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Non-profits need sustainable business environment

Rochester Business Journal
June 28, 2013

The Greater Rochester community faces numerous social and economic challenges. For example, the city of Rochester ranks seventh in the nation in child poverty rates. The local unemployment rate of more than 7 percent signals the very real threat of middle-class families falling into poverty.
 
These statistics come alive to us every day at Catholic Family Center, where we saw an 83 percent increase in the numbers of people needing our food pantry services last year. The people we served weren't coming from the city alone, but came from the suburbs as well. Our agency served more than 33,000 people in this region in 2012, many of whom comprise the most vulnerable of our community. Approximately 65 percent of our clients have incomes below $25,000.
 
Many of our programs result in direct savings to taxpayers through such outcomes as reducing recidivism for parolees, keeping children out of foster care, helping pregnant women give birth to drug-free babies, and keeping the frail elderly out of nursing home care through in-home support. Yet non-profit agencies like CFC face serious constraints doing business in New York.
 
In this time of fiscal challenge for the state, we recognize that money is tight, cutbacks are inevitable, and flat funding with no cost-of-living adjustments is now often accepted as the best-case scenario. This creates enormous pressure on agencies like CFC, however, because these same fiscal challenges cause more people to be in need of our services at a time when money for those services is being reduced. Due to funding cutbacks in 2012, we had to close several programs and reduce our work force from roughly 460 to 430 employees.
 
In addition, it is very difficult to recruit and retain qualified individuals to provide critically necessary professional services in the current business environment for non-profits. The ever-increasing cost of employee benefits coupled with the rising costs of basic daily living make engaging and sustaining employees very challenging in the absence of COLAs from funders. Our employees pay rent, mortgages and taxes, they purchase groceries, buy fuel for their cars, shop for clothes for their kids at local malls and stores-all of which contributes to a healthier economy. When their wages stagnate for one, two, three or more years, their ability to positively impact the local economy is diminished.
 
In addition to funding reductions, agencies like CFC also grapple with a number of unfunded mandates, which cost money and staff time. These include such things as compliance requirements, electronic medical records requirements, and quality/outcome reporting requirements. They are important, but non-profit agencies are rarely reimbursed at a level anywhere near the cost of effective implementation of these requirements. Steady and consistent reimbursement for administrative costs at a rate that reflects the true cost of doing business would bring enormous relief to CFC and similar organizations. These economic and business realities require that we and our supporters in the community advocate strongly that COLAs be included in funding for services that prevent poverty.
 
With a goal of helping vulnerable people reach their greatest human potential, CFC plays an important role in maintaining the stability of the Rochester community. What is recognized far less often, however, is the fact that CFC and other non-profits also are employers and significant contributors to the economy of Greater Rochester. We have 430 employees throughout our organization, to whom we paid $15,398,349 in salary and benefits in 2012. We also spent more than $9 million on goods and services such as food, rent, supplies, equipment, and other items necessary to provide quality services to our clients. Thus, agencies like ours play a dual role in the Rochester economy, one that is not always fully recognized in business circles. In this time of funding cuts and declining funding streams, we need to foster greater community awareness of the issues we face and help in garnering needed support.
 
Ensuring stabilization and sustainability in the non-profit sector is critical to effectively addressing the community's numerous social and economic challenges. Government, non-profit agencies, and community and business leaders must come together to overcome these challenges and ensure a healthy economy that benefits all citizens.

Mark A. Wickham is president and CEO of Catholic Family Center.

6/28/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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