Sluggish economy hurting ASOs

Posted on 18 Mar 2010 at 4:24pm
By Tammye Nash | Senior Editor nash@dallasvoice.com

Legal Hospice forced to cut hours, staff; other organizations may have to follow suit in months to come


Roger Wedell

Take a glance at recent business headlines and it seems that the U.S. economy is, slowly but steadily, beginning to rebound from recession.

But it isn’t bouncing fast enough or high enough for at least one AIDS service agency in North Texas. And heads of other agencies said this week they may be forced to cut back, too.

Roger Wedell, executive director of Legal Hospice of Texas, has announced that his agency has been forced to reduce staff and services due to budgetary concerns.

Legal Hospice has had to eliminate one staff attorney position and reduce office hours by 10 percent, effective March 1.

AIDS Arms Inc. Executive Director Raeline Nobles said her agency might soon have to make some "hard decisions" on staffing and programs, while Steven Pace, executive director at AIDS Interfaith Network, said delays in allocating federal funds have left his organization up in the air.

All three officials said they have been forced to rely more and more on donations from individuals as federal dollars and grants from corporations and foundations have begun to dwindle.

For the Legal Hospice, much of the funding problems stem from a drastic drop in funds the agency had been receiving from the Interest on Lawyer Trust Fund Accounts program administered by the Texas Access to Justice Foundation — a situation Legal Hospice officials warned last year was coming.

"When the interest rates were 4-to-5 percent, that meant $18 million to $20 million a year from IOLTA. But now the interest rates now are 0 to 0.25 percent, and it has dropped to around $5 million a year," Wedell said.


Raeline Nobles

That money, he said, is shared between about 40 legal aide and pro bono programs in Texas. The drop, Wedell said, has had a drastic impact, especially when coupled with the fact that grants from foundations have decreased as those foundations have seen their income drop, thanks to the drops in the stock market.

"From 2008 to 2009, we saw our foundation grants go from $24,000 to $7,000," Wedell said. "Those foundations won’t see a recovery until their investments start to return to normal, and most of them work on a three-year average in determining what they can give in grants, so that throws it even further out into the future.

One bright spot for the Legal Hospice — and for other nonprofit service agencies in the Dallas area — is the individuals who donate to the causes.

"Fortunately, our individual donors still remain pretty strong and steady. Actually, attendance at our special events was up last year," Wedell said.

Legal Hospice has two special events annually: the FashionCITED fashion show coming up March 18, and "In The Heat of the Night," a party set for late August or early September.

Wedell said the Legal Hospice now operates with four full-time employees, including two attorneys, and one part-time employee. The agency’s budget for fiscal year 2010, stands at $419,500, and Wedell said hours donated by volunteers help keep that number reasonable.

"In 2009, we had $189,592 donated in volunteer hours, and we hope to see at least that much again this year," Wedell said.

The newly enacted cutbacks mean clients should expect long waits for appointments on routine issues, although the staff "will work diligently to meet the emergency needs of our clients in a timely manner," Wedell said, adding that Legal Hospice hopes to restore service to its previous levels as quickly as the economy will allow.

Legal Hospice offices will be open from 9 a.m. to 5 p.m. Monday through Thursday, and 9 a.m. to 1 p.m. on Friday. Client appointments at the Dallas office will be available only Monday through Thursday, with special appointments available at other times in emergency cases.

Client appointments available one day a month at off-site locations in Denton, Plano, Greenville and Oak Cliff will not be affected by the cutbacks, but client appointments in Tarrant, Johnson, Parker and Hood counties will be reduced to one day per week at AIDS Outreach Center in Fort Worth.

AIDS Arms
The recession has hit AIDS Arms with a double whammy, Nobles said this week: At the same time funding sources are dwindling, the caseload is increasing.

"We’ve had a flood of new clients who have become unemployed and now need to access our services," she said. "People are losing their jobs and their insurance. The number of new intakes we’re doing each month is growing at a rapid rate. We had thought that it would slow down. But it hasn’t, and as long as the economy stays south on us, the more people we’re going to have coming through our doors."

At the same time, Nobles said, AIDS Arms’ funding from the community is dropping, leaving the agency with "less money to provide services to more people."

She added, "We made it through last year. We had to tighten our belts really tight, but we made it. But this year isn’t showing any signs of improvement, so we are looking at some hard decisions we may have to make. The question is, can we continue to take in clients when we don’t have the staff to provide the services?"

Having to cut staff and programs would leave clients on waiting lists, a situation that could lead to serious repercussions in the future in terms of controlling HIV/AIDS in Dallas County, Nobles said.

"The longer HIV-positive people stay out of the Dallas County system of care, the sicker they get, and the more chance that they will infect someone else. The costs of caring for those people in the long run will just get higher and higher," she said.

AIDS Arms budget for 2010 stands at $7.7 million. The agency has 85 staff members and cares for 3,200 people with HIV/AIDS while providing prevention and education for another 4,000.

About 72 percent of the agency’s budget comes from government funds — much of which has been delayed at the federal level. Another 10 percent comes from foundation grants, which were "hit really hard last year and are not looking too much better this year."

AIDS Arms’ annual LifeWalk fundraiser in October is expected to cover about 6 percent of the budget, and Nobles noted proceeds from last year’s event were down. The remaining 12 percent of the budget comes from community donations.

"This year, we have to make $500,000 in community donations. Last year, our total donations were about $100,000," Nobles said. "You can see real clearly what a challenge that will be. But it has to happen just to meet our current client need. What if that $500,000 doesn’t happen? That’s the big concern."

The delay in allocation of federal Ryan White Act funding is also a rising concern, Nobles said. The first segment of those funds should have been allocated to be in effect March 1, with the second allocation coming April 1. Neither is on track.

"We can back-bill when the funds get here, but the problem is, none of us know what our awards will be. Without knowing that, we can’t plan — and we’re almost a month into the fiscal year already.

"One of the things that helps an organization survive is the ability to plan ahead. If you can’t do that, you’re hit in the teeth. It’s a real problem for all of us right now, including Dallas County. The county is hurting, too."

AIDS Interfaith Network
That delay in Ryan White funds is a thorn in the side of AIDS Interfaith Network, too, said Pace, leaving planning for that agency also up in the air.

"Our budget keeps changing from month to month, because every month we find out about another new cut," Pace said. "Right now, our budget for the year is $1.5 million — if we make it fully funded. But we are facing another $100,000 decrease in government funding."

He said AIN gets about 60 percent of its budget through a combination of government funds, with the remaining 40 percent coming from special events, community donations and foundation grants. But each time the government cuts or reallocates funds, the pendulum swings further and further toward the community donations and special events.

"In three years, half our total operating budget went away because of cuts in government funds. So far, we’ve kept up with the curve, and we’re grateful it didn’t happen all at once. That gave us the chance to find other sources. But with the economy the way it is, that puts a huge strain on those other sources of funding, and if the other sources don’t materialize, you’re left with having to cut back on services or people."

Like Nobles and Wedell, Pace noted that foundations have been hard hit by the economy, forcing them to cut back on their charitable giving. "So far, we’ve been lucky on that end, but whether we’ll get lucky next time around, we don’t know. All that funding is very competitive, and they may be tapped out."

The same holds true, he said, for LGBT community-based fundraisers like the Black Tie Dinner and the annual DIFFA events.

"If the economy hits those events hard, then it has a ripple effect. They can’t help out as much as they did. We’ve just learned that you can’t depend too much on any one funding source," Pace said. "We’ve had to change and evolve many times over the last few years to keep up. We’ve been fortunate to be able to sustain all our programs and serve all our clients. But right now, even trying to make a strategic plan for five years out is impossible."

The most recent cut in federal funds "will have a significant effect, I expect," Pace continued. "I suspect that we will lose at least one staff member, but whether that is a permanent cut, I don’t know yet."

Before the economic crisis hit, Pace said, AIN had a budget of $2 million and a 33 staff members. He said the agency augments paid staff with volunteers and interns, and much of the work to plan and stage AIN’s two main fundraisers each year — Bloomin Ball: Sowing Seeds of Hope coming in April, and The Great Gatsby: Get Your Flap On later in the summer — are done by those volunteers.

Despite the current gloomy outlook, Pace acknowledged that he has seen signs that the economy is turning around.

"Bloomin Ball is already almost sold out. We are doing well in terms of sponsorships and ticket sales, but we still see more of a struggle in terms of businesses and individuals being able to donate to our [fundraising] auctions. People are really getting creative in finding ways to put together groups to donate to the auctions.

"All in all, it feels like there is some positive movement," he said. "People are getting into a better place financially, or at least feeling better about spending their money. Part of the key to that, for us, is that so many people who support us come here and see what we are doing first hand. That’s a fortunate thing. You can see people getting fed, and that’s very tangible. People get it."

AIDS Services of Dallas
Don Maison, executive director at AIDS Services of Dallas which provides housing for people with HIV/AIDS, agreed that having people see firsthand the services an

This article appeared in the Dallas Voice print edition March 19, 2010.

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