Nutrition

V. PROGRAM FUNDING, COSTS, AND EFFICIENCY

B. PROGRAM FUNDING

ENP meals and services are supported through a diverse system of funding sources. In addition to Title III monies, sources of program support include other federal funds, state and local funds, participant contributions, and private funding. To the degree that program managers can leverage Title III funds with resources from these other funding sources, this creates opportunities to provide more meals and support services. This section examines these sources.

1. Methodology

Any attempt to obtain complete, direct information on the sources of funding used by the several layers of program administration in the ENP faces formidable challenges. Many ENP providers operate as relatively small organizations. Furthermore, key ENP staff in many of these organizations tend to come from service-oriented backgrounds, and many prefer to focus on operational issues rather than on financial systems. The types and sophistication of accounting systems vary greatly across projects, and often the same cost and funding terms are used with somewhat different meanings in different ENP contexts. Because of these and similar factors, only on-site audits of a sample of agencies at each level would provide reasonably complete and consistent organization-level financial information about the ENP organizations. This was well beyond the scope of the project or the resources available for it.

In light of these issues, we have adopted a compromise research strategy that focuses on average funding levels across organizations, and draws selectively on data from the Administration on Aging (AoA), data from the Nutrition Project survey, and data from the cost survey discussed in Section A. Our analysis focuses on the costs of providing program meals, both because the bulk of program resources are spent on this service area and the most information is available on this service area. Information about Title III funding per meal is taken from AoA administrative data, information about levels of participant donations is taken from data obtained in the Nutrition Project survey, and information about the overall level of costs is taken from the Project Cost survey. State and local contributions, combined with private donations, are computed as a residual.

2. Findings on Leveraging Title III Funds

Table V.12 summarizes the sources of funding for Title III congregate and home-delivered meals. It shows, for instance, that when only monetary costs of the meals are considered, Title III-C funds account for approximately 43 percent of the total costs of congregate meals and 26 percent of the total cost of home-delivered meals. When nonmonetary support, such as volunteer labor and in-kind contributions are considered in the base, these numbers drop to 37 percent and 23 percent, respectively. Despite participants' low income levels, their contributions account for 20 percent of both congregate and home-delivered meal costs. Other major resources for the program include the USDA cash in lieu of commodities program and state, local, and private funds.

TABLE V.12
SOURCES OF ENP FUNDING PER MEAL  (In Dollars)

Notes: Lines 1 and 2: Entries are based on fiscal year 1993 data. They are based on dividing data on expenditures in Figure 1 of AoA’s "National Summary of Program Activities" by the "units of service" data in the same figure. It should be noted that this focuses the analysis on meal costs and excludes certain related services, such as nutrition education.

Lines 3 and 4: In fiscal year 1993, the USDA basic reimbursement was 62.1 cents per meal, based on the 2/28/95 General Accounting Office survey of domestic food programs, p. 28. Based on p. 27 of that document, a proportion--(6.1/146.0) of that 62.1 cents was commodities, and the rest was cash in lieu of commodities. In addition, p. 27 indicates there were $1.2 million of bonus commodities, which, divided by 229 million meals, yields, after rounding, a penny per meal added to commodities.

Line 5: Based on project survey data.

Line 6: State, local, and private funds. Computed as a residual from the total and the other lines.

Lines 7 and 8: Based on data from the project cost survey.

Line 9: Based on data from the project cost survey.

NA = Not applicable.

USDA = U.S. Department of Agriculture.

GAO = General Accounting Office.

These findings imply considerable leveraging of Title III-C funds in operating the ENP. For instance, the data cited here on total costs for congregate meals imply that there are $2.70 of congregate meal expenditures for every $1.00 of Title III funds. [ Table V.12 shows that Title III-C1 funds are 37 percent of total congregate meal costs. If 37 cents of Title III-C1 yields $1.00 of expenditures, then $1.00 of Title III-C1 expenditures yields ($1.00 ÷ 0.37) or $2.70 of total expenditures.] Thus, a dollar of Title III-C money is leveraged with $1.70 of other funding. [ It should be noted that the leverage rates are somewhat lower when all federal funds, including USDA funding, rather than just Title III-C funds, are counted in the computations. Even when this is done, however, the rates are substantial.] The comparable rate for home-delivered meals is $4.35 of total expenditures for every $1.00 of Title III-C funds (that is, $1.00 of Title III funding is supplemented with $3.35 from other sources). In part, the high leveraging rates reflect the fact that, by law, states are required to supply resources to match the federal contribution.

One interesting aspect of the results in the table is that they show the average federal Title III-C contribution to a congregate meal is considerably higher than the average Title III-C contribution to a home-delivered meal. This fact does not result from our methodology but rather is directly apparent in the AoA "National Summary of Program Activities," fiscal year 1992, from which these numbers are taken. [ The difference in average contributions is not just an artifact of these AoA numbers. A similar result is obtained by dividing total Title III-C1 and Title III-C2 funding by the congregate and home-delivered national mean counts, respectively.] Two possible explanations for this include the following: (1) Projects may find it easier to raise external funds for the home-delivered program, since the need for this program may be more apparent to potential donors, and (2) nutrition projects may be attempting to increase the numbers of home-delivered meals they can supply by subsidizing these meals out of their own fundraising relatively more heavily than they subsidize the congregate meals (though as shown in the table, there are considerable state and local subsidies for both kinds of meals).

3. Participant Contributions

One aspect of program revenues that has received attention in past discussions about ENP funding is participant donations. Under current law, nutrition projects can encourage participants to contribute to the cost of the meals served, but they cannot require payment as a condition for receiving the meal. As wehave seen, participant contributions represent a significant component (20 percent) of overall project revenues.

Some analysts have argued that strengthening contribution requirements could further increase this revenue source, allowing the program to serve more people. Other observers are concerned that the current policy may inhibit participation in the program and that strengthening contribution requirements would only exacerbate this situation. To examine the extent of current donations, we asked nutrition project staff whether they suggested or received donations from either congregate or home-delivered meal participants.

Table V.13 indicates that virtually all projects receive donations. About 90 percent suggest donations, which range from one to two dollars in about 70 percent of projects for each type of meal service. Donations for home-delivered meals are usually slightly higher, presumably to defray transportation costs. Average contributions for each type of meal service are nearly identical, at about $1.06 per meal. Actual donations are slightly less, on average, than suggested amounts.

TABLE V.13
TITLE III PROJECT-REPORTED PARTICIPANT MEAL CONTRIBUTIONS  (Percentages, Unless Stated Otherwise)

Source: Elderly Nutrition Evaluation, Nutrition Project survey, weighted tabulations.

Information on participant contributions from the participant survey indicates that 94 percent of Title III congregate participants and 73 percent of home-delivered meal participants typically make a contribution for the program meals they receive (Chapter II, Table II.15). The majority of participants who usually make contributions reported that the suggested amount was "about right." Only approximately 10 percent of participants who usually make contributions reported that the suggested amount was "too low." The likelihood of making a contribution is related to household income, as participants with incomes below the DHHS poverty threshold, especially home-delivered participants, are less likely to contribute than participants whose income is above the poverty level. [ For home-delivered meals, contribution behavior by poverty status is as follows. For participants with incomes below 100 percent of the DHHS poverty threshold, 65 percent usually contribute; for participants with incomes between 100 percent and 200 percent of the DHHS poverty threshold, 78 percent usually contribute; and 96 percent of participants with incomes greater than 200 percent of the DHHS poverty threshold usually contribute. For home-delivered participants, the mean dollar amounts usually contributed per meal (calculated for all home-delivered participants) are $1.37, $1.43, and $2.13, respectively, for participants with incomes below 100 percent, between 100 percent and 200 percent, and above 200 percent of the DHHS poverty threshold. A similar, although less striking, pattern exists for congregate participants. Ninety percent of congregate participants with incomes below 100 percent of the DHHS poverty threshold typically contribute, compared with 94 percent of participants with incomes above 200 percent of the poverty threshold. For congregate participants, the mean dollar amounts usually contributed per meal (calculated for all congregate participants) are $0.99, $1.23, and $1.39, respectively, for those with incomes below 100 percent, between 100 percent and 200 percent, and above 200 percent of the poverty threshold.] Presumably, many of the participants who are not making contributions do not do so because of their low incomes.

While not conclusive, the fact that most Title III meal program participants are poor or near poor, and that the majority believe the suggested contribution is either about right or too high, suggests that a mandatory cost-sharing policy would discourage participation, especially by low-income older persons.

Last Modified: 1/15/2009 11:05:58 AM

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