Friday, September 21, 2012 - 9:05am

 

posted by
Clyde W. Kunz, CFRE,
ASU Lodestar Center
NMI Instructor
Owner,
Clyde Kunz and
Associates, LLC


Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

For nearly 50 years, the Federal Poverty Limit (FPL) has been the standard measure used by governments and nonprofit organizations serving low income individuals and families to determine eligibility for anti-poverty programs. The FPL was based almost exclusively on the cost of food, assuming that food is one-third of a family’s budget. While it has been adjusted for inflation, it has never accurately reflected household costs, nor does it take into account childcare costs or other family variables. The FPL for a family of three is $19,090, regardless of whether those three people are adults, teen-agers or infants.


The Women’s Foundation of Southern Arizona (WFSA) commissioned a study to create a more comprehensive, useful measure of self-sufficiency. The recently released report, How Much is Enough in Your County? The Self-Sufficiency Standard for Arizona 2012, is a comprehensive, user-friendly tool that can be used by agencies and individuals to help Arizona’s families make real progress toward economic security.

The Self-Sufficiency Standard in the report calculates and reports the income needed by working families to meet basic necessities. Basic minimum needs accounted for include: housing, child care, food, transportation, health care, and expenses such as clothing, telephone and household items. It also accounts for taxes (minus federal and state tax credits). The Self-Sufficiency Standard is calculated for 70 different family types in each of Arizona’s counties, and data is provided separately for each county.


Data in this report come from scholarly research and publicly-available credible sources (such as the U.S. Census Bureau), which are updated regularly and are age- and geographically specific. Whenever available, the Self- Sufficiency Standard uses government standards such as the USDA food budgets based on nutrition requirements, or HUD’s Fair Market Rents for housing assistance. Unlike other measures such as the FPL’s one-size-fits-all model, the Standard calculates household costs not just by the size of the family and the number of children, but also by age of the children, as some costs, particularly child care and food, differ dramatically by age. Finally, while the FPL is the same no matter where one lives, the Self-Sufficiency Standard varies by Arizona county.

Moreover, the report found that Arizona has a shortage of jobs that pay a self-sufficient wage. Of the top ten occupations in the state, measured by the number of people who work in each occupation, only two - registered nurse and general/operations manager - pay median wages that would meet the standard for a family comprising one adult, one preschooler and one school-aged child. Consequently, many hard-working, low-income families look to public supports like food stamps, WIC, KidsCare and subsidized child care to keep their heads above water. But since these programs are typically based on the FPL, families may earn just enough money to be disqualified for public assistance–but not enough to be self-sufficient. They may end up having to choose between basic needs, such as foregoing health insurance, if their paychecks are consumed by housing, food and transportation costs.

Examples of the report’s findings:

  • The amount needed to be economically self-sufficient varies considerably by geographic location. For instance, the amount needed to make ends meet for one adult, one preschooler, and one school-age child varies from $18.29 per hour ($38,624 annually) in La Paz County to $24.20 per hour ($51,115 annually) in Maricopa County, or from 202% of the FPL to 268% of the FPL (page 52). 
  • The amount needed to achieve economic self-sufficiency varies considerably by family type. For example, one adult living in Santa Cruz County needs an hourly wage of $8.35 ($17,630 annually) to meet basic needs. However, if the adult has a preschooler and a school-age child, the amount necessary to be economically secure more than doubles, increasing to $18.83 per hour ($39,770 annually) in order to cover the cost of child care, a larger housing unit, and increased food and health care costs. For families with young children, the cost of housing and child care combined typically make up about 50% of the family’s budget. For this family type in Santa Cruz County, child care is 29% of the family’s budget while housing is 20%. Food costs take up 16% and health care is 13% of the family’s budget (pages 5-6).

Since its publication in May, the Women’s Foundation of Southern Arizona has worked to raise public awareness about the Self-Sufficiency Standard and encouraged its use in a variety of ways:

  • Government: The Mayor’s Commission on Poverty in Tucson, Ariz. is using the Self-Sufficiency Standard to define poverty. At least one Native American tribe is using the report to call out the huge gap between the standard and the median household income for their region. 
  • Business: Cox Communications and the Metropolitan Tucson Chamber of Commerce now have a deeper understanding of the childcare costs for the region’s workforce, and are investigating ways they might support employees who face those expenses. 
  • Nonprofit: In addition to understanding the true cost of self-sufficiency, social welfare organizations are also using the data to advocate for public policies that reflect families’ true costs. Grant writers are using the data in the report to document the needs in their communities.

The Self-Sufficiency Standard for Arizona 2012 was produced for the Women’s Foundation of Southern Arizona by Dr. Diana Pearce at the University of Washington. Copies of the report and data tables are available at no cost at www.womengiving.org and at www.selfsufficiencystandard.org. Further information about the Self-Sufficiency Standard in general or for other states and related research and methodology can be found at www.selfsufficiencystandard.org.


Clyde W. Kunz CFRE is owner of Clyde Kunz and Associates, a consulting firm providing services to philanthropists and to nonprofit organizations. Kunz is also an instructor in the ASU Lodestar Center's Nonprofit Management Institute, and serves on the Board of the Women's Foundation of Southern Arizona.


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Comments

Just a few years ago I found myself in the situation of not being able to afford health care and licensed child care for my family of 3 (two adults, one infant), and often times struggling to scrape up enough money for the groceries we needed. It was very frustrating to apply for assistance time after time from program after program, and hear the we "made too much money." Equally as frustrating was making about $500 - $1000 or so "too much" to qualify for the Earned Income Tax Credit. Though I no longer find myself in this situation, I am so encouraged by this research and the development of the self sufficiency standard. The "one size fits all" model definitely does not work for "all," leaving many without enough, while finding some with more than they "need."
Thank you for sharing this data, Clyde!

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