Social Services, NEC

SIC 8399

Companies in this industry

Industry report:

This industry consists of establishments primarily engaged in providing social services, not elsewhere classified. This classification includes advocacy groups, anti-poverty boards, community action and development groups, councils for social agencies, fund-raising organizations (except on a fee basis), health and welfare councils, regional planning organizations, social change associations, and social service information exchanges (such as information on alcoholism or drug addiction). This industry does not include foundations and philanthropic trusts classified in SIC 6732: Educational, Religious, and Charitable Trusts; civic, social, and fraternal organizations classified in SIC 8641: Civic, Social, and Fraternal Organizations; political organizations classified in SIC 8651: Political Organizations; or companies that raise money on a fee or contract basis for organizations classified in SIC 7389: Business Services, Not Elsewhere Classified.

Industry Snapshot

This industry was deeply impacted by the economic recession of the late 2000s. With unemployment levels edging toward 10 percent late in 2009 and many state governments as well as the federal government cutting back on services, social services agencies attempted to service more people with fewer resources. Agencies that focused on philanthropy found donations declining as U.S. consumers cut spending and establishments involved in community development were faced with declining business sectors and a lack of available credit.

Although the economy looked to be on its way to recovery by the start of the second decade of the twenty-first century, social service agencies continued to struggle. Some, however, pointed out a light at the end of the tunnel. According to National Underwriter Property & Casualty Insurance, in January 2012, those insuring social service agencies were seeing "increasing activity in child-welfare organizations, counseling centers, and group homes and shelters," among other charity organizations.

Organization and Structure

The social service organizations within this industry consist of national organizations, state and regional associations, federal government agencies, state government agencies, and clearinghouses and information centers. National organizations include voluntary associations, advocacy groups, professional organizations, and other nonprofit groups providing services at the national level. State and regional associations are generally affiliates of national groups. State and federal government agencies are government owned and operated but often influence nongovernmental organizations. Clearinghouses and information centers are a grouping of governmental and non-governmental services that collect, organize, and distribute information.

Organizations within this industry operate in many ways. For example, some establishments rely on fund-raising efforts, while others use membership dues as their primary means of support. Certain organizations conduct political lobbying on behalf of the social cause they represent.

A distinguishing factor of establishments in this industry is their use of money. Donations to establishments that primarily engage in charitable, educational, or research activities are tax-deductible to the donor. Establishments that conduct substantial lobbying activities, however, cannot receive tax-deductible donations. In addition, money collected for political election campaigns must be strictly accounted for and is heavily regulated by government bodies, such as the Federal Elections Commission.

Establishments in this industry are structured according to the types of activities they engage in, which are usually related to the services they provide. They are often referred to as social movements, improvement associations, pressure groups, citizen participation groups, or citizen action groups.

Social movements are groups that advocate changes in beliefs or practices of people within a relatively large geographical area. These establishments focus on increasing their membership and are usually managed by a paid professional staff. In addition, some social movement organizations lobby legislators, hold rallies, and promote their views through media-related activities.

Improvement associations advocate a belief or practice and foster it among their members to promote a better state of affairs within society as a whole or to improve conditions within their professions, religions, or patriotic societies. The larger organizations have paid staff, with a central office and branches throughout the country.

Pressure groups are organizations whose main feature is their advocacy of specific-issue legislative actions. On average, they are smaller than other groups working for social change. These establishments may be sponsored by companies whose products or political ideologies are under attack. These groups are often designed to conduct political lobbying activities and fund-raising for political candidates.

Citizen participation groups basically serve as advisory committees to community councils, charitable boards, and government agencies. Their staffs are made of a small group of professionals hired to run the administrative functions, as well as uncompensated members who act as advisors.

Hundreds of citizen action associations (CAAs), which are organized to protect and represent the rights of the community, particularly those with low-income and welfare recipients, protecting them in matters such as housing costs and conditions and unfair business practices, belong to the Community Action Partnership. These non-profit groups were created in 1964 by the Economic Opportunity Act of 1964. By the turn of the twenty-first century, there were almost 1,100 CAAs nationwide.

The primary source of money for CAAs comes from the Community Services Block Grant (CSBG), according to the National Association of Community Action Agencies. This block grant totals less than 10 percent of CAA funding. According to the official CAA website, "Whether it's a Head Start program, Weatherization, job training, housing, food bank, energy assistance, financial education, or any of the other 40+ distinct programs, CAAs work to make America a better place to live." As of 2012, CAAs served some 17 million poor Americans.

Background and Development

Social action organizations began in Victorian England when societies formed in the upper classes to give charity to people working in work houses and serving sentences in prisons. The idea soon caught on in the United States, and by the turn of the century, philanthropy had developed into an industry. Social action organizations in America emerged with labor groups organizing to represent workers. At the same time, immigrant communities and new urban neighborhoods were developing groups and committees. These early groups were concerned with workers' rights and retaining a village life in newly developing cities. During the 1920s, local and community organizing expanded into social planning and fund-raising to support social agencies.

During the Great Depression, social agencies and community organizing took on new characteristics. Labor organizations became distinct political entities that elected their officers and organizers. Volunteer reform organizations worked toward getting citizen participation on issues such as women's rights. Rather than acting as organizers, social workers were working more within and through various government agencies, providing services for the public.

There were an estimated 28,800 establishments in the social services industry in 2009, generating more than $36.5 billion in revenues. The industry employed a workforce of 314,000. The largest sector within the industry on a non-fee basis was fund-raising organizations that conducted business from 3,888 establishments, representing 14.5 percent of the industry. Combined, they garnered revenues of more than $10.8 billion with a workforce of 54,353 people. Community development groups numbered 4,901, or 18.3 percent of the industry. These groups employed 58,247 people with revenues of nearly $6.4 billion. Another noteworthy sector included advocacy groups, accounting for 2,256 establishments, 25,236 employees, and nearly $1.9 billion in revenues. Other important sectors included community action agencies, with 1,545 establishments, about 24,794 workers, and revenues of $2.1 billion; and health systems agencies, with 1,632 establishments, some 39,916 workers, and more than $4.4 billion in revenues.

Current Conditions

Even though by 2012 the economy seemed to be on the way to recovery, social service agencies continued to struggle to meet the needs of those they serve. For example, according to Shelly DeLong, social services coordinator for a Salvation Army branch in Madison County, Indiana, "It's just becoming consistently harder to service needs in the county. Our food pantry is very stretched. Some weeks we've had to close down when we didn't have anything to give." Although dollars were hard to come by, DeLong noted that volunteers were not and that the number of volunteer hours registered by her division had doubled in the past year.

Industry Leaders

Anti-poverty organizations seek to reduce poverty and hunger in the United States and other countries. They include organizations such as the Food and Agriculture Organization (FAO), created by the United Nations to help alleviate poverty and hunger by promoting agricultural development, improved nutrition, and food security; Institute for Research on Poverty (IRP), established in 1966 at the University of Wisconsin-Madison by the U.S. Office of Economic Opportunity as a national center created to seek ways to reduce poverty in America; and Food for All, a voluntary initiative of the American Food Industry to relieve hunger and malnutrition in the United States and around the world. Between 1985 and 2012, Food for All raised $76 million for hunger-related charities in the United States and abroad. There are hundreds of other anti-poverty organizations that help the poor and hungry.

Advocacy groups represent and defend the rights of others, particularly, but not limited to, those who do not have a voice to protect themselves, such as children, the sick, the disabled, the elderly, and animals. Organizations that fall into this enormous group include Children's Protection and Advocacy Coalition, the Center for Patient Advocacy, the National Alliance for Research on Schizophrenia and Depression, the 60 Plus Association, and the United States Humane Society. Several advocacy groups support issues such as education, the arts, abortion (both pro-life and pro-choice), and political matters.

High-profile associations that can be considered social change organizations include Mothers Against Drunk Driving (MADD), the National Organization for Women (NOW), and the National Gay and Lesbian Task Force.

Social service information exchanges provide the public with information on a specific topic of interest. These exchanges include the Community Information Exchange, a national nonprofit information service that provides community organizations with the information needed to successfully revitalize communities, and The Adoption Information Exchange, a Washington state nonprofit volunteer organization dedicated to making adoption information available to the public. The latter provides a centralized location for birthparents and prospective adoptive parents to connect.

Welfare councils are designed to support and improve human rights. Health councils promote health issues. Many local and regional communities have their own health councils to improve the way health care services are delivered, paid for, and used; to address health issues; to promote disease prevention; and to support health care industry workers. The National Safety Council is a major nonprofit public service organization whose mission is to educate and persuade society concerning safety, health and environmental policies, and practices and procedures that prevent human suffering and economic loss.

An example of a community action group is Classical Action, an organization that uses the talents and resources of the performing arts community to raise money for AIDS-related services across the United States. A large community action group is the National Association of Community Action Agencies, a national forum for policy on poverty. Community action groups can consist of people of any age. The Youth Action Groups are comprised of young people who are supported by police, teachers, and youth workers to find solutions to community crime.

Citizen action groups are organized to protect and represent the rights of the community. Citizen Action is a leading advocate for health care reform, environmental clean-up, and campaign finance reform. Its state organizations consist of a coalition of community members organized in grassroots efforts to fight unfair business practices, such as high utility rates.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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