TABLE OF CONTENTS

Introduction
FY 1998 CSBG Funding and Expenditures
State Management of the Block Grant
The Clients Served by the CSBG Network
FY 1998 Resources and Programs
CSBG and Coordinated Resources
Trends in Network Resources and Expenditures
Conclusion
Notes

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

Data on the network's FY 1998 activities and clients were gathered by the Community Services Block Grant Information System (CSBG/IS), which is administered by the National Association for State Community Services Programs (NASCSP) and supported by the U.S. Department of Health and Human Services (HHS).

Forty-eight states, the District of Columbia (DC), and Puerto Rico provided information on the level and uses of their FY 1998 CSBG funds, the sources and uses of other funding administered by their CSBG local network, and the number and characteristics of the clients it served.

Congress appropriated $527,179,403 for the FY 1998 Community Services Block Grant (CSBG). This included a Block Grant to the states of $489.7 million, which is the focus of this report. It is hereafter referred to simply as "the Block Grant." Table A displays the major categories into which CSBG funds were appropriated by Congress for the three years ending in FY 1998.

The FY 1998 Block Grant expenditures by 50 states for the three primary categories of state CSBG activity are shown in Table B. This total includes appropriated FY 1998 funds, more than $22 million in funding carried forward from the previous year's federal grant, and about $19 million in state funding for the same purposes as the federal CSBG.

About 5 percent of funding was used for state administrative expenditures and about 4 percent was used for discretionary projects. Slightly more than the 90 percent required by law was provided to local eligible entities.

Forty-one states used the funds at their discretion for special initiatives to accomplish the statutory purposes of the CSBG. Collectively, they spent $20.2 million on a broad range of discretionary programs.

CSBG's state executives primarily worked in the Departments of Human Services, but a third were executives in the Departments of Community Affairs or Community Development, and the rest were housed in a variety of institutional structures. The Block Grant funded all or part of 495 positions in 46 states' administrative structures during FY 1998; the hours funded were the equivalent of more than 206 full-time employees (FTEs).

There were 1,122 local CSBG "eligible entities." Table C below displays the numbers of each type of local agency. It shows that the vast majority of these organizations (86 percent) were Community Action Agencies (CAAs).

These local agencies served all or part of 96 percent of the jurisdictions in the 50 states. Figure A shows the percentage of each state covered by CSBG services, FY 1998.

Figure A

Forty-six states reported that they provided services to more than 9.3 million clients who were members of more than 3.3 million families. The 975 local agencies that reported on the demographics section of the survey managed 89 percent of all the CSBG network's 1998 resources or nearly $4.9 billion.

The client data show that the network continued to serve a heterogeneous group of low-income Americans. The typical CAA client:

• Lived in a family with children.
• Was white and not Hispanic.
• Was very poor.
• Had family members currently working or with work experience.

Nearly three-fifths of the CAA client families included children under 18 years of age. Just over a third of these had both parents present, more than half were headed by single mothers, and single fathers headed another 7 percent. Almost a third of CAA client families were individuals living alone.¹

Children made up about 40 percent of all local agency clients, and this figure does not include children in client families if they themselves were not participating in CAA programs.

About 8 percent of those clients for whom age was reported were 70 years or older.

The CAA's clientele was ethnically diverse. The data on 6.7 million individual clients show that the majority, 53 percent, were white and non-Hispanic, 27 percent were African-American, and 15 percent were of Hispanic origin.

Nearly 3 million adult CSBG clients were interviewed in 36 states and provided information on their level of education. Only 50 percent had as much as a high school diploma or equivalency, and only one-quarter had undertaken any post-secondary study.

Nearly one-fifth of clients asked about their disability status qualified as disabled. Census data on incomes of U.S. households with a disabled adult member show they are among the poorest households.

About half of all clients asked about medical insurance were uninsured.

As Figure B shows, 71 percent of CAA client families' incomes were below the HHS poverty guideline of $13,650 for a family of three. In fact, two-thirds of these families in poverty had incomes at or below 75 percent of the poverty guideline, i.e. lower than $10,238 for a family of three. About 19 percent of client families had incomes above, but lower than 125 percent of, the guideline.

A comparison of the survey responses to Census data suggests CAAs served about 27 percent of the poor in FY 1998, a figure 7 percent higher than in previous years.² This national average masked interstate variation. In fact, in six states, the number of clients who were part of families in poverty was between 50 and 71 percent of all the state's poor.

Figure B

The data on the sources of client families' income in 44 states show that CAAs were serving a substantial number of workers, job seekers, and retired workers. Figure C groups the 10 sources of family income reported into three categories. Nearly 1.8 million families contained either active workers and/or job seekers receiving Unemployment Insurance and/or members with pensions or Social Security benefits. These households were 64 percent of all client households; more than 717,000 had only wage income, and nearly 85,000 were receiving Unemployment Insurance payments and actively seeking jobs. About 270,000 were working and receiving another form of income. In other words, nearly 1.1 million families were still active in the labor force at the time they came to the CAA for support, while almost as many others were retired.

The 1.1 million families reporting one or more publicly funded income sources, such as Aid to Families with Dependent Children/Temporary Assistance to Needy Families (AFDC/TANF), Supplemental Security Income (SSI), and/or General Assistance were grouped as "assistance" recipients for this analysis, even if they also had earnings. Approximately 537,000 client families in 44 states received AFDC/TANF at some point in the fiscal year. This figure represents a decline of 75,000 TANF families from FY 1997, while the overall number of CSBG clients remained static. This demonstrates the size of the population of very poor families that lost some of their historic income source yet needed assistance to obtain job placement and retention services, adequate wages, and basic necessities.

Figure C

The CSBG/IS asks for data first on all additional resources expended by CAAs and second on funds that are coordinated directly with CSBG funds for particular programs. The latter are referred to in the report as "CSBG-coordinated resources." Table D compares the total network resources and the coordinated resources in FY 1998.

In FY 1998, the total resources spent by the CSBG network in 49 states, including federal CSBG appropriations, were about $6 billion; if volunteer hours valued at the minimum wage were also included, this figure would have been nearly $6.2 billion. This total is less than all the actual expenditures made, as not all states responded to this section of the survey.

Every CSBG dollar was matched in the local network by $13.64 from all other sources. When only non-federal leveraged funds and resources are considered, CSBG leveraged $3.98 for each CSBG dollar. Further, when volunteer hours are factored in at $5.15 for every hour donated, the Block Grant leveraged at least $4.32 in non-federal resources for every CSBG dollar. In fact, private contributions of funds, goods, and services alone, nearly $489 million, represented more than a dollar for each CSBG dollar spent.

Approximately 71 percent of all FY 1998 leveraged resources in 49 states, or nearly $4 billion, came from federal programs other than the CSBG. The largest of these federal programs was the Head Start program, with nearly $1.7 billion in funding or 41 percent of all non-CSBG federal funding reported in the network. ³

States utilize the CSBG local network to deliver a large number of state-funded, low-income programs. State appropriations for general support of CSBG programs were allocated in 12 states, along with grants and contracts or grants for specific state low-income programs delivered through this network; these provided nearly $792 million in 49 states. Roughly 35 percent of state program spending was for early childhood development and child care programs, a figure more than 30 percent above the previous year's.

Forty-seven states reported on FY 1998 local government resources in the network totaling nearly $360 million.

Forty-eight states reported on private contributions to the CSBG network. The value of private funding and in-kind donations alone was nearly $489 million. This dramatic increase of 24 percent over the previous year reflects the addition of data never previously collected by the CSBG/IS, including the purchase of CAA services by private entities and client fees.

Nearly 27 million volunteer hours were donated in 43 states. When conservatively valued at the 1998 minimum wage of $5.15, they added an additional $138 million of resources, bringing the total private contributions to the network to more than $627 million.

This section describes the resources that were directly coordinated with CSBG-funded activities. Reports from 49 states provided details of the local uses of nearly $387 million of CSBG funding in FY 1998 and more than $3.7 billion from other sources that were coordinated with CSBG activities.

Figure D

The two largest categories of CSBG expenditures were for linkage programs and emergency services, as shown in Figure D above. About 21 percent of CSBG funds was dedicated to linkage initiatives and another 18 percent, or about $71 million, was devoted to emergency services by 48 states. The CSBG network agencies are a first local line of defense against the hardships brought on by personal economic and social crises, as well as against community-wide emergencies.

The proportional allocation shows that the priorities to which the CSBG is assigned are different from those of other funders. For example, CSBG was a far higher share of self-sufficiency program funding (27 percent) and of linkages funding (about 22 percent) than of other programs. Private contributions provided nearly 17 percent of resources for income management programs. Local government funds were a significant share of linkage and health initiatives. State funds are a large share of health, self-sufficiency, and, to a lesser degree, housing and linkage programs. The education programs received the bulk of coordinated funds, mostly from Head Start federal funds. Each funding source was not only additive but typically covered activities or clients not reached by the other sectors' coordinated programs, as CSBG and the funds coordinated with it are complementary.

It appears that the FY 1997 increase in the Block Grant funded more CAA personnel assigned to secure significant new state, local, and private resources for their low-income community. By FY 1998, nearly every state reported growth in at least one of those key sectors' contributions.

Figure E shows this leveraged funding in 44 states in constant dollars over five years. The FY 1998 federal share in real dollars was 2 percent below FY 1994 levels. Steady growth in resources in all other sectors saved the network from a precipitous loss of the capacity it needed in 1998 to respond to the continuing needs of the low-income communities. State resources were 31 percent higher than in 1997 and $145 million higher in real dollars than in any previous year. Real local funding was 11 percent above FY 1997 and about 7 percent more than in FY 1994. The private donations of funds and goods to the network increased 8 percent over the previous fiscal year's and represented a figure 16 percent higher than in FY 1994.

When the CSBG funds are considered together with all our funding, real network resources were higher in FY 1998 than in any of the previous four years.

Figure E

Inflation-adjusted CSBG resources were 15 percent higher than they had been five years earlier. The information on CAA uses of the Block Grant in Section IV indicated all areas of service were increased over the FY 1997 levels. However, as compared to two years earlier, self-sufficiency programs and health-related initiatives showed the greatest change.

In FY 1998, as in the previous year, the CSBG network was confronted with the challenge of meeting the needs of 35 million people in poverty and nearly as many more with low to moderate incomes and great needs. Local agency resources grew slightly to meet these challenges. The proportion of funding from the Block Grant was substantially higher, while other federal program resources were continuing to decline. Many of the federal resources historically available through CAAs to low-income populations with specific, urgent needs–such as youth, job market entrants, single-parent families, and the homeless–were terminated or reduced. State, local, and private contributions increased and kept the total at or slightly above historical levels. This pattern suggests strongly that new Block Grant funding, which first became available in early 1998, provided new staff resources assigned the task of mobilizing local, state, and private partnerships.

As the data on FY 1998 clients served by the CAAs illustrate, low-income communities remained home to extreme needs. The CSBG network reached more than a quarter of persons in poverty in their communities, but they found more people in need of assistance who were very poor. A larger number of their clients than in past years not only had incomes below the poverty threshold but were below 75 percent of the threshold. The growth in the network's resources was, therefore, extremely modest in light of the growing needs of each family and community.

¹ Dalaker, Joseph and Mary Naifer. United States Bureau of the Census, Current Population Reports, Series P60-207, Poverty in the United States: 1998, United States Government Printing Office, Washington, DC, 1998. These individuals have a poverty rate of 18 percent, which is second only to that of households headed by single mothers.

²United States Bureau of the Census, Small Area Income and Poverty Estimates, Washington, DC, 1998

³United States. Department of Health and Human Services, Administration for Families and Children. Head Start 1998 Fact Sheet, Washington, DC. 1999.