TABLE OF CONTENTS

INTRODUCTION

FY 1997 FEDERAL FUNDS APPROPRIATED

STATE MANAGEMENT OF CSBG FUNDS

THE CLIENTS SERVED BY THE CSBG NETWORK

THE RESOUCRES OF THE CSBG NETWORK

LOCAL CSBG PROGRAMS AND COORDINATED RESOURCES

TRENDS IN NETWORK RESOURCES AND EXPENDITURES

NOTES

Introduction

The Community Services Block Grant (CSBG) funds the anti-poverty efforts of a state-administered, local network of more than 1,100 community-based agencies. These organizations, predominantly Community Action Agencies, create, coordinate, and deliver a broad array of programs and services to low-income Americans.

In FY 1997, the CSBG local network was confronted with the challenges of meeting the needs of 35 million people in poverty and nearly as many more with modest incomes and great needs. The incidence of poverty in the US had dropped for the second time in three years, and there were 900,000 fewer individuals at or below the poverty threshold in 1997 than in 1996. However, for organizations whose mission was to overcome the causes of poverty, the demand for resources was not perceptibly abated. The family incomes of persons in poverty were, in general, lower than in the previous year. Indeed, the Census Bureau classified 41 percent of the poor as "severely poor" because they had incomes lower than 50 percent of poverty. The number of "severely poor" rose annually from 1993 through 1997; families in poverty in 1997 had incomes that averaged $6,600 below the poverty threshold for their family size.

Many of the resources historically available through CSBG-funded local agencies to low-income communities had been abruptly reduced, or even terminated, over the preceding two fiscal years. Dramatic policy changes in the largest government income support program for very poor families with children, the former Aid to Families with Dependent Children (AFDC) Program, took effect during 1997. AFDC, an entitlement program, was abolished and replaced with the Temporary Assistance to Needy Families (TANF) block grant to the states.

The data reported here have been gathered by the Community Services Block Grant Information System (CSBG/IS) survey, a voluntary reporting effort by the states that is administered by the National Association for State Community Services Programs (NASCSP) and supported by the US Department of Health and Human Services (HHS), Office of Community Services.

Responses to at least one section of the FY 1997 survey were received from 50 CSBG grantees, including 48 states, the District of Columbia (D.C.), and Puerto Rico. For simplicity, all of these grantees will be referred to as "states," except where indicated otherwise. The local agencies are referred to as Community Action Agencies, or CAAs, since 83 percent are organizations that qualify for that designation.

A. FY 1997 Federal Funds Appropriated

The CSBG network’s resources, an estimated $6 billion, were essentially the same as they had been in FY 1996. While funding for local programs from the state block grant portion of the Community Services Block Grant was substantially higher in FY 1997, most other federal program resources declined.

Congress appropriated $524,432,000 for the FY 1997 Community Services Block Grant (CSBG). Ninety-three percent of this appropriation, $489.6 million, was for the state block grant, which is the subject of this report. This figure included a significant increase of $100 million, or 20 percent above the FY 1996 level. Explaining its intent, the US House Committee on Appropriations wrote in its report:

The history of CSBG appropriations from FY 1995 to FY 1997 is shown in Table A.

* This program, the CSBG Emergency services tot he Homeless Program, was not funded after FY 1995. These expenditures are continuing activities from commitments of FY 1995 funds.

B. State Management of CSBG Funds

The states distributed the block grant for services and investments in their low-income communities. As shown in Table B, forty-nine states reported that 91.6 percent of this total was provided directly to local eligible entities for their programs, and 4.6 percent was used for state administrative costs.

Thirty-nine states awarded the remaining $17.3 million, or 3.8 percent, of their FY 1997 funds to a broad range of discretionary programs. These discretionary efforts included training and management development for local agencies, demonstration projects, statewide projects and planning, and support for partnerships with other community networks. The majority of states reported progress implementing Results-Oriented Management and Accountability (ROMA) systems, which involve adopting specific goals for the management of local programs, and measuring the achievement of those results.

In FY 1997, as has been the case in every recent year, more than 96 percent of counties in the United States were served by local agencies of the CSBG network. Figure A shows the reach of the CSBG network.

Figure A

These agencies were a mix of 941 CAAs and other eligible entities. CAAs are non-profit agencies governed by a tri-partite board consisting of one-third elected public officials, at least one-third representatives of the low-income community, and the balance drawn from leaders within the private sector including business, faith-based groups, charities and civic organizations. Other eligible entities included 106 local governmental agencies, 22 farm worker, tribal and similar entities, and 35 limited-purpose agencies. By funding the management, infrastructure, and operations of CAAs in FY 1997, the CSBG provided the institutional base for communities to meet, define, and coordinate responses to the problems of poverty.

C. The Clients Served by the CSBG Network

Forty-six states, including the District of Columbia (DC) and Puerto Rico, collected unduplicated counts of FY 1997 CAA clients. Together, these 46 states reported providing services to more than 9.2 million clients in more than 3.3 million families.

Demographic data obtained from agency interviews with about 6.7 million, or nearly three-quarters of the clients, describe one or more attributes of the individuals participating in agency programs and, in most cases, attributes of their entire family. At least 2.9 million client families, or 89 percent of the families, are included in the data on family characteristics reported. The data indicate that the typical CAA client:

• was a member of a household with children;
• was severely poor;
• was white, non-Hispanic; and
• had a family member working, seeking work, or recently in the workforce.

Family Composition

The average size of client families was 2.5 members, CAAs also served more than 752,000 clients who were living alone. Three-fifths of the CAA client families, or 60 percent, included children. Of the 1.8 million CAA client families with children, 41 percent had two parents present, while 53 percent were single mother families, and six percent were single father families.

Children

About 38 percent of all local agency clients in 44 states were children under the age of 18, and 44 percent of those children were five years old or younger, an indication of the CAAs’ major role in providing early childhood education.

Aged Clients

About 480,000, or eight percent of those clients for whom age was reported, were 70 years of age or older. CAAs provide crucial services to these elderly clients such as transportation, nutritional assistance, day care, and social or recreational programming. These services are designed to help these clients maintain their independence.

Ethnicity

The client population resembled the US population that was in or near poverty during FY 1997. The majority, 54 percent, were white and non-Hispanic, as were 46 percent of persons in poverty in the US in 1997. Clients of African-American and Hispanic origin made up 27 percent and 15 percent of the CAA client population respectively.

Barriers to Self-Sufficiency

The majority of the adult clients had low levels of education and thus faced obstacles to leaving poverty. Only 38 percent had a high school diploma, and only nine percent had any post-secondary study. More than 600,000 clients in 40 states were disabled. Nearly 1.6 million clients in 39 states were without medical insurance.

Income Levels

As Figure B shows, two-thirds of CAA clients had family incomes below the HHS poverty guideline of $13,330 for a family of three. CAAs in just 44 states served about 1.8 million families in poverty. Two-thirds of these families had incomes at or below 75 percent of the poverty guideline ($9,998 for a family of three).

Just 16 percent of client families had incomes exceeding the poverty guideline but lower than 125 percent of the guideline ($16,663 for a family of three). While CSBG and many of the other federal categorical programs administered by the CSBG network are available for these "near poor," the majority of CAA clients were severely poor according to the federal Census definition.

The percentage of all persons living in poverty in the nation who were served in 1997 by CAA programs can be estimated. In the 44 states reporting client income data, nearly 28.5 million individuals were in poverty, as were an estimated 5.8 million CAA clients. This indicates that, as in previous years, CAAs in these states served about 20 percent of the poor.

Figure B

Client Income Sources

The data on the sources of client families’ income in 44 states show that CAAs are serving a substantial number of workers, job seekers, and retired workers. Almost one million client families included members of the active workforce, those receiving unemployment insurance benefits, those with only wages, and those with wages plus another source. These families were approximately 38 percent of all client families. As Figure C shows, 14 percent of all 2.7 million client families had no income, 63 percent included workers or retired workers, and 44 percent, including some of the families with workers and retirees, received some form of assistance. The fact that so high a proportion of client families are "working poor" suggests that CAAs provide an effective system for reaching very low-income workers.

Figure C

Sources of Client Income, FY1997

2.7 million families in 44 states

Approximately 614,000 client families, or 23 percent, received AFDC/TANF at some point in the fiscal year, either alone or in combination with wages or another source of income. This figure, taken from 44 states, represents about 15 percent of AFDC/TANF families in the entire United States at mid-year in FY 1997.

D. The Resources of CSBG Network

The CSBG/IS survey collects data on the additional resources leveraged, managed, and coordinated in two ways. First, it provides information on the sources and levels of all federal, state, local, and private resources—other than the CSBG itself—which were spent by CAAs. These figures, combined with the CSBG, are then referred to in this report as the "total resources" of the CSBG network and are discussed within this section.

Second, the CSBG/IS asks for data on only those other funds that are coordinated directly with CSBG funds in particular programs. Those funds are discussed in section E below.

Total Resources

As shown in Figure D, the total resources of the CSBG network in 46 states and D.C., including federal CSBG appropriations, were $5.3 billion in FY 1997. Extrapolation of these figures to all agencies in all states suggests the total resources of the network were approximately $6 billion. The majority of these funds, $3.5 billion, were from federal sources other than the CSBG. However, approximately 27 percent of the network’s resources were from state and local government and private donors.

Figure D

The CSBG Network Total Resources, FY 1997

5.3 billion in 47 states

Every CSBG dollar was matched in the local network by $13.33 from all sources. When only non-federal leveraged resources are considered, a measure of the local community’s confidence in the network, CSBG agencies leveraged $3.50 for each CSBG dollar, as shown in Figure E. In fact, private contributions of funds alone, $367.5 million, equaled $0.86 for each CSBG dollar. When volunteer hours are factored in at the 1997 minimum wage, $5.15, at least $3.88 in non-federal resources matched every CSBG dollar, making the private resources total greater than $507 million.

Figure E

*Includes volunteer hours valued at 1997 minimum wage of $5.15 per hour ($139 million).

Federal Resources Other Than CSBG

Approximately 66 percent of all FY 1997 resources, $3.5 billion, were from federal programs other than the CSBG allocated to state governments or directed to the local agencies. These funds generally came from federal means-tested programs that served low-income people, such as Head Start, the Low Income Home Energy Assistance Program (LIHEAP) and maternal/child nutrition programs. CAAs reported receiving more than 41 percent of the federal FY 1997 Head Start allocation to their 47 states. In the 38 states where the network reported LIHEAP funding, it managed about 60 percent of all the LIHEAP funds. The Department of Energy Weatherization Assistance Program (DOE/WAP) was virtually entirely managed through the CAAs. The energy programs’ figures represented significant declines from the FY 1996 levels, as program funding reductions enacted in 1995 took effect. The Department of Health and Human Services, through the states or directly, provided most of the other federal funds for local agency programs, including significant allocations for childcare ($118 million) and social services ($107 million).

State Resources

States utilize the CSBG network to deliver a large number of state-funded, low-income programs as well as to administer federal funds. State appropriations for general support of CSBG programs were allocated in 13 states, along with grants and contracts or grants for specific state low-income programs delivered through this network. State funding provided $589 million to local agencies in 47 states. Roughly 35 percent of state-appropriated funds were for early childhood development and childcare programs in 44 states, presumably in coordination with the federal childcare funds described above. About nine percent was for improving health and/or curbing substance abuse. Thirty-six states reported CAA spending of $63 million for their housing programs. Thirty states spent another $32 million on programs for the homeless. State nutrition related funding totaled $36 million in 35 states.

Local Resources

Forty-four states reported on FY 1997 local government resources in the network totaling more than $301 million, including $125 million in unrestricted local government appropriations for general support of agency programs and services. Local government contracts to CAAs for services to the poor in 36 states were significantly increased over FY 1996 to $128 million.

Private Resources

CAAs provide opportunities for private donors and volunteers to donate their resources to improve the welfare of families in their communities. The value of private funding and in-kind donations was nearly $368 million, nearly ten percent over the FY 1996 level. The 27 million volunteer hours donated in 42 states, when valued at the 1997 minimum wage, added an additional $139 million, bringing the total private contributions to these states’ networks to nearly $507 million.

E. Local CSBG Programs and Coordinated Resources

Information on coordinated resources, those used in tandem with CSBG, provides the correct perspective on how local agencies use CSBG-paid staff and their CSBG-funded organizational infrastructure to organize a much larger set of low-income community resources and direct it to their communities. The CSBG's mission, self-sufficiency for the poor, is a goal typically met by organizing a variety of interventions for the multiple changes a client pursues to improve his or her life. The people, facilities and equipment used to mobilize, coordinate, and leverage resources are largely funded by CSBG. The block grant rules permit them to shape national and state programs to meet local needs.

States describe coordinated uses of 70 percent of the "total resources" reported above. Not all resources in CAAs are directly coordinated with CSBG-funded activities or facilities.

Reports from 48 states provided details of the local uses of nearly $375 million of CSBG funding in FY 1997 and of $3.2 billion from other resources. This figure is about ten percent higher than the total reported for FY 1996 in part because the delayed federal funding following the closure of the federal government affected program completion and reporting. The two largest categories of CSBG expenditures were for linkage programs and emergency services, as shown in Figure F below. About $76 million, or 20 percent, was dedicated to linkage initiatives. "Linkage" is the term used for programs that involve a wide variety of local services and programs to combat the community-wide causes of poverty, as well as the causes of individuals’ poverty.

Another 19 percent of CSBG funds, more than $70 million, was devoted to emergency services by 47 states. This figure includes about $3 million from ESHP funds in 13 states. The size of the commitment demonstrates the unique role of the CSBG network agencies as the first line of local defense against the hardships brought on by personal economic and social crises, as well as by community-wide emergencies.

Forty-four million dollars was spent on nutrition programs and the same amount was devoted to comprehensive programs for family self-sufficiency. More than $39 million went for education programs, and about $33 million for employment initiatives. About $30 million supported housing programs; nearly $16 million funded programs that assist low-income families in better managing the income they have; nearly $10 million was spent on health care services; and an additional $13 million was used on other services that could not be categorized in these nine program areas.

Figure F

CSBG Expensitures, FY 1997
by Service Category*

374.9 million in 48 states

*Percentages exceed 100 percent due to rounding.

As compared to FY 1996, most of these categories showed a slight increase, but one program area absorbed the lion’s share of the increased funding. The use of CSBG for "self-sufficiency" programs increased significantly; the $44 million expended represented nearly a 50 percent increase. A formal self-sufficiency program is a comprehensive case management approach which empowers and nurtures individuals and families toward self-sufficiency. At a minimum the following elements are included:

• a comprehensive assessment of the issues facing the family and the resources the family brings to address these issues;
• a written plan leading toward self-support, created with each family;
• comprehensive services that are delivered over a significant time period;
• a case management methodology used to track and evaluate progress, as well as adjust the plan as needed; and
• staff who are flexible and establish trusting, long-term relationships with participants.

Coordinated Funding

Forty-seven states were able to report on other resources coordinated with the CSBG. Each funding source was not only additive, but typically covered activities or clients not reached by the other sectors’ programs. Coordinated resources of nearly $3.2 billion were included in the report. Figure G shows the proportional contribution of the major funding sources by program area. The contrasts among them suggest how CSBG and the funds coordinated with it are complementary.

Figure G

Percentage of Local Agency funcing by Source, FY 1997

3.6 billion in 48 states

F. Trends in Network Resources and Expenditures

Overall, inflation-adjusted FY 1997 resources were lower than in Fiscal Years 1993 and 1994, when funding peaked, but just one percent below the FY 1996 level. This section analyzes five-year trends in the local network’s total resources and in CSBG. All dollar values have been inflation-adjusted to the 1993 dollar level. The data are from the 44 states that reported in all five years.

Figure H shows the non-CSBG funding of the 44 states in constant 1993 dollars. Clearly, the real value of the local agencies’ non-CSBG resources declined significantly from FY 1994 through FY 1997. Nevertheless, their real value was four percent higher than it had been in FY 1993.

Figure H

Trends: CSBG Network Funding
Non-CSBG Sources, FY 1993 - 1997

Based on annual reports from 44 states

*Includes volunteer hours valued at each year’s minimum wage.

The three-year decline shown in the chart was almost entirely due to dropping federal resources, which were five percent below the real FY 1996 level and nine percent lower than in FY 1994. This pattern shows the impact of federal funding reductions in discretionary domestic programs, especially for low-income individuals. The drop in network resources is slightly less than the ten percent drop across all low-income programs, as many CAAs were funded in part by Head Start, one of the few programs which was increased over the time period. In addition, no other federal program, except small rural housing initiatives, experienced the same one-year, 25 percent rate of growth as did CSBG itself.

If the federal funding is not considered, resources increased; FY 1997 network funding from states was 16 percent above the real FY 1996 total and more than 20 percent above the real level of five years earlier. Local and private contributions were nearly 20 percent higher in real dollars than in FY 1993 and about five percent higher than in the previous year. However, the smaller scale of those increases was such that they made up only 15 percent of the one-year loss of federal funds.

As illustrated in Figure I, the increase in FY 1997 appropriations for the CSBG, when converted into constant dollars, reversed a long pattern of declining real resources and provided a sharp contrast to the attacks on most other low-income programs. Even with the loss of the Emergency Services to the Homeless Program (ESHP), real CSBG resources were 23 percent higher in 1997 than in the previous year and 17 percent higher than five years earlier. This gives the CSBG a growing, though still small, relative share of the total resource base, but it can be used to add to and tailor other available resources. The mobilization of more state, local and private resources, while it did not bridge the gap created by federal cuts in categorical programs, was a key part of the CSBG-funded response to continuing low-income community needs.

Figure I

Trends in CSBG Appropriations FY 1993-1997
State Block Grant & ESHP