Cheap Date?
Defining the deal between the state and nonprofits B Y ALI CI A FR EESE
SEVENDAYSVT.COM 06.27.18-07.04.18 SEVEN DAYS 14 LOCAL MATTERS
THOMAS JAMES
O
ver the last 50 years government in the Green Mountains has withdrawn from providing many direct services to Vermonters in need. Instead, the state has outsourced that job — and hundreds of millions of dollars — to an ad hoc network of dozens of private nonprofit groups. They feed the hungry, house the homeless, care for the mentally ill and assist the developmentally disabled. These organizations tend to be more nimble, innovative and attuned to the needs of their community. Often they can deliver services at a bargain compared to state government. The arrangement seems appropriate in a state that cherishes local decision making but lacks county government, which might otherwise do the work. It fulfills the conservative desire for limited government and liberal support of humane, community-based programs. But this public-private safety net has vulnerabilities. It has grown so large and sprawling that no one in state government is able to say exactly how much taxpayer money goes to the nonprofit agencies. “It’s millions and millions of dollars,” said Sen. Jane Kitchel (D-Caledonia), chair of the Senate Appropriations Committee and a former secretary of the Agency of Human Services. “Is there a master list? Uh, no, I don’t think so.” “Nobody knows who’s doing what,” added Human Services Secretary Al Gobeille, describing the hodgepodge of social service organizations, some of which have similar or overlapping missions. And while the network of organizations has grown, funding for essential services has shrunk, straining the system and making some policy leaders question whether government is shirking its duties to residents by underpaying the nonprofits that provide critical state services. The theory was “You could do it cheaper in the community than you could in state government,” said Scott Johnson, who worked in state
government and led one of Vermont’s 15 nonprofit parent-child centers, the Lamoille Family Center. “That worked fine for 25, 30 years — as long as there was money.” A total of 498 Vermont nonprofits reported income from government grants on their most recent federal tax forms, according to Seven Days’ database of Internal Revenue Service filings. Many were founded, or grew into expanded roles, in the 1960s and 1970s as a result of two big changes in how social services are delivered in the United States.
President Lyndon Johnson’s War on Poverty in the ’60s spawned more than 1,000 “community action agencies,” publicly funded private nonprofits charged with rooting out poverty within their communities. Vermont has several such agencies today, whose missions encompass a broad range of activities: housing assistance, preschool, domestic violence support, weatherization and heating fuel subsidies, to name a few. They rely almost exclusively on government funding and receive a lot of it. In fiscal year 2017, the state paid
$6.9 million to Capstone Community Action, which serves central Vermont. Northwest Vermont’s Champlain Valley Office of Economic Opportunity got $6.7 million. Another wave of nonprofits grew up as Americans rejected the practice of warehousing people with mental illness and disablities in state-run institutions. In 1993, Vermont closed the Brandon Training School, the state’s facility for those with developmental disabilities, and began moving individuals out of the Vermont State Hospital, which once housed more than 1,000 patients. Its