June 11, 2019; Louisville Courier-Journal
For nonprofits in Louisville, potential cuts from a cash-strapped local government may coincide with cuts by the Metro United Way to create some significant funding gaps. Family & Children’s Place, a 135-year-old nonprofit which helps abused children, will lose $347,000 out of what was a $1 million allocation last year. Its whole budget is around $7 million, so one could look at this as a five-percent loss, but in the last fiscal year for which it filed its Form 990, it ran a deficit of nearly $1 million after running a half-million-dollar deficit in the previous year. The two years before that, it logged smaller deficits, but still in six figures.
“Our staff turned over every stone, knocked on every door, and worked every angle we could to generate the financial resources we did,” reads an email from the United Way to its grantees, but in all, grants to 100 agencies in that community were cut for a total of around $3 million even as the Louisville Metro Government considers a $2 million cut targeting some of the same groups because of a budget shortfall.
Theresa Reno-Weber, United Way’s CEO, says it’s not so much that they suffered a $3 million downturn in funding, but that workplace donations from individuals have declined by an appalling 32 percent at the same time that more of the annual campaign take is made up of corporate donations that are earmarked. So, while overall Metro United Way’s 2018 campaign raised about $26.3 million, as compared with compared with $27 million in 2017, the priorities for giving have been altered by the source of the larger gifts.
The big decrease was in what was once United Way’s “bread and butter”—standard payroll deductions people signed up for through an annual workplace campaign, Reno-Weber said. In past years, employers generally led the effort and encouraged people to give to the United Way as a local clearinghouse for donations.
Now, more of what the United Way raises comes in the form of large gifts for special purposes, like a $1 million donation from JPMorgan Chase for job skills and training in financial literacy. This may be keyed to the fact that the city of Louisville has placed its hopes for economic development on Microsoft, which will be entering the scene to establish a regional hub for artificial intelligence (AI) in healthcare.
Microsoft is promising to help bring training and new jobs in tech to city residents which sounds like it will be a challenge since most have already acknowledged that it will take many years for the local educational and training systems to catch up with the growing need for tech workers in jobs that already exist in the city. Eric Burnette, a senior policy adviser at Louisville Forward, says the city not only has way too few tech jobs for a city of its size, but it cannot fill even those that do exist in the area.
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“Louisville made a top 10 list we never wanted to be on where Brookings had us eighth out of the country for jobs that are high risk of automation,” Burnette said.
On top of that, some, like investor Mark Cuban, believe that those with a heavily tech- focused education may be less in demand as time passes.
“Creativity, collaboration, communication skills: Those things are super important and are going to be the difference between make or break,” Cuban said on the latest episode of Recode Decode with Kara Swisher, in a joint interview with Revolution CEO Steve Case. “In an AI world, you have to be knowledgeable about something, right?”
He went on to say that AI will get smarter if and only if it is fed with good data and not spitting out faulty conclusions, like the ones that are already causing problems in the real world. Lower-skilled workers will be labeling data, he predicted, while higher-skilled workers with “domain knowledge” will be the ones designing the desired outcomes of neural networks and sussing out where they might go wrong.
“Twenty years from now, if you are a coder, you might be out of a job,” Cuban said. “Because it’s just math and so, whatever we’re defining the AI to do, someone’s got to know the topic. If you’re doing an AI to emulate Shakespeare, somebody better know Shakespeare…the coding major who graduates this year probably has better short-term opportunity than the liberal arts major that’s a Shakespeare expert, but long term, it’s like people who learned COBOL or Fortran and thought that was the future and they were going to be covered forever.”
Returning to the subject of a weakening social infrastructure making a hard situation harder, the United Way plans to redouble its efforts to pursue foundation and corporate grants, which may well bring them into conflict with their own member agencies at these source points.
The inherent flaws in the idea of placing so many economic eggs in large corporate baskets is something NPQ has written about a number of times, particularly in reference to Amazon. Placing them atop a starving social infrastructure? Maybe the city should rethink its proposed cuts.—Ruth McCambridge