A National Imperative: Joining Forces to Strengthen Human Services in America (Jan 2018)

to our fellow citizens is a moral imperative. The improved outcomes also benefit society as a whole, through reduced costs and higher productivity • • Recipients of human services receive critical assistance and support – both preventative and when in crisis – which allow them to lead healthier and more productive lives. These outcomes then benefit broader society. • • The US economy also directly benefits from current economic activity spurred by the roughly $200 billion that CBOs spend per year on wages, benefits, rent, fuel, and all the other purchases necessary to run their organizations and to deliver services. • • While human services CBOs are providing clear value today, their potential value is much greater than what has been realized so far. Increased investment in CBOs and targeted, “upstream” human services that are demonstrated to improve the social determinants of health and future behaviors have the potential to transform how our society approaches and howmuch we pay for human services, but also a broader ripple effect on other vital sectors, including the healthcare, judiciary, and corrections systems. • • Conversely, both recipients of human services and society as a whole face significant risks if the human services ecosystem is not financially strong and able to deliver on its potential. The consequences range fromnegative health and behavioral outcomes to elevated health and criminal justice and corrections system expenses. At the same time, the need for human services continues to increase, driven by factors including underlying poverty rates and income inequality; the aging of the American population; and specific challenges such as the opioid epidemic. Against this backdrop of increasing need and huge future potential, a growing number of human services CBOs are not financially strong or sustainable – which makes it difficult for them to realize their potential and fully contribute what they are capable of to a healthy society and strong economy. About half of CBOs run persistent operating deficits, in part due to unfavorable contract terms with government agencies that chronically reimburse them less than the full cost of the programs and services being contracted for. Nearly one in three CBOs have minimal financial reserves, equivalent to less than one month of operating expenses. This lack of reserves makes them vulnerable to any fluctuation, even temporary, in their revenue and expense levels. CBOs also face problems such as lack of access to capital for investment in technology, staff development, and evaluation, as well as barriers across siloed information systems, which limit opportunities for data sharing and integration that are key to maximizing both efficiency and effectiveness. Addressing these complex and interrelated challenges will require a comprehensive response. This will not be easy. Significant changes will be required of human services CBOs. Significant changes will also be required of the government and philanthropic sectors. The business case for making these required changes and investments, as outlined below, is strong given the potential for larger economic and social returns; to do so, however, will require our nation to embrace the potential value of human services to transform our society. This report lays out five “North Star” initiatives which, when pursued by the entire human services ecosystem (including CBOs, government agencies, and other funders), can unlock the full potential value of human services CBOs, and set the US on a path to greater prosperity.

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