SeaChange Capital Partners Produces New Report That Sheds Light on Financial Health of Nonprofit Human Services Sector

Monday, January 22, 2018

SeaChange Capital Partners Produces New Report That Sheds Light on Financial Health of Nonprofit Human Services Sector

The Alliance for Strong Families and Communities and the American Public Human Services Association (APHSA) announced today the release of a groundbreaking new report on human services community-based organizations (CBOs), their economic and social impact, and the need to strengthen and preserve their critical role in promoting health and well-being and enabling all Americans to contribute fully to our communities and the national economy. A National Imperative: Joining Forces to Strengthen Human Services in America was commissioned by the Alliance and APHSA and offers an important cross-sector call to action to address the challenges facing CBOs, which play a vital role in the human services ecosystem, comprised of the nonprofit sector, government agencies, and the philanthropic sector. In fact, the study found that human services impact the lives of an estimated one in five Americans and CBOs account for nearly $200 billion in economic activity through the cost of delivering services. Despite that impact, both recipients of human services and society as a whole face significant risks if CBOs are not financially strong and delivering on their full potential.

“Through our combined efforts, we hope to improve the effectiveness of our organizations and the systems that support them and ensure that all Americans are provided with the opportunities to live well and reach their full potential.”

The report, which is built on rigorous data analysis, surveys, and interviews, was conducted and written by Oliver Wyman and SeaChange Capital Partners and supported by a national advisory council whose members came from non-profit human services, government, the private sector, and academia. Funding for the project was provided by The Kresge Foundation and the Ballmer Group, with additional support from the Health Foundation for Western & Central New York, Mutual of America, Selective Insurance Company of America, and the US Chamber of Commerce.

According to Susan Dreyfus, president and CEO of the Alliance: “America’s community-based organizations are essential to our society because they provide the foundational supports that enable individuals and families to do well in life, including provision of health and mental health services, support for safe and enriching environments for learning and development, access to well-paying jobs, and opportunities to stay active and connected to our community as we age. Despite our sector’s potential to transform some of society’s most vexing challenges and have an impact on a wide range of systems including health care, education, and the judiciary system, there are significant constraints faced by CBOs. Solving these issues will require the united efforts of CBOs, policymakers, and our public sector peers to change business practices, including investments in technology and employees, adoption of risk management procedures, changes to outdated approaches to procurement and contracting, creation of actuarial soundness to rates, and modernizing of our regulatory environment.”

“Realizing the transformative potential of the human services sector is achievable when we have a full landscape view of the factors impacting the sector—both opportunities and challenges—and can work together to co-create solutions,” said Tracy Wareing Evans, CEO of APHSA. “This report provides important insights into how the broader human services ecosystem—including the public sector, policymakers, private funders, industry associations, and universities and think tanks—can help clear roadblocks and design new pathways that will help the sector build on its many strengths. These cross-sector partnerships are a key to assuring the sector’s financial sustainability and lasting impact in our communities.”

Among the key findings of the report is the critical role and value of human services community-based organizations in improving health outcomes and reducing health care costs by recognizing and addressing the social determinants of health. These include ensuring children are safe and live in supporting neighborhoods, can succeed in school and have strong and economically secure families; helping older adults maintain a high quality of life and stay connected to their communities; equipping people with disabilities with tools and resources so they can live their lives fully; building quality affordable housing; and providing crucial mental health and substance abuse services, particularly in the face of the current opioid epidemic. In addition, according to the report’s data, the human services CBOs have significant impact on local and state economies and the national economy through spending on wages, rent, fuel, and all the other inputs necessary to run their organizations and deliver services.

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