Capital Research Center gratefully acknowledges the assistance provided by OpenTheBooks.com in compiling federal grant data for fiscal year 2017, which provided the impetus for this research. This piece is the first in an occasional series exploring the funding of nonprofit organizations by the federal government.
As of January 2019, the total U.S. federal debt is nearing $22 trillion dollars which, according to usdebtclock.org, equates to a per-citizen liability of over $66,000 and a per-taxpayer liability of nearly $180,000. These are shocking and, many feel, unsustainable levels of debt. Years of borrowing necessitated by each successive un-balanced budget represent paving stones in the highway to ballooning national debt; a highway that is often paved with the best intentions.
The ends to which government spending is to be directed may at once appear clear and pressing, and Congress may feel it has found just the programmatic means to address it. But what happens if those means become the ends themselves? Are independent nonprofits that rely entirely on one or two federal programs for their funding actually an effective means of implementing those programs? A fine case study for these and other questions can be found in two similar and little-known federal programs: the Department of Labor’s Senior Community Service Employment Program (SCSEP) and the Environmental Protection Agency’s Senior Environmental Employment Program (SEEP).
The programs themselves are simple enough. The SCSEP is a $400 million/year effort to provide subsidized, part-time work and job training to low-income Americans age 55 or older, with the intention of transitioning them to unsubsidized employment once their skills and experience are more competitive in the job market. It’s not a new idea—the program was first implemented in 1965—and the need for job training is undoubtedly even more pressing today, when possibly as many as 85% of jobs in the not-so-distant future have yet to even be created. SCSEP participants are placed at a local nonprofit or government agency where they work for the highest of either the local, state, or federal minimum wage. The EPA’s SEEP is a similar program, but it differs in that it is not limited to low-income individuals. SEEP participants are also placed directly in EPA offices and supervised by EPA employees, yet they are not themselves considered federal employees. Instead, their salary and benefits are administered by one of the SEEP’s grantee nonprofits. Such an arrangement is necessary in order to avoid running afoul of federal laws that prohibit agencies from targeting a specific age group for hiring.
Federal grant money for both the SCSEP and the SEEP is administered through a network of nineteen 501(c)(3) nonprofit organizations that recruit, place, and manage program participants. These organizations are:
- The National Association for Hispanic Elderly (Asociacion Nacional Pro Personas Mayores)
- The WorkPlace
- The AARP Foundation
- The National Caucus & Center on Black Aging
- Easterseals, Inc.
- National Able Network
- Senior Service America
- Goodwill Industries International
- Operation A.B.L.E. of Greater Boston
- The National Urban League
- VANTAGE Aging (formerly Mature Services, Inc.)
- SER-Jobs for Progress National
- The National Older Worker Career Center
- Experience Works
- The National Council on Aging
- Vermont Associates for Training and Development
- The National Asian Pacific Center on Aging
- The Institute for Indian Development
- The National Indian Council on Aging
An analysis of 2017 federal grant data compiled and provided to the Capital Research Center by OpenTheBooks.com shows that all nineteen nonprofits received SCSEP funds in fiscal year 2017; six of them also received grants for the SEEP.
Further analysis of recent tax filings indicates that thirteen of the nineteen are entirely or mostly funded solely by these two programs—meaning many would cease to exist if the programs were to be cancelled. For example, the National Association for Hispanic Elderly, the National Caucus & Center on Black Aging, and the National Asian Pacific Center on Aging received approximately 94%, 98%, and 84% of their total respective revenue from the programs—to the tune of almost $50.5 million. Experience Works, the largest single program recipient, took in over $91 million in SCSEP money for 2016, accounting for over 93% of its revenue. Additionally, the SCSEP and SEEP represent a sizable portion of the budgets of the six organizations receiving less than half of their revenue from the two programs. Included among this group are large and familiar names like the AARP Foundation, Goodwill Industries International, and the National Urban League. All receive millions for their SCSEP work.
It may be surprising, given the relative anonymity of these programs, that they each represent a significant portion of both Labor and EPA’s grantmaking to nonprofit organizations. In fact, CRC’s analysis of fiscal year 2017 grant data found that the top ten nonprofit recipients of grant money from the Department of Labor were organizations that administer the SCSEP. Of the EPA’s top fifteen nonprofit grant recipients, five were organizations that administer the SEEP. And, reflecting the fact that funding for these programs is channeled through the same group of nineteen 501(c)(3)s referenced above, four organizations were among the top nonprofit grant recipients for both Labor and EPA: Senior Service America, the National Caucus & Center on Black Aging, the National Asian Pacific Center on Aging, and the National Association for Hispanic Elderly. It’s a surprising revelation, considering how different the missions of Labor and EPA are.
Of course, none of this would be of much interest if the programs effectively delivered on their stated goals. Unfortunately, at least with respect to the SCSEP, the evidence appears to suggest otherwise.
Read the second installment of this special report here.