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Go Ask ALICE: Down the Rabbit Hole

Illustration by John Tenniel

The end of the calendar year is a time often associated with gratitude, reflection, family and giving. It is also a time when organizations which rely on the charity of the public send annual requests to their supporters, hoping for another year of commitment. This practice is so regular, in fact, many offices of non-profit organizations (NFPs) keep office hours through the holidays in order to accommodate individuals wishing to make their year-end gifts. Money is counted and processed long after the new year to be sure no check mailed and postmarked in December is left out. The gift, you see, cannot be counted by the donor for tax purposes, if the receiving charity does not count it in the previous year. This end-of-year dance is well known to anyone who has served on a volunteer board for, or ever worked for a non-profit organization. The recording of these gifts is laborious, tedious at times. But the organizations accepting contributions are just as much ingrained in the process as the donors. So, it is in this manner the wheels continue to turn. Creating opportunities for giving, raising funds and managing them consumes the majority of the time spent by directors or staff in a NFP. But it is only one of the hats these individuals must wear to keep their services available to their constituents.

When you think of that term, non-profit, what comes to mind? Maybe you think of organizations like Goodwill, The Salvation Army or The United Way. Do you think about your church or school? What about the programs that support meals for kids after school, who are alone all night when they get home? Charitable organizations exist to address many social issues, most of which you probably never considered. What if I told you, the counties in West Central Indiana that host US 40, Hendricks, Putnam, Clay and Vigo, are also home to over 2,000 registered non-profit organizations? For the sake of transparency, let’s assume half of those registrations include churches, arts programs, little league teams and groups operating more than one agency using the “doing business as” designation, to name a few. The rest probably fall into the category of what most of us traditionally define as “charitable” by supporting those “in need.” Even at 1,000 registered agencies, that’s a pretty staggering number. After one begins to investigate these charities, the problems they’re looking to solve, the number of people they employ and serve, it feels a bit like falling down a rabbit hole. Disorienting and amazing all at the same time.

Shuck Title 4

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The analysis of who, what, where and why, as it pertains to the non-profit world, is far too broad to address in this short series. It would in fact be like getting lost in a wonderland, and require a bit of madness and imagination to find our way through. I only intend to draw attention to the shifting view of charitable giving by highlighting changes in approach taken by larger organizations, how it affects smaller agencies and how it is driven by law.  

 

County Population (2017) Poverty Rate (2016) People In Poverty
Hendricks 163,685 5.8% 9,494
Putnam 37,702 12.6% 4,750
Clay 26,198 14.2% 3,720
Vigo 107,516 17.8% 19,138
Totals 335,101 11.1% 37,102

 

Based on the assumptions above, one thousand agencies are responsible for caring for over 37,000 people in four counties. That would mean there is one agency for every 37 people in poverty. That doesn’t sound too bad until you consider what it takes to provide food, clothing and shelter for almost forty people every day. A bare-bones budget in Clay County for example, for a household with two adults, a preschooler and an infant, requires $51,852 per year. That’s an hourly wage of $25.93, or twice the federal poverty guideline. If you didn’t appreciate the work done by the staff of NFPs in your community before, you might consider your perspective.  

Thanks to the internet, it is easier for very targeted efforts to raise funds in support of incredibly specific causes. National headlines involving mismanagement of funds by executive directors and CEOs have also driven many to change the way they give or raise money. Hence the incredible amount of organizations represented in the number above. From the national agencies we’re familiar with, to the family that needs financial support for a child’s medical bills, anyone can raise money for any cause. Even though the way charitable groups are receiving money is changing, their primary function remains the same. It doesn’t matter whether they provide diapers for infants or offer shelter to abused families, data overwhelmingly suggests these issues have a single factor in common: poverty.

But wait, you say, just because a family needs money for their daughter’s chemo treatments doesn’t mean they’re poor. They don’t fall into the poverty category, right?

Technically, that is true. In January of 2018 the federal poverty guideline was at $25,100 for a family of four. So, based on the federal poverty line, created in the early 1970s, many families are not “poor.” What most don’t realize is since that line was established it has only moved to account for inflation and taking into account the consumer price index.  That means for almost forty years, as the national economy has morphed drastically, nothing has been done to consider the accepted definition of poverty might be inaccurate. Who are the individuals and families that hover just above the official poverty line, but don’t quite make it to the upper middle class?

Meet A.L.I.C.E.

No, not the Disney version of the blonde girl in the blue dress. ALICE stands for Asset Limited, Income Constrained, Employed. The acronym was created by The United Way as a result of a pilot program conducted in New Jersey. It has since expanded to include Indiana and fifteen other states. ALICE earns above the federal poverty level, but does not earn enough to afford a bare-bones household budget of housing, child care, food, transportation, and health care. She is your child care worker, your parent on Social Security, the cashier at your supermarket, the gas attendant, the salesperson at your big box store, your waitress, a home health aide, an office clerk. ALICE cannot always pay the bills, has little or nothing in savings, and is forced to make tough choices such as deciding between quality child care or paying the rent. One unexpected car repair or medical bill can push these financially strapped families over the edge.

Do you know anyone that falls into that category? Suddenly, the face of poverty looks different.

To show how different, using information from several federal and state agencies, The United Way compiled a database to identify the percentage of population in the ALICE constituency.

 

County Population (2017) ALICE Rate ALICE Population
Hendricks 163,685 21% 34,373
Putnam 37,702 30% 11,310
Clay 26,198 23% 6,026
Vigo 107,516 29% 31,180
Totals 335,101 25% 82,889

 

The agencies that were taking care of 37 people a piece, now are supporting over three times that number. Thirty-six percent of the population of four counties is incapable of weathering a financial event. Not only is this part of the population not being acknowledged, the weight of responsibility placed on the NFPs trying to alleviate the issue goes unappreciated. Of the many hats worn by the directors of organizations that provide services for this segment of the population, none is sufficient enough to give its wearer the capability of sustaining their agency through changes already implemented at the federal level. In the second part of this series, we’ll see changes to tax laws in 2017 will drastically impact the financial support these organizations will be able to acquire going forward.

Sources:

Indiana Nonprofit Database: http://www.stats.indiana.edu/nonprofit/inp.aspx

United Way ALICE: https://www.unitedwayalice.org/indiana

U.S. Department of Health and Human Services: https://aspe.hhs.gov/poverty-guidelines

About Christian Shuck

Christian Shuck is a Greencastle native and Hope College alumnus who works in higher education as a major gift officer. Besides his contributions here, he also writes for his own blog cmshuckstories.com.  He currently lives in Terre Haute.

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