Strains in the Safety Net

It was early April last year when Marta B. Peláez began to see a sudden increase in the number of women and children seeking help from the battered-women’s shelter she oversees in San Antonio.

At first, says Ms. Peláez, “we thought it was an out-of-season peak.”

But as the numbers began to climb, donations from individuals began to fall off. Requests for shelter at Family Violence Prevention Services had more than doubled by the fall. The shelter didn’t realize it, but it was seeing the early warning signs of the economic collapse. When the stock market tumbled in September, says Ms. Peláez, “we heard that and said, ‘Ah ha, this is what it is.’”

Across the country, nonprofit leaders like Ms. Peláez are reporting an explosion of demand at domestic-violence shelters, addiction-treatment and health-care clinics, and counseling centers for troubled youths. But unlike food pantries or homeless shelters, such charities — many of which focus on hidden, controversial, or intractable social ills — have not seen an outpouring of public sympathy and emergency grants. Leaders of charities that serve addicts, prisoners, or the mentally ill warn that increasing demand and declining fund-raising returns are fraying the fragile safety net protecting some of society’s most vulnerable members.

“We deal with the poorest people in the city,” says JoAnne Page, president of the Fortune Society, a New York charity that helps former prisoners re-enter society. “When the economy sneezes, they’ve got pneumonia — and the economy is doing more than sneezing right now.”

Cuts in Government Aid

Like other organizations that work with individuals in the justice system, the Fortune Society is supported primarily through government contracts, many of which have abruptly disappeared as legislators continue to slash state and city budgets.

In early November, says Ms. Page, her organization learned it would have to close a drug-treatment program for former prisoners by the end of the month because the parole office was withdrawing support. Another contract for the Fortune Society’s 20-year-old counseling and intervention program was canceled in December with just two weeks’ notice. And, says Ms. Page, because so many government agencies are delaying payment of existing contracts, the organization is racking up interest on loans to cover its costs.

After losing $2-million of its $15.5-million budget in 2008, the organization sought to make itself “bomb proof” by laying off 10 percent of its staff and moving its headquarters from Manhattan to Queens. The test will come this summer, as the group braces to lose another $1-million in the next round of state and city budget cuts. “We know they’re coming, but we don’t know where they’re coming from,” says Ms. Page.

Ms. Page says the cuts are especially troubling given the added pressures newly released convicts face. “We’re seeing people come to us hungrier,” she says, adding that many former prisoners can’t find work in the stagnant job market.

Groups that rely partly on fees for services, like those that provide drug-addiction treatment, say fewer of their clients can afford to pay than before.

Just three months ago, two-thirds of the patients receiving treatment for drug addiction at the Peak Addiction Recovery Center, in Pikes Peak, Colo., were sponsored by local nonprofit groups charged with distributing state and federal grants, says Michael J. McKelvey, the center’s executive director.

But those government programs have been cut, so the clinic is increasingly only able to serve patients who can afford to pay the $5,000 to $9,000 treatment fees. The result, says Mr. McKelvey: “I have open beds that should be filled with clients.”

In the past, such social-service groups might have turned to foundations and individuals to fill some of these gaps. But substantially reduced endowments have led many foundations to scale back payments, impose restrictions on which groups may apply for grants and how often, and shift grant-making priorities to groups that meet the most basic needs.

“Some foundations are asking, ‘Are you providing food or are you providing shelter?’” says Louise Wolfgramm, president of Amicus, a Minneapolis organization that assists inmates and ex-offenders. “If you don’t do that directly, you’re not going to make the cut.”

Amicus lost three foundation grants totaling $17,500 this year and received reduced amounts from other foundations. Over all it has lost 22 percent of its $1.8-million budget.

A Hard Sell

Even in the best of times, raising money for issues like drug addiction, prison rehabilitation, or mental illness is a serious challenge, say nonprofit leaders. While hospitals can rely on a steady stream of grateful patients for fund raising, says Vicki Sirockman, executive director of Lydia’s Place, which serves formerly incarcerated women with alcohol and drug problems in Pittsburgh, the individuals who seek aid from her charity rarely have the financial means to contribute to the institution that put them back on their feet.

Moreover, causes like hers are often a hard sell for many donors. “Addicts are not appealing people: It’s very hard to help them, you have to work long and hard with them, and it’s not a problem you can fix in a few weeks,” she says. “It’s hard to spin this to make it appealing to people who don’t understand its importance to society.”

Meanwhile, mounting job losses, rising food prices, and the foreclosure crisis have increased stress on individuals and families, which can lead to spikes in substance abuse, domestic violence, truancy rates, crime and incarceration.

After calls to the National Domestic Violence Hotline, in Austin, Tex., jumped by 21 percent from 2007 to 2008, the organization surveyed callers for six weeks in November and December to determine whether the increase was linked to the economic downturn. It found that 54 percent of 7,868 callers had experienced a change in their household’s financial situation within the past year.

While domestic violence is not caused by the recession, says Sheryl Cates, the hotline’s chief executive, financial stress can exacerbate problems with violence and make it more difficult for victims to escape abuse.

But the center is not able to expand services and had to eliminate 11 of its 87 staff positions last fall. Contributions from corporations, foundations, and individuals have dropped by 40 percent in the past year.

If call volumes remain at their current levels, Ms. Cates estimates, up to 60,000 calls to the center could go unanswered in the next year.

At the Rose Brooks Center, a domestic-violence shelter in Kansas City, Mo., demand for shelter and counseling has jumped 42 percent, says Susan Miller, the executive director.

But the center’s 75-bed shelter is filled past its capacity, with children lodged on cots and trundle beds, and those seeking counseling are waiting up to a month to be seen. “Many people are calling, finding out about the wait, and hanging up,” says Ms. Miller. “It’s usually a brave moment when they call, and they may not call back.”

Crisis Calls

Mental-health organizations are also seeing signs of increased emotional strain.

At Samaritans, a Boston crisis hotline that answers more than 100,000 calls a year, volunteers have noticed an increase in calls from people who are unemployed or fear they soon will be, says Roberta Hurtig, the group’s executive director.

Youth counseling and programs to prevent juvenile delinquency also say demand for services is rising. Truancy rates tend to correlate with the number of times a child moves, says Jessica Pennington, executive director of the Truancy Intervention Project Georgia, which has seen referrals increase by about 100 cases a year for the past three years at the same time that money from the state bar association has dropped from $200,000 to $50,000.

It used to be that most of the cases referred to the center by schools and juvenile courts were children with special-education needs, says Ms. Pennington. But more and more the group’s clients are children from families under economic stress. “Kids that wouldn’t have come into our program before are now because the family’s in crisis,” she says. “Both parents have lost jobs, housing is iffy, and school falls down on the priority list.”

Stretched Resources

Some of the increases in demand at these organizations can be traced to financial difficulties at other charities. Stronger groups increasingly are being asked to absorb people who previously would have been served by centers that have closed or cut back on services.

David Burgess, executive director of the Charg Resource Center, a Denver organization that serves adults with mental illness, says people who ordinarily would be hospitalized now turn to his group, local health centers, and homeless shelters since the University of Colorado health-sciences center closed its inpatient psychiatric ward in January, citing a need for more beds for other medical care.

Mr. Burgess says finding alternatives for the people his group cannot help has become especially tough. “We try to talk with them about whatever resources are out there,” he says, “but have to warn them that the resources are stretched and they may not get the help they’re looking for.”

Hospitals, too, are under strain from greater numbers of patients who cannot afford treatment and end up needing emergency care because of postponed medical appointments.

In January the Arnold Palmer Medical Center, in Orlando, Fla., which serves children and mothers, absorbed $400,000 in costs to treat patients who were uninsured or couldn’t afford insurance co-payments, says John Bozard, president of the center’s foundation.

Since September, the hospital has seen a 26-percent increase in the numbers of canceled checkups and elective procedures because patients cannot afford their insurance deductible, have switched to more restrictive insurance plans, or are simply too anxious about losing their jobs to risk taking time off work, says Mr. Bozard.

At the same time, he says, visitors to the hospital’s emergency room have increased by about 30 a day.

Many nonprofit leaders say they worry not only about the immediate unmet needs, but also that the impact will continue to be felt long after the economy rebounds.

“The concern is once you weaken programs to the point where you have to eliminate an entire program or service, those programs don’t come back,” says Mary Marx, interim president of PACE Center for Girls, a truancy-prevention charity in Jacksonville, Fla.

Following an 8-percent reduction in government contracts and a 40-percent decline in contributions from foundations, corporations, and individuals, the center recently cut an outreach program in public schools and closed one of its 18 residential centers. Meanwhile, says Ms. Marx, requests for the center’s residential program have nearly doubled since last year.

Emergency Appeals

Many groups have tried to avoid killing a program through other cost-saving measures.

Amicus, the Minneapolis prisoner-rehabilitation center, for example, has tried to absorb the loss of a $375,000 contract for two programs to help inmates and recently released prisoners by laying off six employees, and by getting the remaining staff members to agree to take an 11-percent salary cut, as well as increase their contributions to the employee health plan and give up free parking benefits.

At the same time, Amicus sent out an emergency appeal to its 250 annual donors to tell them, “If you’ve only made one gift to us, you need to make two,” says Ms. Wolfgramm. The special appeal resulted in a 19-percent increase in giving.

Mounting financial pressure is prompting frank, if not desperate, fund-raising appeals elsewhere as well.

In December, Family Violence Prevention Services decided that, in light of such urgent needs, it would ditch its usual fund-raising dinner and instead send out a letter to 8,000 people outlining the shelter’s straitened circumstances.

The shelter had been housing an average of 186 people a night, up from 68 in 2007, while donations from individuals are down by 75 percent, wrote Ms. Peláez. “We are forced to contemplate making some very difficult and painful decisions, including the reduction of our services and programs.”

The letter prompted donations of about $50,000.

Organizations are also getting more aggressive about pursuing government money.

For example, Lydia’s Place won state approval last summer to bill Pennsylvania’s medical-assistance program for drug-addiction counseling, which will bring in about $78,000 a year for the charity.

Even so, Ms. Sirockman fears it still won’t be enough to cover services for a growing number of women coming to Lydia’s through the county jails.

“I write a grant a week to stay alive,” she says. But with Pittsburgh’s food and housing organizations “crushed” by overwhelming needs, she knows she will have an increasingly difficult time competing for funds.

The tough odds have yet to deter her. Options are drying up for the women she serves, she explains: “When they come out of jail, we’re it. I don’t know who would pick up the slack. I’m not sure anybody could.”