Why Nonprofits Should Care and What to Do

by Eric Cochling | May 2, 2022

Why Nonprofits Should Care and What to Do

Key Takeaways:

Welfare cliffs and marriage penalties are discouraging people from work and forming families.
The cliffs and penalties may mean that our clients are locked into poverty for much longer than they would be otherwise and despite our best efforts.
GCO has created a platform that allows anyone to see when a particular family can expect to experience benefit cliffs as they earn more money through work.

If you work in a nonprofit serving the poor, you need to know that the government benefits your clients receive are likely discouraging them from working or forming a family, two things that research shows could lift them out of poverty the fastest.

This is an especially tough problem for nonprofits, like GCO, that work to get their clients into good-paying jobs and strengthen their family relationships.

What’s going on?

These disincentives to work are often called “welfare cliffs” and the disincentives to family formation are called “marriage penalties.” Essentially, “cliffs” are generated any time a person receiving government benefits gets a raise at work that causes them to lose more in benefits than they will earn in additional income from the raise. These same individuals can face a similar financial penalty IF they decide to marry. In many cases, they will lose more in benefits than their spouse is able to provide in new income to the household.

While you would think (hope?) cliffs and penalties are rare, they are not. Instead, they are baked into the structure of nearly all welfare programs and many of the cliffs are severe. It’s also important to know that welfare recipients don’t face a single cliff or a single penalty, but they face cliffs and penalties at a number of different points as they have additional income from working or through marriage.

Why does it matter?

For nonprofit leaders, the cliffs and penalties may mean that our clients are locked into poverty for much longer than they would be otherwise and despite our best efforts. For workforce development nonprofits, cliffs could be the underlying reason why your clients don’t pick up additional work hours when they are offered or seem less than excited when they are offered a good promotion. In extreme cases, clients may quit jobs that seemed like a perfect fit simply because they panic when they learn they may lose a major benefit – like housing or childcare.

For nonprofits trying to help strengthen family relationships, marriage penalties may be driving behavior that is otherwise inexplicable, like seemingly happy couples refusing to marry or live in the same home. These dynamics can lead to stress for the couples affected and to a sense that a parent (usually the father) has abandoned the family when, if the system would allow it, he would be in the home. In these cases, children pay the biggest price.

What can you do about it?

Fortunately, we have created a platform that allows anyone to see when a particular family can expect to experience benefit cliffs as they earn more money through work. For nonprofits working with these families, you now have a tool (available for 10 states, with two more on the way) that will allow you to help your clients plan for the future. In some cases, knowing when cliffs are likely to happen will allow your clients to seek a larger raise that will help them bypass or leapfrog a cliff. In other cases, maybe the answer is seeking additional training or certifications that will get your client into a different payscale entirely – one that avoids the cliffs.

In the coming weeks, we will be adding a tool that will allow users to see the impact of penalties on couples who decide to marry. We will also be incorporating a solutions tool that will allow anyone to see how reforming our government benefit programs can actually eliminate cliffs and penalties entirely, giving recipients every reason to pursue work and form stable households.

For GCO, it is this last point – reforming the system – that remains the ultimate goal. In the meantime, we are looking for ways to mitigate the harm caused by the welfare system, so that as many people as possible can escape the system and break cycles of poverty now.

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Money Can’t Replace Meaning and Purpose

by Eric Cochling | Dec 15, 2021

Money Can’t Replace Meaning and Purpose

Work has intrinsic value

Last month, I had the honor of participating in the Heritage Foundation’s annual Antipoverty Forum, where scholars and practitioners discussed the state of poverty in the country and the local efforts to confront the issue.

The discussion this year centered on the Biden Administration’s Build Back Better (BBB) bill that is now making its way through Congress and the ways in which the bill would undermine work by using much of its $2.4 trillion to expand safety net benefits and create new entitlements, all while eliminating work requirements.

Despite unemployment numbers dropping nearly to pre-pandemic lows in most states, what is not widely understood is that labor force participation (the number of people who are able to work and are actively looking for work) is much lower than when the pandemic began. Some 4-5 million people have effectively dropped out of the workforce – at least for now – despite record job openings (10.4 million in September).

While the drop in workforce numbers is partially explained by fear of COVID and mothers forced to stay home with children, much of it can only be explained as being caused by increased benefits (and the elimination of many requirements for qualifying), rescue-related payments and, now, monthly child tax credit payments. The BBB bill is very likely to make these trends and others, like inflation, worse.

Although we’re concerned that people are choosing not to work and agree that more money coming from Washington, DC, will make matters worse, my remarks reflected our concern at GCO about why worklessness harms the individual. Work is not merely about earning money; it has intrinsic value.

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Championing a return to normalcy and healthy social interaction

Work provides each of us with an outlet for our God-given talents and creativity. It allows us to serve others and contribute to other individuals’ well-being in exchange for having our own needs met. More than that, it provides us with social capital and a network of colleagues and friends who can help us when we need it. Much research has also shown that worklessness leads to poor mental and physical health and can contribute to increased drug and alcohol abuse – the 100,000+ overdose deaths during the pandemic representing the latest example.

As our government wrestles with how to deal with the pandemic and sets its priorities, it should avoid anything that discourages employment and causes more isolation. For individual and societal health on every front, the government should be championing a return to normalcy and healthy social interaction – including at work – that allows the American people to be resilient during times of crisis.

Help From Where You Least Expect It

by Eric Cochling | Jul 8, 2021

Help From Where You Least Expect It

“I don’t know what I’m going to do if I don’t find a better job; I might have to go back [to prison].”

Two months out of prison, Ray (name changed for anonymity) was explaining to me that he had reached the end of his rope. He had been struggling to find work that paid enough so that he could simply afford the basics. His part-time, minimum-wage job, just wasn’t cutting it. But, at least it was something.

Ray had the added complication of having to take custody of his son shortly after being released, meaning another mouth to feed when he could barely feed himself.

During his most desperate days after leaving prison, Ray said he was blessed to have the help of local church ministries who provided temporary housing for him and his son at a local extended stay hotel. He called GCO because that assistance was running out. He needed more help so he could remain at the extended stay but, more than that, Ray knew he had to solve the job problem to have any hope of getting off the hamster wheel he was on.

“I’m “clean” and have no intention of going back to that life.”

With a record that included drug and property crimes, Ray worried he might not have a shot at a better job. “But I’m willing to do any job that pays enough,” he assured me.

With those details in hand, our team started looking for the resources Ray needed and found some great opportunities for him and his son. There was a local church ministry offering help with additional days in the extended stay motel, there was the local restaurant eager to interview Ray for a better-paying job.

In the end, help came from a place Ray least expected it: the extended stay motel owner himself.

After hearing Ray’s story and observing him on the motel property, he offered Ray a job as a maintenance technician, a position that also included room and board on the motel property – an answer to Ray’s prayer for better pay and housing stability for him and his son.

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Like Ray, you might be surprised the motel owner stepped in to help the way he did, but you shouldn’t be. Many times, our local business owners bridge the gap for those in need in big and small ways – from helping support the nonprofits that serve emergency needs to, like the motel owner did for Ray, helping directly.

Too often, it’s business owners who get the negative press and little credit for the good they do. In reality, as Ray’s story reminds us, they are a huge part of the solution to poverty – both in the jobs they provide through their risk-taking and in their philanthropy made possible through the profits they generate.

Is this the end of Ray’s story? I don’t think so. Ray seems to have a drive that’s going to keep him reaching for better opportunities and, of course, if we can help him, we’ll be here to do that.

The point is that Ray’s story isn’t unique. For those reaching out and seeking help – for housing, for work, for food – there are often caring community members willing to help.

And sometimes that help comes from the place you least expect it.

If you or someone you know is struggling to find employment in Gwinnett or is looking for help to meet their basic needs, please visit www.betterworkgwinnett.org to find resources or to be connected to one of our “guaranteed-interview” employment partners.

A Community Responds to Need (or Good News You’ll Never See in Mainstream Media)

by Eric Cochling | Jul 7, 2020

A Community Responds to Need (or Good News You’ll Never See in Mainstream Media)

By Eric Cochling

Just seven months in and it’s fair to say that 2020 has been one of the most disastrous years in modern American history. The very fabric of our country seems to be unravelling before our eyes. As a year that can’t avoid being remembered in infamy, 2020 will forever be known for its pandemic, mass unemployment, police shootings, riots, and autonomous zones. For many of us born after the tumultuous 1960s, this is the first time we’ve seen our country in so much real, existential trouble.

Despite all the terrible things that have happened, and despite a media establishment that seems all in on an “if it bleeds, it leads” approach, you don’t have to look too far to find reasons to be hopeful. Granted, you do have to look in different places to find the good news—you’re unlikely to see it in news broadcasts or social media where anger and outrage are the fuel.

Instead, you have to read a local paper or sign up for newsletters and blogs (like this one) from ministries and nonprofits that you know. If you do, what you will find is that many Americans—and you’re likely one—are quietly at work responding to community needs and finding ways to bring people together.

In fact, many more of us are responding in this way than participating in riots or joining Twitter mobs. But because it’s the good, right, and (dare I say) expected response, it’s relegated to the “human interest” section of the paper, the end of the news broadcast, and the unpromoted backwaters of social media where virtually no one goes. At GCO, we are privileged to be working with community partners in just one of those efforts to respond to need.

Leading up to the COVID-19 pandemic, church, nonprofit, and community leaders in my hometown of Lawrenceville were already discussing ways we could partner to become better neighbors to those in poorer sections of the city. Unaware of what was coming, we prayed for guidance and started making initial plans for how best to work together. When COVID-19 struck and our state began shutting down, our group coalesced around a plan to serve those families living in extended stay hotels or rental properties in Lawrenceville who were on the verge of eviction. These were the families on the financial bubble pre-COVID and would be the first to be harmed as businesses shuttered. With funding from private philanthropy and the City of Lawrenceville, the Lawrenceville Response Center (LRC) was born.

Through the partner organizations working through the LRC (organized and led by Impact46), our groups have provided case management (Village of Hope and St. Vincent de Paul), housing stability (the Lawrenceville Housing Authority), food security (the Lawrenceville Cooperative Ministry), mentoring and coaching (Lawrenceville Employee Assistance Program at First UMC Lawrenceville), and job search assistance (GCO’s Hiring Well, Doing Good program). To date, the LRC has helped more than 200 families avoid eviction, have sufficient nutrition, and get on the path back to a stable income.

It’s the biggest good news story in my community, but almost no one knows about it. It’s a story of people (with diversity of race, gender, income, political views, and faith) coming together to help alleviate and prevent suffering. As we enter into our third month of working together, we celebrate the successes we’ve seen:

The mom and daughter who now have a place of their own after spending many nights living in their car.
The couple who were unemployed and living under a bridge who are now in decent housing and working.
The mom and her two children who have been able to remain in an extended stay hotel while mom successfully found a new job.

There are other stories like this and there will be more. And our experience in Lawrenceville is certainly being replicated in other cities and states around the country. Even though you’ll almost never hear it from a 24-hour news channel or see it in your Twitter feed, this is how the vast majority of Americans respond in a crisis: They roll up their sleeves and help.

HWDG brings together community resources and technology to help un- and under-employed individuals achieve economic independence in three ways:

Offering support: Individuals can easily search for local service providers who can help them overcome barriers to employment.
Helping people find their strengths: Job seekers can identify their strengths and opportunities for employment through a soft skills assessment, a library of training programs, and a career pathway generator.
Linking people directly with job opportunities: Job seekers can then connect with jobs relevant to their skill sets and personal preferences and geographic area.

Visit www.hiiringwelldoinggood.com

Ready to work, right out of high school

by Eric Cochling | Apr 29, 2019

Georgia’s public-school teachers should be proud of the work they’ve done to raise graduation rates in our state. Since 2011, graduation rates have increased by more than 14 percent, with 81.6 percent of the class of 2018 graduating. It’s an improvement that has moved Georgia, mercifully, out of the bottom tier of states. This is no small achievement and marks a dramatic improvement in the opportunities and prospects for the students who would not have graduated otherwise.

But graduating high school is not enough to ensure that our students succeed as they launch into the critical first years of their adult life. While college attendance is an important next step for many Georgia students, it’s not the route that most take.

According to a recent study from the University of Pennsylvania, only 31 percent of 18-24-year-olds in Georgia are in college. Of those who do attend college, completion isn’t guaranteed. According to research from the Georgia Governor’s Office for Student Achievement, only 27 percent of the class of 2012 (the most recent year available) had a bachelor’s degree, associate’s degree, or certificate five years after graduating from high school.

And then there’s the large number of young adults in the state who are still trying to find their way years after high school. According to the Annie E. Casey Foundation, in 2017 Georgia had 123,000 young adults aged 20-24 who were neither in school nor working. That’s nearly one in five people in that age group.

So, if nearly 70 percent of students are not going to college and a very high percentage are still floundering into their early 20s, what’s the solution for helping them find a path to a rewarding, self-supporting career?

An important answer, according to Dr. Robert Lerman of the Urban Institute, is apprenticeships—where students start working while high school juniors and seniors in fields that lead to credentials and, importantly, careers immediately after graduation. Dr. Lerman’s work researching apprenticeships spans decades and covers most of the globe. His research has shown that apprenticing is one of (if not the most) effective way to ensure that students who are not college bound find their way into a well-paying, sustainable career.

In the last two years, GCO has worked with Dr. Lerman to research the role of apprenticeships in Georgia and to provide recommendations on how to expand an already well-structured program into one that meets student demand.

Dr. Lerman’s most recent report, released just this week, focuses on Georgia’s Youth Apprenticeship program, created in the mid 1990s with fewer than 400 student participants. Today, the program has grown to more than 3,000 students in nearly 350 schools across the state. State funding of the program is relatively modest at $3 million annually and mostly funds program coordinators who oversee student participation and work to attract businesses to offer apprenticeship opportunities.

According to the report, demand for apprenticeships of this kind is high in Georgia. Dr. Lerman has estimated elsewhere that Georgia needs nearly 100,000 apprenticeships in order to meet that demand. Why hasn’t apprenticeship availability kept pace with student demand, according to Dr. Lerman? Based on interviews and surveys of program coordinators, the primary answer is that companies are skittish to offer jobs to high school students. This is due to the fear of liability for such young workers and related costs.

But, according to Dr. Lerman, these fears are largely unfounded and based on inaccurate assumptions about what the law requires and the cost of hiring younger workers. He cites Southwire as a prime example of a company that has successfully embraced apprenticeships since the 1990s and now employs more than 300 students. And Southwire has intentionally sought out students who are known to be at risk of falling into poverty and suffering from related issues, complexities not faced by the majority of students who would seek apprenticeship opportunities.

For the companies that are currently providing apprenticeships, Dr. Lerman points to regular reports of high levels of satisfaction (more than 90 percent) as a reason to be optimistic that, with accurate information and an opportunity to participate, more companies can be convinced to join the effort.

And, at GCO, we believe now is the perfect time to expand apprenticeships in Georgia. As the chart below demonstrates, the job market is tight in a way that hasn’t been seen for nearly two decades, with more job openings than job seekers. Surely now is the time to scale up apprenticeships to create a pathway from high school to work for those hundreds of thousands of students and young adults in our state who are not college-bound but are full of potential and have great things to offer to any company willing to take a chance on them. We owe it to them to make it happen.