Nonprofit Newswire | Stimulus Plan in Hindsight: Did Obama’s Agenda Hobble Economic Recovery?

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September 1, 2010; Source: Politics Daily | In the wake of President Obama’s and Vice President Biden’s “recovery summer,” economists and pundits of all ideological stripes have weighed in on the success or failure of the stimulus. This piece from Politics Daily notes that the President included many of his ideas for a “new economic foundation” in the stimulus package, including education reform, expanded broadband coverage, and investment in clean energy. The author asks, “Was it a mistake to shoehorn Obama’s longer-range economic plans into a package intended to jump-start the economy? If that money had been applied to more traditional stimulus, with shorter-term impact, would more people have jobs?” Hindsight in this case isn’t quite 20-20, several economists suggesting that a differently constructed stimulus package wouldn’t have resulted in significantly different economic (read: jobs) results, though their retrospective suggestions don’t match up. Reflecting nonprofit issues in the stimulus, someone from the Center for American Progress, the nonprofit think tank probably possessing the most influence with the Obama Administration, wished that the administration had “pour[ed] money” into “caregiver jobs” such as AmeriCorps and Teach for AmeriCorps. For the bulk of AmeriCorps positions, those aren’t jobs in the sense of paying livable wages. Annual incomes of $13,000 for full-time AmeriCorps positions (many are really only part-time) are stipended volunteer slots, not jobs. It is interesting how the nation’s most liberal think tank has become one of the nation’s most vocal proponents of quasi-volunteerism as the labor response to nonprofit service delivery.

The author notes that parts of the stimulus package—such as weatherization—might have been slow from the gate, but the money is now moving at a rapid clip. But “what will happen,” she asks, “in the next few months when the stream of federal stimulus slows to a trickle and then stops?” That’s the $64,000 question, or perhaps the $787 billion question, as it affects the nonprofit sector. Many nonprofit community action agencies, community health centers, and housing counseling groups hired staff with the influx of stimulus dollars, ultimately bolstering a nonprofit sector that might have been dealt a debilitating body blow had it not been able to add staff to respond to the increasing demand for services due to the Great Recession, something that wouldn’t have happened without stimulus funds given the funding retreat by endowed foundations and the cutbacks in individual and corporate charitable giving in 2008 and 2009. Now, with stimulus money petering out, they have to find new money or lay off their stimulus staff. We hope the stimulus has done enough to jumpstart the economy, but will that sufficient to keep the engine running for many nonprofits on the brink of layoffs?—Rick Cohen