Study reveals that 385,000 Puerto Ricans, most of them people with disabilities, women and children who are victims of abuse, school dropouts, homeless people, pregnant teenagers and other vulnerable populations, receive essential services from community based organizations.

SAN JUAN, December, 2016 –  Community Based Non Governmental Organizations (NGOs) in Puerto Rico play a vital role in providing essential services to the island’s most vulnerable populations. A new study of 4,500 of these direct service NGOs determined that they generate about 50,000 jobs, have an impact of $1.3 billion in the economy, and serve 385,000 socially disadvantaged people, equivalent to one of every ten citizens in the Island. The social and economic impact of these NGOs is heightened in light of the crisis facing Puerto Rico as consequence of what many declare is an unpayable public debt of over $70 Billion.

The “Red de Fundaciones de Puerto Rico” (Puerto Rico Foundations Network: PRFN) and “Movimiento Una Sola Voz” (MUSV), which groups some 140 non-profit organizations, divulged this week the findings, included in a study about these community organizations’ impact. The research was conducted by the firm “Estudios Técnicos”. Rafael Cortés Dapena, President of the PRFN and the Ángel Ramos Foundation, and José Luis Díaz Cotto, MUSV spokesperson and Chief Executive Officer of the Sor Isolina Ferré Centers, urged the Puerto Rican government and the Fiscal Oversight Board to disregard recent proposals to cut funds assigned to community organizations. Instead, they encouraged preserving the assignments and establishing agile mechanisms so that the funds can be transferred in time, allowing the organizations to continue offering their services.

“It’s important that the government continue its social investment in Community Organizations with Social and Economic impact (COSEI) since they work with society’s most vulnerable sectors, which are the ones that need the most support during these times of crisis. As the government reduces its services to liberate funds to pay the public debt, people are turning in greater numbers to the COSEI, precisely when funds are being cut,” commented Cortés Dapena.

Recently, project 3004 was filed in the Legislature; this project reduces funds for non-profit organizations by an additional 15%, jeopardizing the stability of the services they offer. Both the PRFN and the MUSV oppose this project. In their defense, they argue that COSEI are hubs for innovative and transformative ideas that Puerto Rico needs to guarantee a good quality of life. Through these organizations, citizens can offer non-partisan solutions that enrich the human development, the cultural expression and the practice of democracy in the country.

MUSV spokesperson Díaz Cotto stressed that “investment in non-profit organizations is cost-effective. In healthcare, for example, for every dollar invested by these organizations to offer services, the government would have to spend almost $7 to offer a similar service. That’s a multiplier factor of 1 to 7. In education, the multiplier factor is 1 to 20. Furthermore, COSEI can match every dollar that the government invests, through other funding sources, such as private donations or federal funds, to multiply the funds and expand their services.”

A look at the COSEI 
The study “A look at the COSEI”, conducted by Anitza Cox and Joaquín Villamil of the firm “Estudios Técnicos”, is a profound analysis of this subsector of 4,500 institutions, which form part of the larger 11,570 non-profit organizations in Puerto Rico. The COSEI subsector is defined as non-profits that have local or federal tax exemption, receive grants from the government or have contracts with it, and offer services related to education, healthcare, community development, economic development, housing, the environment, culture, art and social services.

Cox and Villamil revealed some of the study’s findings about COSEI, including:

  • COSEI represent 50,000 full time jobs, about 7.4% of all private employment on the Island in 2016.
  • The payroll of these organizations amounts to $1.3 billion.
  • The impact on Puerto Rico’s consumption is $1.2 billion (2.2% of the GNP).
  • The government receives $66.7 million in revenues from the Sales and Use Tax (IVU)
  • Approximately 100,000 volunteers mobilize these organizations, equivalent to the labor of 6,000 full time employees.
  • With the country’s fiscal crisis worsening, seven out of 10 organizations have observed an increase of 40% in the demand for their services since 2007.
  • Most entities (62%) affirm that their difficulties are associated with the decline in the availability of funds, and with delays in disbursements. 
  • 52% have confronted cash flow problems and have been forced to take drastic measures, including reduction of services and layoffs. 
  • Some of the services areas include Social Services (54.1%); Education (51.6%); Healthcare (44%); Housing (25.2%); and Economic Development (25.2%).

Both the PRFN, which groups the principal grant making foundations of Puerto Rico, and the MUSV, have expressed their concern that the budget cuts anticipated by Puerto Rico’s new government, the probable reduction in federal funds and the austerity imposed by the new Fiscal Oversight Board, will have a detrimental social effect on the Island. “Solving the economic crisis can’t simply consist of just paying the public debt. The Fiscal Oversight Board and the executive director named by that Board must have the capability and sensibility to analyze in depth the human cost of the austerity measures before implementing them to ‘balance the public checkbook’. The social consequences of not taking into consideration this type of situation could create a social crisis of great proportions in Puerto Rico,” said Cortés Dapena.

The MUSV spokesperson commented that many COSEI “have already been forced to reduce services and staff members due to budget cuts. Talented young people that work in these organizations lose their jobs, and that also has an impact in Puerto Rico’s economy. If this pattern persists, Puerto Rico will continue depopulating and the migration towards the United States will intensify, with people seeking better jobs and services for their families. This situation can generate a humanitarian crisis where families can no longer support their children with special needs, their children who have abandoned school, their elders that require extensive care, and their relatives that suffer from addiction.”

Representatives of distinguished organizations, known for their legacies serving the community, attended the press conference, such as SER de Puerto Rico, Boys and Girls Club of Puerto Rico, Sor Isolina Ferré Centers, PECES, Taller Salud, Nuestra Escuela, among many others.

Cortés Dapena anticipated that the PRFN intends to maintain its support to community organizations, and to keep discouraging the government and the Fiscal Oversight Board from implementing budgetary cuts to these institutions. The PRFN will continue its fundraising efforts among foundations in the United Stated and the Puerto Rican diaspora, to strengthen COSEI on the Island so that they can continue their essential efforts on behalf of Puerto Rico. 


You can see Addendum: Una mirada a las organizaciones comunitarias de impacto social y económico HERE.