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Still Hurting

September 21, 2009


Financial armageddon has been averted. A second Great Depression is off the table and, thanks to the bold actions of central bankers and governments around the globe, the "Great Recession" is on its way to becoming an unpleasant memory. Or so policy makers and the financial press would have us believe.

Not surprisingly, the reality for folks on Nonprofit Street is a little different, as two new snapshots of economic conditions in the Midwest make clear.

Based on a survey of nearly four hundred nonprofits in the Milwaukee metro area, the 13th Annual Report Card on Charitable Giving from the Greater Milwaukee Foundation found that the economic downturn has caused a drop in giving, with 63 percent of the respondents saying the state of philanthropy in the region is getting worse. And of organizations providing direct services to clients, 62 percent said that demand for assistance is increasing.

Other findings from the report:

  • More than 80 percent of organizations have cut costs due to budget constraints, and one in four has laid off staff;
  • Only one in four organizations describe themselves as financially healthy and not currently vulnerable;
  • Over half of the organizations surveyed have six months or less operating reserve, while 31 percent say they are running an operating deficit in the current fiscal year;
  • Half the nonprofits responding to the survey have considered collaborating with another nonprofit within the past year, nearly one in three has explored merging with another nonprofit, and five have considered closing.

The news isn't much better in Chicagloand, where the most recent installment of Metro Chicago Vital Signs, a monthly report from the Chicago Community Trust, found continued distress in the metro area's economic health. To wit:

  • The region’s unemployment rate remains above the state and national averages at 10.5 percent;
  • While remaining steady in the second quarter, layoffs rose sharply in July to 25,119 -- well above the 7,674 at the same time last year;
  • Food security continues to be a problem for many in the region, with the number of households relying on food stamps reaching record highs, at more than 470,000, and the number of individuals relying on food pantries climbing back above 400,000;
  • Calls for homelessness prevention aid remained steady in August, at over 5,400;
  • A drop in foreclosures around the region in the second quarter, which many attribute to the Illinois Homeowner Protection act signed into law in April, may be short lived, with preliminary data for the third quarter revealing a sharp increase in foreclosures after the 90-day period in which homeowners are allowed extra time to deal with possible eviction.

As New York Times columnist Bob Herbert has been pointing out for months now, the country is in the midst of an employment crisis. Indeed, in the current issue of TIME magazine, Joshua Cooper Ramo reports that the number of long-term unemployed (more than twenty-seven weeks) in August was the highest since the Bureau of Labor Statistics began tracking the number in 1948, while the total number of nonfarm payroll jobs today -- roughly 133 million -- is about the same as it was in 1999.

"That is why," writes Ramo, "the problem of how America works needs to become the focus of an urgent national debate. The jobs crisis," he adds

offers an opportunity to think in profound ways about how and why we work, about what makes employment satisfying, about the jobs Americans can and should do best. But the ideas Washington has delivered so far are insufficient. They reflect a pre-9%-11% way of thinking as much as old defense policy reflected a pre-9/11 notion of who our enemies were. The funding for job creation in the American Recovery and Reinvestment Act was based on an assumed 8.9% unemployment rate. Now 15% is a realistic possibility. And yet we're hearing few interesting ideas about how to enhance America's already groaning unemployment support system as millions of Americans sit idle. Tangled in the debate over health care -- and bleeding political capital -- the White House may find itself too weak and distracted to deal with the danger of joblessness....

That would be a tragedy.

Starting tomorrow, I'll be blogging from the 5th annual Clinton Global Initiative meeting in midtown Manhattan. CGI is one of the premier gatherings of the movers, shakers, and thought leaders responsible for maintaining and improving the architecture of globalization. And globalization has been one of the most important factors -- if not the most important -- in the restructuring of the American labor market over the last thirty years. I'll be very interested to hear what the many panelists -- and former President Clinton himself, who voiced his concern at last year's CGI meeting about a populist backlash in this country against free trade and global money flows -- have to say about the issue.

In the meantime, you can vote on whether the recession is over in our current PND poll. Or weigh in below on the jobs crisis, the growing pressure on safety-net services, and/or the impact of globalization on American workers.

-- Mitch Nauffts

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Quote of the Week

  • "[L]et me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...."

    — Franklin D. Roosevelt, 32nd president of the United States

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