On Dec. 6, 2022, Heartland Family Service announced it was laying off 30 employees. The cuts were attributed to a loss of nearly $3 million in philanthropic funding over the upcoming year. At the time, HFS President John Jeanetta told KETV that he was worried about cutting housing programs when costs were rising and putting a roof over people’s heads was already difficult.
Exactly two weeks later, on Dec. 20, the City of Omaha informed residents of the Legacy Crossing apartments of a decision to vacate the property, citing a myriad of code violations. The city asked HFS staff to provide tenants with relocation assistance.
The tenants weren’t the only ones caught off guard. HFS staff, including senior leadership, had been preparing to take time off for the holidays. But Jeanetta said it was an honor to be asked to help.
“It’s the kind of thing our staff lives for … we certainly don’t do it for the pay,” Jeanetta said. “Many employees who we had just told we’d be letting them go were working through the holidays, working long hours … That’s probably the hardest part.”
Housing programs are not the only ones feeling strained. Stephanie Sullivan, the communications director for the Food Bank for the Heartland, said they are seeing the worst food insecurity rates in their 40-year history.
In fiscal year 2020, Sullivan said, the food bank served just over a million individuals. They expect to serve nearly 1.8 million individuals in 2023. That’s nearly a 75% increase.
“We’ve been operating in crisis mode for the last few years with no breaks. Between the floods of 2019, the pandemic, then inflation, and now the threat of a recession, it’s really bad,” Sullivan said. “We’ve heard from people in southwest Iowa who have been going to their local pantry for the last four years because they lost their house in the floods and haven’t gotten it back since.”
Pandemic relief funds from the CARES Act and American Rescue Plan Act (ARPA) have buoyed nonprofits and social service agencies since the start of the pandemic. But that support is temporary, and advocates say the need is not going away. In fact, it may get worse if the country falls into recession, as many expect.
“The amount of people laid off because of the pandemic prompted all this funding, but with people having gotten back to work, there’s a lot of people who assume the need went away when it’s only gotten worse,” Sullivan said. “Most people are just one crisis away from food insecurity.”
Tom Hoy is the vice president of development for Together Omaha, a nonprofit that focuses on hunger and homelessness. He said the number of calls to their crisis engagement program has gone from 1,500 per year to about 7,000-8,000 per year.
“[That’s] people who are under the gun, at high risk of becoming homeless. Once you get evicted, it’s on your record, and if you fall into the homelessness system, it’s so darn hard to get out,” Hoy said.
Meanwhile, a report from the University of Nebraska-Lincoln’s Bureau of Business Research suggests that Nebraska’s economic activity will stagnate in the first half of 2023. The report points to two main factors – the number of initial unemployment claims, which increased by 0.41% in November 2022, and a 0.51% decrease in manufacturing hours worked.
The unemployment numbers signal a softening in Nebraska’s labor market, while the cyclical nature of the manufacturing industry spills over into other parts of the economy. The report points to both as key characteristics of a recession, although it’s still unclear whether there will be one.
ARPA funds will continue to support social services for the time being, although the funding has to be spent by the end of 2026. Sullivan said while the food bank hasn’t received their first payment of ARPA funds yet, they expect it before March, with more to follow.
Jeanetta and Sullivan both said the emergency funds will be difficult to replace.
“[It’s] an enormous influx of dollars at an unprecedented level coming in for areas like food insecurity and housing that had never existed before,” Jeanetta said. “It will not be sustained, and all these systems will have to figure out how to right-size and go back to pre-ARPA. What we’ve seen … is that things don’t get really bad until after the disaster, and that’s what’s happening with COVID.”
Mike Hornacek, the president and CEO of Together, said the financing of nonprofits was at a breaking point before the pandemic.
“We were already approaching this precipice of philanthropists being tapped out. There’s no more money … we can no longer afford to rely on charity to address the issues we face,” Hornacek said. “The philanthropists have told us point-blank that we have to come up with more sustainable solutions. They’ve got millions of dollars, but it doesn’t grow on trees.”
AUTHOR’S NOTE: The print edition of this story referred to the Food Bank’s projected demand for FY 2023 as being an 80% increase over “the height of the pandemic.” The increase is closer to 75% and is compared with the numbers from FY 2020. Sullivan says because the term “height of the pandemic” is considered subjective, the Food Bank prefers to compare the years instead.
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