CARES Act Loans Insufficient to Cover Local Human Services Needs
A recent survey of 42 local human services organizations shows that many will need additional financial support beyond federal CARES Act loans to continue the services they provide at the level before COVID-19. Despite the fact that almost 90% of respondents have been approved for or received CARES Act loans such as Personal Paycheck Protection (PPP) loans, over three-quarters of respondents reported that they do not have sufficient funds to cover the increased costs needed to continue their services and meet increased demand. This deficiency will have a detrimental impact on the increased number of residents who need assistance due to the personal and economic challenges caused by the pandemic.
In the survey conducted in June, 90% of organizations reported that social distancing measures have changed the way they provide goods and services. Changes include shifting from in-person to online or phone appointments, utilizing hotels for homeless shelter residents, and providing curb service for community members to access food and hygiene products.
Organizations reported that in order to continue providing services, they will need to make purchases of PPE, computers and other technology, and in some cases renovate their interiors to allow for social distancing. Additionally, two-thirds of the organizations reported an increase in demand for their goods and services and expect this demand to increase over the next few months. Items and services in demand include food, transportation assistance, mental health services, workforce supports, emergency rental assistance and childcare.
For many organizations, the increased costs to continue providing services and meet additional demand are not covered by federal CARES Act loans due to restrictions on the types of expenses the funding can be used for. With fees for services and fundraising taking a significant hit this year due to the pandemic, many organizations do not have the funding they need to cover these expenses.
HSC will be working with our local government leaders to identify financial assistance that will allow our human services organizations to continue offering critical support for the community.