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Executive Summary

A National Imperative: Joining Forces to Strengthen Human Services in America is a report commissioned by the Alliance for Strong Families and Communities and the American Public Human Services Association(APHSA) and drafted by Oliver Wyman and SeaChange Capital Partners. This groundbreaking report focuses on the economic and social impact of human services community-based organizations (CBOs), and the need to strengthen and preserve their pivotal role in the larger human services ecosystem. It offers an important cross-sector call to action across CBOs, government, philanthropy, and other intersecting systems to address the challenges facing CBOs, which operate at the nexus of the human services ecosystem, and play a significant role in building foundational supports that contribute to the health, well-being, and success of individuals, families, and communities.

The project was supported by a national advisory council whose members come from the nonprofit world, government, the private sector, and academia and was funded 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.

Among the key findings and conclusions of the report is the critical role and value that human services CBOs play in communities across the nation—improving health outcomes and reducing health care costs;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; equipping people with disabilities 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. Key findings include:

  • The human services sector impacts the lives of an estimated one in every five Americans; human services CBOs employ more than three million Americans and generate in excess of $200 billion per year in economic activity through spending on wages, rent, fuel, and all the other inputs necessary to run organizations and deliver services.
  • Recipients of human services receive critical assistance and support—both preventative and when incrisis—which allows them to lead healthier and more productive lives. These outcomes then benefit broader society directly.
  • While human services CBOs are providing clear value today, their potential value is much greater than what has been realized so far. Increased investments in targeted, “upstream” human services that are demonstrated to improve the social determinants of health have the potential to transform how our society approaches and pays for human services. Additionally, this impact has a ripple effect on other vital and expensive sectors, including the health care, education, judiciary, and corrections systems.
  • Conversely, both recipients of human services and society overall face significant risks if the larger human services ecosystem, consisting of public sector health and human services organizations, private funders and foundations, and the many others who fund, arrange, and deliver critical human services, is not financially strong, integrated and delivering on its potential. The consequences range from negative physical health and behavioral health outcomes and chronic poverty to elevated health and criminal justice and corrections systems expenses.

Against the backdrop of an increasing need for human services, driven by persistent poverty rates, income inequality, an aging population, and the challenge of the opioid epidemic, the financial stability of CBOs is increasingly becoming tenuous, which will make realizing its transformative potential and contributions to the larger ecosystem, a healthy society, and strong economy difficult. Challenges include:

  • Many CBOs are running persistent operating deficits, in part due to internal risk management practices and unfavorable contract terms that reimburse them less than the full cost of providing the outcomes being required.
  • Many CBOs have few or no financial reserves, meaning that they are vulnerable to any fluctuation,even temporary, in their expected revenue and cost levels.
  • Many CBOs face problems such as lack of access to capital for investment in technology and systemic barriers, which limit opportunities for data sharing and integration.
  • Compliance with the current regulatory and legal environment can place an undue burden on many CBOs who are forced to spend large amounts of staff time on paperwork to meet reporting requirements.

The report identifies five “north star” initiatives designed to improve population health and well-being,increase economic productivity, and lower social costs over time with and through the success of CBOs. When fully developed and implemented, these initiatives have the ability to set the sector on a path to unlocking its potential. They include:

  • Commitment to Outcomes—Efforts should be focused on a common set of widely used outcomes and core measures with accountability and appropriate flexibility. Funding should be targeted to outcomes and results rather than outputs or services delivered.
  • Capacity for Innovation—The human services ecosystem must develop its capacity for innovation through better data sharing and analysis, technological strategies, and knowledge and leadership exchange. Public and private funders will also need to recognize the importance of the capacity for innovation, and the need to support that through funding. The goal of innovation is for CBOs to identify and implement new and better approaches for managing human services consistent with the needs of today’s population.
  • Strategic Partnerships—CBOs must look for opportunities for deeper and disruptive partnerships,mergers, affiliations, and networks with other human services CBOs and related systems to realize maximum value and impact. Grants from public and private funders should include allocating financial resources toward partnership, merger, and network development activities.
  • New Financial Strategies—CBOs and their boards of directors must look to develop more robust finance and financial risk management capabilities, including scenario planning, recovery and program continuity planning, benchmarking and self-rating, reporting, and disclosure.
  • Regulatory Modernization—Regulators at all levels should engage with human services community-based organizations in a review and reform of CBO regulation, particularly in the area of litigation risk,which has become a serious issue for CBOs.

Addressing these complex and interrelated challenges will require a comprehensive response by human services CBOs, government, and philanthropy. The business case for making these changes is strong given the potential for larger economic and social returns. To achieve these goals will require our nation to embrace and invest in the potential value of the human services CBOs to do their part to build a society that is able to help all our citizens achieve their full potential.The authors of the report analyzed over 200,000 public available Form 990 tax filings from roughly 40,000 human service CBOs, administered an online survey which drew responses from 177 human services CBOs and 40 government agencies, and conducted interviews with more than 40 senior executives from human services CBOs, government agencies, and philanthropic foundations.

About the Alliance

The Alliance for Strong Families and Communities is a strategic action network of thousands of committed social sector leaders who through their excellence, distinction, and influence are working to achieve a healthy and equitable society. We aggregate the very best sector knowledge and serve as an incubator for learning and innovation to generate new solutions to the toughest problems. We accelerate changethrough dynamic leadership development and collective actions to ensure policies and systems provide equal access and opportunity for all people in our nation to reach their full potential through improvements in health and well-being, educational success, economic opportunity, and safety and security. 

About The American Public Human Services Association

The American Public Human Services Association (APHSA) is a bipartisan, nonprofit membership organization representing state and local human service agencies through their top-level leadership.Through our member network and three national Collaborative Centers, APHSA seeks to influence modern policies and practices that support the health and well-being of all children and families and that lead to stronger communities. APHSA connects its members to national policymakers and human services organizations across a wide circle of stakeholders in the health and human services sector, as well as key partners in education, housing, employment and others. APHSA also helps members build more capacity for their teams through access to our professional education and development conferences, technical expertise, publications and our Organizational Effectiveness practice. 

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