Filling The Gap: As Government Shrinks, Community Groups Seek Local Solutions

It's been a long road back for Christina Fitzgerald.

After nearly two years spent looking for work in several cities, Fitzgerald arrived in Charlotte, N.C., in 2010, pregnant and homeless at age 41, living out of her Honda Accord and still unable to land a job. She found temporary shelter at a maternity home, but longer-term steps eluded her. Then she heard about Project Hope, a comprehensive program of housing-based services for those at risk of -- or experiencing -- homelessness.

"Now I have some stability in my life," she says, lauding the program's help with her job search, financial planning, and perhaps most important, finding an apartment with a graduated rent-payment plan for her and her new daughter, Emily. None of it has been easy, she says, but after an intense approval process, "Project Hope did a lot for me."

She isn't the only one. Officials in Charlotte's home county of Mecklenburg call Project Hope a key element of efforts to fight area homelessness, filling the gap left in the wake of strained budgets and deep cuts to conventional social services. The program is run through the longtime Charlotte nonprofit Crisis Assistance Ministry, whose executive director, Carol Hardison, says her group was committed to creating a new system for delivering assistance rather than continuing to "take government grant money and just follow the rules."

Hardison's group and its role in the Charlotte area aren't unique, either. In an era of shrinking budgets and smaller government, hundreds of communities throughout the United States are responding to a shortage of social-services funding with help from grassroots efforts, experimenting with innovative combinations of public and private resources. It remains unclear, however, whether such experiments can yield the kind of lasting impact that Hardison and those like her seek.

Rather than providing conventional short-term aid, Hardison says, "We wanted to do something different that would end up being more effective." But success, she adds, will be measured in decades. For projects like hers to effect structural change, area citizens need to see shared value for themselves and their neighbors, say organizers like Dan Kildee, the president of Community Progress, a nonprofit that focuses on community reinvestment. Yet even such organizers warn that there are limits to community engagement's capacity to replace more traditional government.

From infrastructure to personal social services, the challenges facing the nation are enormous. Fixing crumbling bridges and highways would require an estimated $2.2 trillion, according to the American Society of Civil Engineers. Municipal emergency food aid requests have increased by 15 percent, according to the U.S. Conference of Mayors. About 24 million Americans remain unemployed, and unsheltered homelessness has continued to increase as banks foreclose on tens of thousands of homes every month.

Especially on the state and local levels, however, the funds to address these kinds of problems are just not there. By the second quarter of 2009, state income tax collections had fallen 27 percent below their 2008 levels even as demand for Medicaid and other services continued to climb. Though the federal stimulus package's $145 billion in fiscal relief to state and local governments helped plug the gap, those funds only covered at most 40 percent of the deficit and are now exhausted, according to the Brookings Institution.

For the coming fiscal year, 29 states have already projected shortfalls totaling $44 billion, threatening public-worker pensions and bedrock services. Many of those states have sharply reduced expenditures on health care, public education and services to the elderly and disabled, among others.

"We have a lot of gaps to fill," says Paul Schmitz, the CEO of Public Allies, a Milwaukee organization that trains young people to become nonprofit leaders. "Part of the backbone of our society is people coming together, and this period of austerity is pushing people by necessity to find new and different kinds of solutions."

On the national political stage, both parties are pushing to align themselves with such altruism. President Barack Obama has appointed Schmitz to the White House Council on Community Solutions, formed last year to discuss means beyond government, and Republican policy circles have long advocated such nongovernmental alternatives. On the stump, former Massachusetts Gov. Mitt Romney says the answer to tackling poverty in areas like the South Side of Chicago lies with state and local initiatives, rather than federal policies. "The money goes closer to the problem," he said last month.

While such language is often designed to defend further cuts to social programs, the Charlotte-area efforts spearheaded by Crisis Assistance Ministry stand as a testament to the value of buy-in from various members of a local community. Since 2008, its Project Hope initiative has been able to provide housing support to 100 formerly homeless people through a uniquely collaborative approach: With federal stimulus money covering rent and utility payments and the department of social services providing half a dozen social workers, landlords were attracted by the guaranteed rents, church volunteers offered further assistance and the local Ikea donated furniture.

"It was a case of people leading the government," says county budget director Hyong Yi, "not the government leading the people."


Few cities emerged unscathed from the financial collapse of 2008, but the banking capital of Charlotte found itself in especially desperate straits. The collapse of Wachovia and near-collapse at Bank of America, both headquartered in North Carolina's "Queen City," cost the local economy thousands of jobs.

Once a prosperous U.S. financial hub, Charlotte was soon named the nation's ninth-most miserable city by Forbes magazine. Foreclosure, homelessness and violent crime rates all ticked upward in the wake of the downturn, as unemployment jumped by a staggering 50 percent to nearly 1 in 12, according to the Bureau of Labor Statistics.

Yet just as the local need for a safety net spiked, the Mecklenburg County government slashed its aid programs by 20 percent, to balance the revenue shortfall from its depressed tax base. The county social-services department had served about 350 people a year earlier, but now had to accommodate more than 1,000 on a shoestring budget, including hundreds of the newly homeless. The county agency that helps prevent child abuse had to shutter offices around the state.

"It was pretty bad," says Yi, noting that the $150 million cut exceeded the entire budget of 85 of North Carolina's 100 counties.

Stretched thin, Mecklenburg needed its own support to feed, clothe and care for thousands. Ultimately, that help came largely from a diverse group of local nonprofit groups, community volunteers, and area churches and businesses collaborating to aid those in need, laying the groundwork for a level of coordination they have since worked to maintain.

"We took it as a once-in-a-lifetime opportunity to build an innovative, sustainable solution," says Hardison, whose Crisis Assistance Ministry, a coalition of Charlotte nonprofits, provides poor families and individuals with emergency assistance for utilities, heat and clothing, among other needs.

Charlotte's nonprofit community had a lot of ground to make up, since government budget cuts also hurt many of them. Summit House, a residential treatment program and alternative to prison for female offenders and their children, is still struggling to reopen and rehire some of the 20 staffers cut after the state trimmed its funding and stopped guaranteeing annual grants.

"It was unsettling to have our lifeline cut and it was impossible to stay open given the financial situation," says board member Tim Wilson. "We have always been kind of dependent on state funding to survive, so when they decided to change that model, we had to lay off employees."

To make matters worse, the United Way's Central Carolinas branch, long a major source of funding, slashed its grants to 97 community groups after its former president's $1.2 million compensation package became a scandal. "I've never seen it so bad," says new UWCC executive director Jane McIntyre, then the chief executive of the YWCA. Between 2008 and '09, she says, the YWCA saw its donations from her new employer drop by 37 percent. "Donors had less money, foundations were giving less because the stock market was in ruins, and then government funding really started to decrease."

With many other nonprofits struggling, Crisis Assistance Ministry helped coordinate charitable efforts in the area to make up for $2.4 million in cuts to the social services agency's budget. A flood of private donations, sparked by a wealthy resident's million-dollar contribution, seeded an emergency fund with $2.7 million.

The central role of Hardison's group in that fundraising effort can't be overstated, according to Yi. "Crisis Assistance Ministry helped secure the last safety net for these people," he says, "before they fell through the cracks and hit the ground."


To achieve broad local collaboration, projects like the kind organized by Crisis Assistance Ministry upend the traditional delivery of social services, such as a highway building project directly funded, planned and staffed by public employees, in favor of less-tested methods.

In Atlanta, where increased parkland and public transit had long remained just out of financial reach, community leaders, philanthropists and local businesses joined forces to advance construction of the BeltLine, a 20-year, 22-mile proposal to use existing right-of-way to encircle the central portion of Atlanta with transit, trails and parks. A nonprofit, the BeltLine Partnership, will pick up the tab.

In Buncombe County, N.C., the nonprofit group Bridge to Independence teamed up with local vocational schools and state prison officials to tackle recidivism by helping recently-released prisoners learn new skills and coaching them as they readjust to life outside. The group's holistic approach includes psychological counseling, housing assistance and job training.

These kinds of models are based largely on recognition of the value of grassroots buy-in. "It's about allowing communities to be entrepreneurial and innovative because your neighbors have a real investment in the success of that project," says Kildee, the president of Community Progress.

Kildee, a former county treasurer in Michigan who is now running for Congress, helped start a land bank in Flint that dealt vacant properties. The most effective return on investment, he says, required engaging local social groups, from churches to scout troops and neighborhood associations, calling on them to help maintain nearby properties.

"The level of participation was really high, the engagement was really good and it went beyond what we'd have seen if we had hired some property manager in government or a private contractor," Kildee says.

Debra Berg, the creator of a nonprofit network and author of "The Power of One," traces the push for community engagement to Habitat for Humanity, the Christian ecumenical housing nonprofit founded by Millard Fuller in 1977. "He had this idea, which goes back to America's origins, for creating a model in which local communities could build housing for people in need," Berg says. "And that's been replicated to the point that now 2 million people are homeowners rather than renters thanks to that organization."

Berg says she started the National Institute for Civic Enterprise network, which supports nonprofits, after conducting eight years of research into "everyday people who were doing things -- without the help of the government -- to get kids out of at-risk problems, restoring neighborhoods, training the unemployed and it was all below the media radar." She attributes the growth in these organizations to the lingering effects of the Great Recession, such as shrinking government budgets and mounting unemployment and poverty.

Paradoxically, some say, the decline in public funding has sometimes helped improve the notoriously poor financial management skills of many nonprofits, forcing them to do more with less. In Charlotte, the recession squeezed a few groups, like Summit House, out of existence. But it also forced some groups to tighten up their operations and their focus.

"The groups that survived were the most resilient and the most creative, those that know how to take a dime and make a dollar through efficiency, those that have diverse funding streams and not just government funds, and those that stay focused on their mission," says United Way Central Carolinas executive director McIntyre.


Community engagement-based initiatives, of course, are a long way from truly making up for the decline in government aid. While Berg argues that these nonprofit efforts ought to represent a template for future social assistance programs, critics dismiss them as mere stopgap measures that cannot truly replace a large-scale governmental safety net.

"There is a huge amount going on with regard to economic alternatives that are trying to do something for a neighborhood or a state or a city," says Gar Alperowitz, a professor of political economy at the University of Maryland. "If you regard that as filling the gap, it's obviously inadequate."

Alperowitz argues that local efforts won't have lasting impact if they don't lay the groundwork for a policy thrust on the state and federal level, citing the 20-year period of progressive labor legislation in Wisconsin and California that preceded the New Deal.

Even advocates of community-driven initiatives concede that the model breaks down when tasked with large-scale infrastructure development.

"Building a bridge or fixing a highway are complex projects with many moving parts, and it's easier to put that type of approach on a drawing board than it is to execute," says Kildee, citing the chaos of private roadways that proliferated in the 19th century. "We moved away from that way of doing things for a reason, because it makes sense to make it a public function."

"Now, in some places -- you are seeing the sale in Indianapolis of the water and sewer system for $400 million to a private company," Kildee adds. "There will come a time when that system needs substantial reinvestment, and can that private firm be trusted to make that priority when profit is the bottom line?"

And since community initiatives principally rely on some combination of charity and local business interests, a bottom-up approach offers little relief to economically barren areas. In the resource-weak urban Northeast and Midwest, among other regions, such initiatives can hardly hope to fill the gap.

"You're going to see more and more of these initiatives because you have this tremendous untapped resource in the people themselves," says Schmitz. "But all of the efforts still require resources and some are stopgap measures. There is a reality that some of this austerity is here to stay and we have to be prepared to think smarter about how to work within this environment."

Count Fitzgerald among those glad that such efforts, sustainable or not, are under way. Before Project Hope, she says, "I had no felonies and no drug problems, I was just having a hard time." Even while pregnant and homeless, she managed to knock on doors and mail out resumes, but despite good references, she says, she could not get hired.

Project Hope gave her the support to tackle those problems in a slightly different order. A housing counselor found her an apartment with an initial rent contribution of just $50 that was within walking distance of a grocery store and the train. Once she landed a job, as a manager at McDonald's, she had some time to save up before she had to start paying a larger portion of her rent.

In the intervening year and a half, Fitzgerald has been able to move further toward self-sufficiency in providing for herself and for her young daughter. The program hasn't forgotten about her, though. "My case worker comes to my house every other week to have a sit-down and go over my progress, to help me get a better job that fits my skills," she says.

Community-based initiatives may be harder-pressed to rebuild a school or a bridge. But, Fitzgerald says, "If you're homeless and living in a shelter, projects like this give you a place to stay and help you rebuild your life."