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Hard times getting harder

Reeling from recession, nonprofit 'safety net' organizations brace for deep government-funding cuts

Already hurting from the recession, nonprofit organizations that serve poor and disabled citizens in the Midpeninsula -- providing the so-called "safety net" of services -- are bracing for even harder times.

As local leaders sweat out Sacramento's attempts to solve California's budget catastrophe, they say the worst consequences will fall, as they so often do, on the most vulnerable.

Some families will be forced to make hard choices: either buy food or pay rent or get health care and medicines, Santa Clara County Supervisor Liz Kniss of Palo Alto predicts. There will be higher numbers of drug-addicted and mentally-ill homeless people on the streets and minor crimes may increase as both nonprofit services and government programs that help support them disappear.

"The degree of budget cuts the governor is considering really will cause folks to become desperate in our communities," Kniss said, referring to moves in Sacramento to slash up to $21.3 billion from a $95.5 billion state general fund budget for 2009-2010.

Kniss and her staff have been reviewing a detailed list of hundreds of local private nonprofit organizations throughout the county that draw money from the county's general fund, which is expected to take as much as a 20 percent cut next fiscal year, starting July 1.

The eight-page, small-print list includes Catholic Charities, the Children's Health Council, La Comida, Avenidas, MayView Community Health Center, Salvation Army, InnVision, Fresh Lifelines for Youth, Momentum for Mental Health, Planned Parenthood and numerous others.

The Palo Alto-based Opportunity Center, operated by InnVision, may face a severe cutback its services that help homeless persons get their lives together.

"I'm on pins and needles, to tell you the truth," InnVision CEO Christine Burroughs said of the outlook for her agency. InnVision operates a Silicon-Valley-wide network of homeless shelters, food and self-sufficiency programs, including Palo Alto's Food Closet and counseling and guidance services at the Opportunity Center.

"I don't think most people realize how much money the county gives to outside groups like this," Kniss told the Weekly.

"It's very clear that (Sacramento) is going to eviscerate us as counties."

"It is going to be very difficult for nonprofits," Emmett D. Carson, president and CEO of the Silicon Valley Community Foundation, said of the bleak outlook.

"So many people don't realize that back in the 1980s, state and local governments outsourced much of their direct service work to nonprofits. So everything from helping to provide for homeless shelters, work-training programs and a whole range of services for the mentally ill are run by nonprofit organizations under contract with state, county and city governments.

"So these budget cuts will directly affect the ability of nonprofits to deliver services to community members that government had ostensibly wanted to support," Carson said.

Carson said his own foundation's endowment is down by about 25 percent due to the recession. He warned that planned government cuts "will not be made up by either foundation sources or private individuals, who have also been impacted by the market.

"So while needs will continue to go up, nonprofits will be less able to provide these direct services," Carson said.

"The same will be true of other nonprofits that are not providing direct services because their endowments have done poorly and people have less to give than they've had in the past."

Anticipating severe local impacts from the recession, the Silicon Valley Community Foundation last fall launched a special effort to support "safety net" food and shelter programs in both counties. In early May Carson announced a second round in that effort, saying the foundation will award $1 million to food and shelter providers.

In the first round back in December, the foundation -- with significant help from the David and Lucile Packard Foundation -- awarded $3 million to 47 "safety net" organizations.

The second round came after foundation officials saw the need growing.

"We know the need is continuing out there," Ellen Clear, the foundation's vice-president for grant-making, said.

One first-round recipient, Sunnyvale Community Services, spent $75,000 in six weeks. Samaritan House of San Mateo reported a 100 percent increase over January-to-March last year in demand for its hot-meals.

"In general we're hearing from nonprofits -- certainly those that provide hot meals -- that their numbers have dramatically increased," Clear said.

"One of the populations that seems to be in particular need is seniors having difficulty getting to the end of the month," she said. "And certainly families are more vulnerable."

Some are taking the drastic step of combining resources, including households, she said: "We know that many families are doubling and tripling up."

Then there is a completely new category of people who for the first time are seeking public assistance. Jobless and without current income, these applicants still have assets and thus are often ineligible for county services. They, too, then turn to community nonprofit groups, Clear said.

At 11 a.m. opening time, 125 people already were lined up for free hot lunches at St. Anthony's Padua Dining Room on Middlefield Road in Menlo Park recently.

Diners were varied -- a retired nurse, a well-groomed man in sports attire who arrived by bicycle, some moms with small children and a number of single men.

James, a client filling his plate with hot-dog-and-carrot stew, cabbage, bread and pizza, said he still co-owns a home in Palo Alto. But having lost his business some years ago, he said he feels he has "become a burden" on those he loves.

A semi-regular at the hot-lunch program, James observes that the number of diners is up lately -- an observation borne out by statistics.

St. Anthony's is feeling the recession directly. It served 150,000 hot meals in 2008 but expects to serve 175,000 in 2009, according to staff -- unless it is derailed by impending state and county budget cuts.

St. Anthony's volunteers are also noticing a new type of client. They are "fairly well-dressed people who are neither very old nor obviously homeless or really needy" and who are unfamiliar with the system, volunteer Bob Dehn of Menlo Park said.

"We see new faces every week, people I haven't seen in the 18 years or so I've worked there," Jim Bramlett, who chairs the dining room's advisory board, said of the new clientele.

"Our business always fluctuates with the economy," but usually not to this degree, he said.

As with many community nonprofit organizations this year, St. Anthony's expenses are up and revenues are down.

Dehn said it's been tougher to get protein foods from the Second Harvest Food Bank, a major source for St. Anthony's and the largest supplier of surplus and donated food to low-income people in Santa Clara and San Mateo counties.

St. Anthony's also relies on donations from grocery stores -- Safeway, Robert's, Draeger's, Lucky's and Costco. It also relies on several thousand Thanksgiving turkeys donated by the Kiwanis Club.

But a protein shortage at Second Harvest means that St. Anthony's has to purchase protein-rich foods, adding to costs. St. Anthony's is looking at a $250,000 shortfall in its $900,000 budget this year, according to staff.

On the revenue side, St. Anthony's relies on bequests, foundations, individuals and organizations. It has received help in the past from many local sources, including the Charles and Helen Schwab Foundation (based in downtown Palo Alto), the Palo Alto Community Foundation and the Peninsula Community Foundation (now the Silicon Valley Community Foundation). But with foundations taking a huge hit in their endowment funds, they have cut back support for nonprofit organizations, Bramlett and Dehn said.

In addition, individual donations to St. Anthony's are down, typical of many organizations. Racing to keep pace with the need, St. Anthony's volunteers are working harder to raise funds, the volunteers said.

At Second Harvest Food Bank, supplier to 328 agencies in Santa Clara and San Mateo counties through 1,061 distribution sites, managers said the agencies are urgently requesting more food.

"They're seeing more clients come in and the clients themselves are needing more food," Second Harvest spokeswoman Lynn Crocker said.

"So a family that used to pick up food once a week is now coming in twice a week. Maybe before they were working a full-time, minimum-wage job and could afford some food for themselves and their families. But if they've been laid off they can't afford to buy any food," Crocker said.

Santa Clara County saw a 60 percent increase in food-stamp applications from September 2007 to January 2009, and San Mateo County experienced a 117 percent increase in the same period, according to officials at both counties.

But food banks and food stamps -- officially the U.S. Supplemental Nutrition Assistance Program -- are meant as "supplemental" food programs and were never intended to provide three meals a day, Crocker said.

In the past six months, 31,000 calls have been made to Second Harvest's multilingual "Food Connection Hotline" -- 1-800-FOOD (3663) -- which connects people to food resources and other services in their neighborhoods. Second Harvest promotes the hotline through bus ads as well as "Do You Need Food?" business cards left at community agencies.

Hotline workers this year report a 50 percent increase over last year in the number of referrals they have made, Crocker said.

Health care is also a major at-risk area from the economic collapse, reduced grants and lowered donations, and government cutbacks.

"This year it has not been so good," Shamima Hasan, CEO of the non-profit MayView Community Health Center, said. MayView clinics in Palo Alto, Mountain View and Sunnyvale handled more than 19,000 visits of 5,646 low-income patients last year.

MayView's Palo Alto clinic, with a multi-lingual staff, occupies rent-free space in the North County Courthouse on Grant Avenue just south of the California Avenue business district.

Hasan's challenges are four-fold: donations are down; health-plan reimbursement rates are down; newly jobless patients can pay little or nothing of MayView's sliding-scale fees; and patients are coming in sicker.

"This year what's happened is that because people have lost their jobs and health insurance, more and more complicated cases are coming to us," she explained.

"Because they don't have insurance they don't go to the doctor. When it becomes serious they go to the emergency room; the emergency room doesn't treat them (long term) and they're sent to us."

Hard-pressed donors who have supported MayView in the past also have less to give this year, she said. For example, the clinic's immunization contract with Santa Clara County was cut from $25,000 last year to $16,000 this year, Hasan said.

"When people come in for immunizations we can't tell them, 'We can't immunize you.' The reductions have a great impact on us because at the end of the day we have patients and we have to see them."

Stanford University honored MayView in April with a 2009 "Community Partnership Award," celebrating collaboration on mentorship and health projects with Stanford undergraduate and medical students. Presented by the university's Office of Public Affairs and the Haas Center for Public Service, the award carried a stipend of $1,000.

MayView's largest single source of funding is Santa Clara County, which this year contributed $780,758 to the clinic's $2.75 million budget. No one is guessing at next year's contribution.

Supervisor Kniss said she is worried about the future of county public-health workers countywide, but in addition to workers at clinics, there are also those at schools. In Palo Alto's Juana Briones Elementary School, the workers make it possible for children with orthopedic handicaps to participate in mainstream classes. She has managed to save those positions in the past but now all bets are off, she said.

Services for seniors and people with disabilities are also facing shaky financial futures. At Avenidas, which offers a wide range of services for Midpeninsula seniors, President & CEO Lisa Hendrickson said county cuts could affect the Rose Kleiner Senior Day Health Center in Mountain View, which serves 62 frail seniors daily with classes, therapies and social activities.

"We're just waiting for details," Hendrickson said. "We receive funding from both counties for low-income individuals to attend. If they don't qualify for Medi-Cal, we ask them to pay a fee based on their ability to pay. Most take advantage of our sliding scale, part of which is funded by support from both of the counties."

This year the center received about $60,000 from Santa Clara County.

Avenidas' main headquarters in downtown Palo Alto also is a venue of the popular and lively La Comida hot lunch program, where people over 60 have an opportunity to socialize. Managed by a separate board of directors, La Comida is federally funded through the county, this year at $244,453, with some contributions from the City of Palo Alto as well.

La Comida board chairwoman Stephanie Beach said the group is awaiting word from the county on next year's budget. Under federal regulations, the lunch program may ask, but not require, a "suggested contribution" of $2 per lunch, which will rise to $2.50 next year, Beach said.

Lynda Steele, executive director of Abilities United in Palo Alto, echoes the sentiments of many of her nonprofit colleagues.

"I'd much rather be developing services to meet needs than crunching numbers to balance our budget," Steele said of the funding crisis.

The nonprofit organization, which provides services to children and adults with developmental disabilities, last week was anticipating a cut of $500,000 out of a $5 million budget. It could be more, depending on what is decided in Sacramento.

But Steele and others stressed it is important to stay focused on the longer-term view.

"We need ideas and solutions that are equal to the magnitude of the problems and challenges we're facing. We can't do it piecemeal," said Carson of Silicon Valley Community Foundation.

"There's a broader perspective that the process is broken. We need a systemic plan," he said.

InnVision's Burroughs credited Carson's foundation as well as the Packard Foundation with "stepping up to assist and helping to fill the gap," while many other foundations are pulling back or turning toward more global or "green" concerns.

"On the good side, we're seeing an increase in new individual donors," Burroughs said. "Because of this down economy they're aware of the increased need and those individuals who can give are coming forward."

"Leading from a position of strength is really important right now, where we remember our values and what is important to all of us," Steele said.

She said one of her favorite inspirations is a quotation from the late John W. Gardner, the former U.S. Secretary of Heath, Education and Welfare, author and Stanford University professor, which she likes to bring up in challenging situations.

"What we have before us," Gardner said in a 1965 speech, "are some breathtaking opportunities disguised as insoluble problems."

Related story:

A growing need for food

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