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For Nonprofits, It’s a Time of Challenge, High Anxiety

By
Nicole Blais, CEO of Holyoke Chicopee Springfield Head Start
Cover Story

Mission: Imperiled

Nicole Blais, CEO of Holyoke Chicopee Springfield Head Start

Nicole Blais, CEO of Holyoke Chicopee Springfield Head Start

 

Nicole Blais was troubled when she clicked the link.

Forwarded to her by her the executive director of the Massachusetts Head Start Assoc., it led to an April 14 U.S. News & World Report article stating that the Trump administration was considering an FY 2026 budget that would zero out funding for Head Start.

Overall, the piece confirmed what Blais, CEO of Holyoke Chicopee Springfield (HCS) Head Start, already knew about the federal budget and this $12 billion line item — that a presidential budget is essentially a wish list, only Congress can allocate federal funding, and Head Start enjoys support on both sides of the aisle.

But she wasn’t in any mood to be complacent.

Indeed, within days, she had penned an op-ed for area media outlets, stating, “HCS Head Start is more than just a program; it is a lifeline that connects families to vital resources. The looming threats of federal funding cuts — especially to programs that safeguard the health and well-being of our children and families — is an issue affecting more than just those we serve.”

On May 2, said Blais, the president unveiled what’s known as a ‘skinny budget,’ which did not list Head Start as a program to be eliminated. But, as with that April 14 article, this latest report, while reassuring, is by no means final.

“That budget is just a proposal that’s sent to Congress. That was a good sign, but we’re still waiting to see the budget that Congress puts together before we exhale.”

“That budget is just a proposal that’s sent to Congress,” she said. “That was a good sign, but we’re still waiting to see the budget that Congress puts together before we exhale.”

There are many nonprofit managers and board members holding their collecting breath these days, including Andrew Morehouse, executive director of the Food Bank of Western Massachusetts, who said proposed cuts to SNAP (Supplemental Nutrition Assistance Program) funding and Medicaid would dramatically increase demand for the agency’s services at a time when demand is already soaring due to inflation and a softening jobs market.

“For the fiscal year October of 2023 to September 2024, we saw a 30% increase, and since then, we’ve seen a 10% increase,” he said, adding that this number will likely increase due to tariffs and other forms of pressure on consumers.

Meanwhile, several grants for area programs and initiatives have already been terminated, including:

• A $20 million grant from the Environmental Protection Agency to Springfield that was slated for home energy retrofits, air pollution monitoring, and de-leading of homes, an initiative involving several area nonprofits;

• A $1 million EPA grant to address asthma in Western Mass. through in-home environmental remediations, such as mold removal and improved ventilation, in Chicopee, Holyoke, and Springfield;

• A $50,000 National Endowment for the Arts (NEA) grant to MASSMoCA in support of Jeffrey Gibson’s “Power Full Because We’re Different” exhibition;

• A $400,000 funding package from the U.S. Department of Agriculture to the Food Bank for the fiscal year ending in August; and

• A $20,000 grant from the NEA to Amherst Cinema for its Bellwether series, which promotes “creative, thoughtful, and inventive approaches to non-fiction cinema,” according to a statement from the theater.

That list, and it is certainly just a partial list, shows that the cuts have come across the broad spectrum of nonprofits, agencies in categories ranging from the arts to public health to food security.

Common denominators, aside from language from the Trump administration stating that the programs in question fall outside the administration’s priorities, are actions to appeal the cuts while also looking for other ways to fund them — when possible.

Andrew Morehouse says looming cuts to SNAP benefits and Medicaid could greatly increase demand for services provided by the Food Bank of Western Massachusetts.

Andrew Morehouse says looming cuts to SNAP benefits and Medicaid could greatly increase demand for services provided by the Food Bank of Western Massachusetts.

That’s not possible with a $20 million grant or even a $1 million grant, but it is with the NEA’s grant to the Amherst Cinema, for example, and also with the cut to the Food Bank’s budget, and both agencies are appealing to the public.

Meanwhile, at least one nonprofit, the YWCA of Western Massachusetts, is considering the launch of a capital campaign to sustain programs that are funded by federal grants that are mostly no longer available (more on this later). And many nonprofits are reaching out to area foundations, not only with appeals for funding, but for support with efforts to find ways to collaborate with other agencies to meet needs within the community and keep their agencies active and financially stable.

“People are reaching out, and not just with appeals for direct funding; we’ve been in conversations with our current grantees and others in the nonprofit ecosystem, and we’ve been having conversations about how else we can be of service in these challenging times,” said Denise Hurst, vice president of Community Impact and Partnerships with the Community Foundation of Western Massachusetts. “They’re asking about opportunities to partner with one another, share ideas, and collaborate in real time to navigate these difficult times.

“There’s still domestic violence going on, there’s still child abuse going on, there’s still sex trafficking going on, there’s still human trafficking going on, and there’s still stalking going on. And that means that the nonprofits in that arena that do that work are being stripped of the funding, and the survivors aren’t able to get the services they need.”

“We’re just four months into this new administration, and we’re really thinking about stabilization and sustainability of the nonprofit ecosystem,” she went on, adding that the region’s nonprofits not only meet critical needs, but they are an important pillar in the Western Mass. economy, providing not only jobs but critical services that benefit employers and their workforces.

For this issue, BusinessWest examines this time of challenge and high anxiety for nonprofits, what’s at stake, and how these agencies are responding.

 

Waiting to Exhale

As she talked about the plight of her agency, Liz Dineen, CEO of the YWCA of Western Massachusetts, shared information concerning grants from the Department of Justice for programs to assist those the agency serves.

They fall into various categories, such as transitional housing assistance grants for victims of domestic violence, dating violence, sexual assault, and stalking; grants to improve the criminal justice response program; the Sexual Assault Forensic Exam hiring and training program; and others, she said, adding that she and her staff continuously peruse the DOJ website, and, specifically, the Office of Violence Against Women, for notices of funding opportunities and apply to whatever is available.

Colleen Shanley-Loveless

Colleen Shanley-Loveless

“Private funding is not going to have the impact of some of these larger grants, and the state can’t make up for all of it.”

But starting in January and the start of the Trump administration, there has been very little available. Indeed, the DOJ recently terminated more than 360 victims’ services grants, which stripped hundreds of millions of dollars away from programs that promote public safety and provide victims and survivors with access to safety, security, and justice.

“Traditionally, at the beginning of February, there’s a bunch of new grants that are posted; they posted several new grants at the beginning of February, and then they pulled every one of them,” she explained. “There were no federal grants at all available for us to pursue.”

Recently, there were a few grants posted, one for Indian tribes and the other for rural areas, which meant this particular YWCA is ineligible for both, she went on, adding that the one program the agency could apply for had just 19 grants for the entire country.

“In the past, we might have had an opportunity to look at 30 to 35 grants; now we’re looking at one,” she said, adding that she’s found it difficult to even talk with anyone at the DOJ to get some direction on what’s happening — or not happening. “There’s a real dearth of opportunities out there right now.”

This reality prompted Dineen to consider a capital campaign so that the agency may continue to provide its services. A feasibility study is now underway, she noted, adding that the question isn’t whether there will be a campaign, but what the monetary goal should be.

“We’re trying to gauge what funders and foundations will be able to give us,” she said, acknowledging that, in most campaigns of this nature, funding is sought for capital projects such as a new building, but in this case, it’s to continue programming for which the agency can no longer secure grant funding.

“There’s still domestic violence going on, there’s still child abuse going on, there’s still sex trafficking going on, there’s still human trafficking going on, and there’s still stalking going on,” she said. “And that means that the nonprofits in that arena that do that work are being stripped of the funding, and the survivors aren’t able to get the services they need.”

What Dineen is experiencing — and her response, in terms of both action to keep programs running and strong words about what will happen if they are curtailed or eliminated — is being repeated across the region, at dozens of nonprofits.

Including Revitalize Community Development Corp. (CDC), where President and CEO Colleen Shanley-Loveless is responding to the termination of that $1 million grant to combat asthma as well as a $1.5 million stake in the EPA grant to Springfield that was terminated.

The former went to the state Department of Public Health, she said, adding that roughly $900,000 was left to be spent on the Healthy Homes program and initiatives that have been successful in bringing the rates of asthma down in this region.

“Indoor air quality in housing is impacted by gas stoves, older housing stock with leaky roofs, poor ventilation, etc.,” she said. “We piloted healthy homes work with Revitalize CDC and the city of Springfield. The work to address housing needs is critical to keep people healthy; these are proven interventions to help folks control asthma.”

Elaborating, she said funds have been terminated, or are in limbo, for several air-quality-related initiatives, including an EPA grant to the Hitchcock Center in Amherst and Springfield’s $20 million EPA Community Challenge grant, and the impact from these cuts could be devastating, with area health officials projecting increases in asthma hospitalizations and the cost of that care, as well as higher morbidity and mortality rates.

Jessica Collins

Jessica Collins

“We were being set up for a decade’s work to engage, educate, and inform people of how climate impacts health, but also to work with partners like the city of Springfield to literally change policy and infrastructure. And now, all of that will be paused.”

Shanley-Loveless said her agency has diverse funding streams and some public support, but nothing that can make up for the loss of millions of dollars in federal grants.

“Private funding is not going to have the impact of some of these larger grants, and the state can’t make up for all of it,” she explained. “And that’s the challenging part; $1.5 million is a large amount — if we apply to a foundation for $50,000, that’s a good amount, but it doesn’t come close to the amount and the impact of those federal grants.”

 

Clearing the Air — or Not

Jessica Collins, executive director of the Public Health Institute of Western Massachusetts, agreed, adding that, while nonprofits of all kinds are under duress, the Trump administration seems to be “piling on” when it comes to those involved with public health.

She has some theories about why, including lingering resentment over how the COVID crisis was handled. But the ‘why’ isn’t as important as the ‘what,’ she noted.

“The attack on climate change is really devastating,” said Collins, adding that her agency was to be a major subcontractor to Springfield to help the city carry out strategies related to that $20 million EPA grant, just one initiative in the broad realm of climate change her agency was slated to be involved in.

“We were being set up for a decade’s work to engage, educate, and inform people of how climate impacts health, but also to work with partners like the city of Springfield to literally change policy and infrastructure,” she said. “And now, all of that will be paused.”

There will be appeals to lawmakers to restore the funds and, in many cases, lawsuits to accomplish that same end, said Collins and others we spoke with, but nonprofits are bracing for the possibility, if not the probability, that they will have to move on without that funding.

And that has implications for individual nonprofits as they look to maintain staff and carry out missions, as well as their various partners in various initiatives.

“Last year, our budget was $4 million, but more than $1 million went out to 35 different organizations in subcontracts,” she explained. “So when we take a hit, everyone else kind of takes a hit as well because we’re seen as a convener and a lot of the funding we get is collaborative.”

And while shoes have already dropped for many nonprofits, others are bracing for the possibility that they might be impacted as well, while hoping they’re not — while at the same time acknowledging that hope is not a strategy.

That’s certainly the case at the Food Bank of Western Massachusetts, where the threat of cuts to SNAP benefits and Medicaid loom large over the agency and all those food pantries and survival centers that it supports.

“To the extent that those programs are cut, more people will turn to their local food pantry, meal site, and, ultimately, the Food Bank for more food,” said Morehouse, adding that a 20% cut in SNAP benefits has been proposed, which, if it becomes reality, would result in the loss of 19 million meals in Western Mass.

“That’s more than the Food Bank provides in a whole year, our entire inventory,” he went on, adding that there are nearly 200,000 people in the four counties of Western Mass. that receive SNAP benefits totaling $35 million a month. “That’s a lot of food, and it would, at the very least, result in a tremendous increase in demand for food assistance to make up for that loss. This would be a devastating blow.”

The same sentiment prevails at HCS Head Start, where Blais is optimistic that Head Start will remain in the federal budget, but not complacent given what’s at stake.

“At a time when the early-education world is rebounding from COVID and we’ve been so focused on providing access, this would be a ginormous step in the wrong direction,” she said, adding that Head Starts are “making noise” locally and nationally about how cuts to the agency would impact young people, families, and businesses still struggling to maintain workforces. “It’s like that ripple on a pond. Head Start reaches so many people; it’s not just families and children in the classroom.”

In the wake of cuts (and possible cuts), area nonprofit leaders are responding in many different ways — from hard looks at other sources of funding to educating the public and elected leaders alike on what’s at stake with these cuts, to looking at ways to collaborate to provide needed services.

Hurst told BusinessWest that the Community Foundation has received calls from nonprofits across a broad spectrum — including public health, the arts, environmental justice, and higher education — about cuts, what they mean, and how their broad impact can be mitigated.

“We’re doing a lot of deep listening, learning, and connecting them with resources,” she said. “We’re connecting them with other organizations so they can think about resource sharing and partnering with other organizations that are also trying to figure out next steps and strategy around culturing some of these funding losses as well as stabilizing internal operations.

“We’re there to listen, and thinking about ways to use that information that we’re gathering to influence and inform how we move forward,” Hurst went on, adding that the discussions are far more about strategies for meeting needs than plugging gaps in funding — because the gaps are too large to plug.

“We’re having discussions and conversations with donors about the importance of giving locally and regionally,” she said, “and how to be more strategic and intentional with their giving, both in the current and the long term.”

Using History as Our Guide

By Contributor
Wealth Management

It Shows That Our Pain May Be Followed by Some Gains

By Jeff Liguori

 

According to Google searches, the popularity of the term ‘inflation’ hit its highest peak in at least five years during the second week of August of last year.

Jeff Liguori

Jeff Liguori

For the sake of comparison, the term ‘stock market’ is one of the more popular Google searches. On average, ‘stock market’ is three times more popular than ‘inflation.’ For further comparison, the search for ‘Lebron James’ is regularly much higher than ‘inflation,’ but still not quite as popular as ‘stock market’ on average. Yet, in August of last year, ‘inflation’ bested both terms, by a wide margin.

Higher consumer prices are causing anxiety. The Federal Reserve, with its dual mandate of full employment and low inflation, has been working to ease prices through higher interest rates, which led to weak performance in both stock and bond markets in 2022 — a rare phenomenon when both markets sell off in tandem.

When the Fed raises the federal funds rate, an interest rate that banks charge to one another for overnight lending, it has a ripple effect, putting upward pressure on all interest rates, from mortgages to treasury bills. In turn, all assets get ‘repriced’; stock prices adjust lower (usually) because higher rates often mean profit margins for those businesses shrink, which equates to a lower valuation for that company’s stock price. The repricing of assets has wide-ranging implications and is often disruptive to an economy.

Is the Fed acting appropriately? Wall Street, with no lack of varying opinions, either believes the Fed has overstepped by tightening too quickly and too late, or the Fed should be more aggressive in the next two sessions and then be done. Finding an economist or strategist that thinks Jerome Powell and his crew are precisely doing the right thing is nearly impossible.

Instead of opining on the Fed’s actions — I’m not an economist, more of an ‘investment historian’ — let’s put the discussion in the context of past cycles of rising inflation and what it might mean for investors.

From January 1966 to August 1969, the federal funds rate more than doubled from 4.5% to 10.25%, in what was then seen as aggressive action by the Fed to tame inflation. In August 1969, the Fed reversed course, cutting interest rates as the economy slowed and the country faced increasing job losses. To safeguard the economy, the Fed quickly went from raising to easing interest rates, moving the effective rate back to about 5% in March 1971, as unemployment started to tick up.

But the story doesn’t end there. Inflation was persistent even with a slowing economy because of a burgeoning energy crisis. Once again, the Fed moved to a tightening stance, this time increasing interest rates by more than 300% from the spring of 1971 to the summer of 1973. Interest rates skyrocketed, and stocks suffered badly, declining by more than 40% in the 14 months following the start of that new tightening cycle, before bottoming in October 1974.

Interestingly, interest rates remained historically elevated throughout the 1980s, but stocks managed to do quite well. From the low in October 1974, the S&P 500 had an impressive run until the tech meltdown in 2001, appreciating 460% into late 2000. The data is compelling.

Following the Fed pause in 1974, in 21 of the subsequent 28 years leading up to the tech bubble, stocks generated a positive annual return. The worst year was 1977, when the S&P was down 11.5%, and the best year was 1995, when the S&P 500 generated a positive 34% return. There were eight years in that three-decade stretch when stocks increased by more than 25%.

To put things in perspective: the federal funds rate increased from 2.25% to a peak of 14.3% from February 1971 to July 1974, a total increase of about 230%, a slow and steady move higher in that 40-month period. Beginning in March of last year, the Fed raised rates from a historic low of 0.08% to 4.75%. That may seem milder as the overall level of interest rates is still historically low, but consider the Fed took this action in 11 months, increasing rates by more than 5,000%.

Overall, 2022 was unprecedented, both in the dramatic measures by the Fed and the performance of financial markets. Bond and stock markets haven’t generated a negative return in the same calendar year in almost 60 years. And there has only been one other year since 1960 when bonds had a decline in value of more than 10%, in 2009; however, the stock market appreciated almost 26% that year as the country emerged from the 2008 Great Recession.

So, what if the Fed — irrespective of Wall Street opinions — is doing exactly what needs to be done? And what if the economy avoids a recession? And what if stock and bond prices have already adjusted for a recession that doesn’t materialize (or is mild)? If history is our guide, financial markets can produce healthy returns even in inflationary periods, after some initial pain.

The answer may be as simple as to ignore consensus. Be a contrarian. The pain to our portfolios over the past 18 months may be the first step to higher returns in the near future.

 

Jeff Liguori is the co-founder and chief Investment officer of Napatree Capital, an investment boutique with offices in Longmeadow as well as Providence and Westerly, R.I.; (401) 437-4730.

Emerging from the Pandemic Creates More Questions Than Answers

By Contributor
Health Care Special Coverage

An Anxious Transition

While the economic reopening is being called the ‘new normal,’ things aren’t back to normal, really — at least not by pre-pandemic standards. With COVID-19 still lingering, developments like the loosing of mask and gathering rules and a growing call for employees to return to the office have only ratcheted up the stress and anxiety among a broad swath of the population. In other words, for many, returning to the world as they knew it will be a gradual process.

By Mark Morris

In these unique times when COVID-19 is still active but in decline, we all have lots of questions about how to navigate daily life.

For example, if you have been vaccinated, should you continue to wear a mask? Why does the CDC say you can go without a mask, yet many public places still require one?
Should we still socially distance and sanitize in certain situations?

And, importantly, how much anxiety are such questions causing these days?

Answers can come from many places. Lauren Favorite, assistant program director with Behavioral Health Network, noted that, while information can be good, an overload of messages from different sources results in confusion.

“When we are bombarded with a plethora of information, it’s difficult for people to make a singular choice that will be the right one for them,” Favorite said. “Too much conflicting information can create anxiety.”

“Because so many people are not sure what to do, they will hold on to behaviors even when they no longer serve their intended purpose.”

BusinessWest spoke with several behavioral-health professionals who said much of the stress people are feeling right now is rooted in their concerns about how safe it is to go back into the world. Despite the May 29 reopening of Massachusetts, allowing everything from restaurants to sports arenas to fully welcome the public, Alane Burgess, clinic director for MHA’s BestLife program, said many people still do not feel safe going to the supermarket.

Alane Burgess

Alane Burgess says it’s always easier to learn how to be afraid than to unlearn that mindset.

“It’s always easier to learn how to be afraid than it is to be unafraid,” Burgess said. “Even when we’re told everything is OK, people still have questions.” As COVID-19 is a relatively new virus and scientists are still learning about it, continued concerns about personal safety are not surprising.

A recent research article looked at the trauma experienced by refugees after they emerged from a war-torn country. Favorite said their experience serves as a metaphor for these times.

“In the war zone, they had to develop certain habits and routines as a way to survive,” she said. “Once they escaped and reached a safe place, they held on to those behaviors because they didn’t know how else to act.”

All behaviors have a motivation, she continued, and the ones we followed to stay safe during the pandemic served us well. As we move beyond the pandemic, however, it’s time to examine if those behaviors are still serving us.

“Because so many people are not sure what to do, they will hold on to behaviors even when they no longer serve their intended purpose,” Favorite said. “I think many people will be in a sort of in-between place until we start to see a critical mass of vaccinations.”

 

Baby Steps

For many, entering back into the world needs to be a gradual process. Kathryn Mulcahy, clinic director for Outpatient Behavioral Health Services at the Center for Human Development, encourages her clients to start small.

“Instead of trying to do everything at once, I remind people it’s OK to take baby steps,” Mulcahy said. “You might not be ready to go out to the movies, but you can start getting back into the world by taking a walk in your neighborhood.”

As an incentive to go out again, Burgess advises her clients to make a bucket list of activities they are excited about doing again. “Making a list reminds people of what brought them joy before COVID and can help motivate them to get back to doing those things again.”

lauren favorite

Lauren Favorite

“I think many people will be in a sort of in-between place until we start to see a critical mass of vaccinations.”

COVID also had a significant impact on the nature of work. Depending on the occupation, some people reported to work every day during the pandemic, while others followed a more hybrid approach of working at home some days and at the office other days. A third group has been working from home since last March.

Employers have begun asking Joy Brock, director of the CONCERN Employee Assistance Program, how to proceed as we move toward the end of the COVID era.

“Companies are struggling with how to translate all the different mandates,” Brock said. “They are having as much anxiety as their employees.”

According to the Massachusetts Attorney General’s Fair Labor Division, employers are allowed to ask if an employee has been vaccinated. In some cases, they can require vaccination in order to report to work. Exceptions are allowed for those protected by legal rights, such as individuals who have disabilities or those with sincerely held religious beliefs.

Brock said even those distinctions beg more questions. “What if I’m vaccinated, but the person next to me isn’t? How is that going to work with masks, social distancing, and other considerations?”

When there is no clear-cut direction, individuals usually figure out how to keep themselves safe. Brock said even modest steps to take control over one’s health can help reduce anxiety. “If that means you are the only one in the office wearing a mask, that’s perfectly fine.”

Finding a comfort level at work and in the world ultimately depends on the individual. Burgess emphasized that everyone is on their own journey, and it’s OK to move at a different pace than others.

“I advise people to be patient with themselves and not make any self-judgments just because their comfort level is different than their friends or co-workers,” she said.

One clear demand Brock has heard from workers involves flexibility in work schedules.

“For the most part, people have enjoyed working from home because it makes child care easier to manage, they have been able to match or exceed their productivity, and many report lower stress levels,” she said.

With that in mind, many employers are looking at a hybrid model and trying to figure out the right mix between working at the office and from home.

Kathryn Mulcahy

Kathryn Mulcahy

“Instead of trying to do everything at once, I remind people it’s OK to take baby steps. You might not be ready to go out to the movies, but you can start getting back into the world by taking a walk in your neighborhood.”

A return to the office also means remembering how to be a colleague. Even if co-workers talk remotely every day, Mulcahy said people can get out of the habit of face-to-face conversations.

“As silly as it sounds, practicing an in-person conversation with someone outside your bubble is one more way to prevent that overwhelming feeling of being thrown back into the workplace,” she explained.

Beyond water-cooler discussions, Burgess said a successful transition back to the office also requires companies to be tuned in to the apprehensions their employees may have. “It will be important for people to have an open dialogue with their employers about any anxieties or concerns they may be feeling.”

Added Favorite, “as a supervisor in the workplace, I’m having conversations with my staff to assuage their fears about coming back on site.”

 

Talk About It

One key to putting COVID behind us is recognizing what everyone has gone through since last March.

“For the past 14 months, we’ve lived in a world full of trauma,” Burgess said. “The idea that we can suddenly go back to the way everything was is an impossible task.”

Mulcahy said she has heard from people who are embarrassed because they feel stressed and anxious about returning to a more normal life.

“They feel like they should be happy and excited that people are vaccinated, but instead they just feel worried,” she noted. “I want people to know they are not alone and they can reach out for help to navigate these feelings; that’s why we’re here.”

Burgess also pointed out that life was different during the pandemic, and we should accept that we are not the same people we were before.

“Our life has changed, and we have changed in some of the ways we think, how we feel, and what feels safe,” she said. “It’s important to respect who we are today because that, too, is part of the process in getting back into the world.”

When everyone was forced to suddenly deal with a pandemic, it created anxiety for many. Now, as the pandemic (hopefully) nears its end, that creates anxiety, too. Those who spoke with BusinessWest agree that talking about this stress, and letting people know their feelings are valid, will go a long way to easing everyone’s anxiety.

After all, Favorite said, “we’re still learning how to be in a world where we don’t have to worry all the time.”