Thursday, December 15, 2011

'Dismal' prospects: 1 in 2 Americans are now poor or low income

Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.

The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.

"Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too 'rich' to qualify," said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.

"The reality is that prospects for the poor and the near poor are dismal," he said. "If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years."

•Study: 1 in 5 American children lives in poverty
Congressional Republicans and Democrats are sparring over legislation that would renew a Social Security payroll tax cut, part of a year-end political showdown over economic priorities that could also trim unemployment benefits, freeze federal pay and reduce entitlement spending.

Robert Rector, a senior research fellow at the conservative Heritage Foundation, questioned whether some people classified as poor or low-income actually suffer material hardship. He said that while safety-net programs have helped many Americans, they have gone too far, citing poor people who live in decent-size homes, drive cars and own wide-screen TVs.

With nearly 14 million Americans unemployed, a new child welfare study finds one in five children are living in poverty. Nearly one in three live in homes where no parent works full-time year-round. NBC's Chris Jansing reports.
"There's no doubt the recession has thrown a lot of people out of work and incomes have fallen," Rector said. "As we come out of recession, it will be important that these programs promote self-sufficiency rather than dependence and encourage people to look for work."

Mayors in 29 cities say more than 1 in 4 people needing emergency food assistance did not receive it. Many middle-class Americans are dropping below the low-income threshold — roughly $45,000 for a family of four — because of pay cuts, a forced reduction of work hours or a spouse losing a job. Housing and child-care costs are consuming up to half of a family's income.

States in the South and West had the highest shares of low-income families, including Arizona, New Mexico and South Carolina, which have scaled back or eliminated aid programs for the needy. By raw numbers, such families were most numerous in California and Texas, each with more than 1 million.

The struggling Americans include Zenobia Bechtol, 18, in Austin, Texas, who earns minimum wage as a part-time pizza delivery driver. Bechtol and her 7-month-old baby were recently evicted from their bedbug-infested apartment after her boyfriend, an electrician, lost his job in the sluggish economy.

After an 18-month job search, Bechtol's boyfriend now works as a waiter and the family of three is temporarily living with her mother.

"We're paying my mom $200 a month for rent, and after diapers and formula and gas for work, we barely have enough money to spend," said Bechtol, a high school graduate who wants to go to college. "If it weren't for food stamps and other government money for families who need help, we wouldn't have been able to survive."

About 97.3 million Americans fall into a low-income category, commonly defined as those earning between 100 and 199 percent of the poverty level, based on a new supplemental measure by the Census Bureau that is designed to provide a fuller picture of poverty. Together with the 49.1 million who fall below the poverty line and are counted as poor, they number 146.4 million, or 48 percent of the U.S. population. That's up by 4 million from 2009, the earliest numbers for the newly developed poverty measure.

Read more here.

Monday, December 12, 2011

Controlling trillions, women drive charitable giving

When Allison Lowe-Fotos turned 30, she didn't want gifts. Instead, she asked friends and family to donate online to the Chicago Foundation for Women. "Much to my surprise, I raised more than $800," says Lowe-Fotos, a social worker who serves on group's Young Women's Leadership Council. "It was empowering to know that my family and friends wanted to support my passion for this cause."

With her birthday request, Lowe-Fotos furthered what has increasingly become a fundamental truth in today's philanthropic world: Women are driving charitable giving. In fact, three out of four individuals in households with incomes of $200,000 or more report women are either the sole decision maker or equal partner in directing their family's philanthropy, according a new Bank of America Merrill Lynch survey released today.

"Women in this country currently hold the majority of wealth," says Claire Costello, senior vice president and national foundation executive for Bank of America Merrill Lynch. "So it behooves everyone in the nonprofit sector to pay attention to the financial clout and moral imagination of women as they really determine where dollars go."

Because they live longer than men, women could oversee more than $41 trillion passed from generation to generation during the next 50 years, according to the Center for Philanthropy at Indiana University, which researched the Bank of America report. For most women, however, philanthropy is much more than writing a check.

"Women give to causes close to their heart," says Lisa Dietlin, a Chicago-based philanthropic adviser. "They get directly involved, either by volunteering or providing ideas and problem-solving to make an organization better."


Not surprisingly, women's ongoing rise in philanthropy parallels their growing presence in the workplace and own accumulation of personal wealth. Also at work, however, has been the expansion of women's funding networks across the country during the last two decades. These organizations, usually community-based, typically grant anywhere from $10,000 to $2 million annually. More importantly, though, they provide women donors with a sense of collective impact.

"It's recognizing that we can do more together than we ever could alone," says Tracy Johnson, director of the San Diego Women's Foundation, which usually awards grants of $250,000 or more. "Every member puts $2,000 in the pot for five years to begin, and now you have something truly significant."

Many women first learn about a cause or funding network at a friend's kitchen table or in their living room. Jill Hammond, for instance, joined the Washington State-based Jewish Women's Funding Network in 2006 at the request of a close friend. She and its 49 other members solicit and vet grant proposals. Where the group's annual $25,000 grant goes is decided by ballot.

"Discussions are lively and everyone has a say," Hammond says. "What I appreciate most is that it is truly democratic."


Even on their own, women tend to be more strategic in their philanthropy than men, the Bank of America findings suggest. They are more inclined to create a plan and budget as well as undertake more due diligence before meting out funds.

"Women donors want to be partners, meet the leadership, go out into the field and see what a nonprofit really does on a day-to-day basis," says Sara Hall, founder of New Philanthropic Advisors, a Boston-based firm that counsels high-net-worth women donors. "They do real analysis and research."

Consider Sasha Rabsey, one of Hall's clients. A stay-at-home mom from the San Francisco Bay area, Rabsey three years ago packed up her family and spent five weeks in Ghana caring for sick children. The experience led Rabsey to form her own foundation, the HOW Fund, which has now given out nearly $200,000 to grassroots nonprofit groups throughout Africa. "I go on site visits and ask a ton of questions," she says. "Because being actively engaged is the only way to do this if you want to be successful."

This hands-on approach may also be why women tend to take more risks in their giving - and they are more willing than men to stop giving if the results aren't there. "Women are tenacious, dogged and willing to work on solving any problem an organization has," Dietlin says. "But if an organization does give back in kind, most women donors aren't going to give again."


At the Dallas Women's Foundation, one of its success stories is a donor who, when she first joined, only gave about $10,000 per year. Five years later, she was a $1 million donor, says Roslyn Dawson Thompson, who joined the network at its inception in 1985 as a donor and now is its CEO. "She had the means but didn't believe she had the power or the right to give more."

Indeed, two main distinctions in men and women's giving patterns is consistency and size. Men will often give every year to the same cause, frequently larger institutions such as their alma maters, according to both the Bank of America survey and other studies, and their donations tend to be larger. Women instead spread their wealth, giving smaller amounts to several groups.

"Women have great power in philanthropy," says K. Sujata, president of the Chicago Foundation for Women. "We're encouraging members not to be afraid to give in a way that makes a deep commitment both over time and in terms of the dollar amount."

Sujata also wants women to take credit for their giving. "They're giving to causes that are changing lives," she says. "Be bold about saying yes, I am directing my family's funds to this because it is important."