We can fight poverty and help the NC economy at the same time
Each day, North Carolina’s 34 local community action agencies help low-income individuals overcome poverty, secure housing, pursue education, and find jobs. In recent years, these agencies—agencies like Passage Home, Inc., in Wake County—have assisted some 121,000 people annually, a number roughly equal to the population of Wilmington.
North Carolina’s community action agencies have a rich history of service. These organizations generally emerged following the 1964 passage of the Economic Opportunity Act, which provided federal funding to local nonprofit and public agencies to develop, along with affected communities, programs to eliminate poverty. Today, federal funding underwrites, on average, $19 million in annual statewide spending on community action programs; that equals an investment of $8 for each of the state’s 2.2 million low-income residents.
At first glance, this federal investment seems modest, but it actually provides a foundation for statewide economic opportunity initiatives. Today, every $1 in federal funds awarded through the Community Services Block Grant Act, the successor to the Economic Opportunity Act, helps local organizations leverage more than $12 in additional resources. In the typical year, community action agencies combine their small federal grants with other public and private funding to deliver various services, with the bulk of the resources dedicated to housing programs and educational initiatives for low-income children.
Besides helping individual families transcend poverty, those resources have significant—though significantly overlooked—impacts on North Carolina’s economy, as measured by economic output, jobs, labor income, and tax receipts. If not for its annual Community Services Block Grant, North Carolina would have a smaller economy, fewer employment opportunities, and fewer tax dollars to support public services.
Consider the impact on economic output, as documented in a new study from the N.C. Community Action Association, a nonprofit membership organization. The study found that the state’s annual Community Services Block Grant, when combined with certain programmatic outcomes, generates $43 million annually in statewide output. When leveraged funds are included, statewide output rises by $450 million annually. Put differently, every $1 in spending on community action programs creates more than $2 in additional output.
Similar impacts occur in the state’s job market. Core federal funding provided to the state alone supports 415 jobs across all industrial sectors each year. When leveraged funds are included, 5,100 jobs in North Carolina are supported—directly or indirectly—or induced by community action spending. By extension, such spending boosts statewide labor income by as much as $195 million annually.
Finally, the economic activities tied to community action programs generate additional tax receipts for the state and its local governments. Community Services Block Grant funding alone yields $2 million annually in state and local tax receipts, and the inclusion of leveraged resources sparks another $23 million per year in tax revenues—revenues that support public services like education.
North Carolina’s community action agencies are known for helping low-income residents escape poverty. Yet the money invested in such programs ripples out through the larger economy as measured in terms of output, jobs, earnings, and tax receipts. Those impacts, however, too often are overlooked.
Put simply, community action works. Without its annual Community Services Block Grant, North Carolina would have a smaller economy, fewer jobs, lower earnings, and fewer tax receipts than it currently does. And without community action, tens of thousands of low-income North Carolinians would be left to confront poverty on their own.