinsured patients.

“We’ve been making the case for a long time that not only are our health centers a safety net,” Mr. Sawyer says, “but they’re also an economic engine in communities that really need it.”

‘Recovery and Reinvestment’

The House measure — the “American Recovery and Reinvestment Bill of 2009″ — calls for $825-billion in tax cuts and spending on clean energy, education, health care, and road and bridge projects.

President Obama has endorsed the measures, saying in a statement that they would save or create three million jobs and offer a “significant down payment on our most significant challenges.” House Democrats are pushing for Congress to adopt the legislation by mid-February.

Nonprofit leaders are hoping that the proposals that aid charities survive deliberations by several House committees and win Senate endorsement. Some nonprofit advocates hope to persuade the Senate to go even further.

Independent Sector, the coalition of big charities and foundations, wants Congress to include a $15-billion bridge-loan fund to help charities that are short of money because states that have hired them to provide services are behind in their payments. That problem has become more severe as groups find it hard to get loans from traditional sources due to the country’s credit crisis.

Diana Aviv, the group’s president, says Independent Sector also wants to ensure that the stimulus money supplements existing spending, rather than simply replacing it.

“There is significant money that has been made available in a very timely and targeted way,” she says. “The side we want to make sure of is that this money is not ‘instead of,’ but ‘in addition to.’”

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

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.

The letter 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.

The economic plan proposed by House Democrats does not include those ideas. But in addition to the new Medicaid spending, it proposes:

• $2.1-billion for Head Start, the early-education program, to serve 110,000 additional children and create 50,000 jobs.

• $1-billion for Community Service Block Grants, which help states provide social services to low-income residents; $1-billion for Community Development Block Grants, which help them provide housing and antipoverty projects; and $2-billion for Child Care and Development Block Grants, which help them 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.

• $200-million to AmeriCorps, the national-service program, to expand by 16,000 members to help vulnerable people during the recession.

• $200-million to the Emergency Food and Shelter Program, which is governed by a board of nonprofit groups, including the American Red Cross, Catholic Charities USA, and United Jewish Communities.

• $120-million to the Community Service Employment for Older Americans program, which pays low-income older people to do 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 job training, energy conservation, and other services for low-income families.

• $50-million to the National Endowment for the Arts to provide grants to struggling arts organizations.

• $50-million to Youth Build USA, a nonprofit group in Somerville, Mass., to put low-income young people to work building low-cost housing.

‘A Core Investment’

Some experts are disappointed that the plan does not include more-extensive proposals for increased spending on the national-service programs.

“I do believe it’s a core investment in our social capital,” says Edward Skloot, director of the Center for Strategic Philanthropy and Civil Society at Duke University, who signed the letter to Congress and Mr. Obama urging expanded spending on community service. “We have kids who are really willing and able to do it, as well as institutions that are able to handle it.”

However, the issue has gotten attention in the Senate. Sens. Orrin Hatch, Republican of Utah, and Edward M. Kennedy, Democrat of Massachusetts, this month reintroduced a bill from the last Congress — the Serve America Act — that would more than triple, to 250,000, participation in yearlong national-service programs like AmeriCorps by 2013, create several new service programs, and provide money to help nonprofit groups recruit volunteers and spread innovative projects.

Lester Salamon, director of the Center for Civil Society at the Johns Hopkins University, says he is disappointed the economic-stimulus plan by House Democrats does not include more money for the emergency food and shelter program.

Because money would be distributed directly to charities by boards of local nonprofit groups, it would get to recipients more quickly than “the more elaborate state and local routes,” he says. But he adds it’s critical to get speedy action on a stimulus plan, “so it’s not clear to me that people should put their feet in concrete over these proposals.”

Alan J. Abramson, professor of public and international affairs at George Mason University and a senior fellow at the Aspen Institute, says even though some of the ideas from the nonprofit world did not make it into the first draft of the plan, they could be considered later.

“It’s been good for nonprofits to go through the process of developing ideas,” he says.

Caroline Preston contributed to this article.