DC OST Coalition Moves District Toward Equitable Insurance Requirements for Afterschool & Summer Programs

January 26, 2023
Blog Post

A graphic illustrating the OST & ORM Workflow

The DC Out-of-School Time (OST) Coalition is making progress in its advocacy to achieve equitable insurance requirements for publicly funded afterschool and summer programs. In a meeting last week, DC officials agreed to reassess the current “one-size-fits-all” policy in favor of a model that requires insurance levels that fit each organization’s needs, effectively reversing a policy change made under the prior leadership of the Office of Out-of-School Time Grants and Youth Outcomes (OST Office).

Several leaders from coalition member organizations met with the Director of the DC Office of Risk Management (ORM) and staff from the Deputy Mayor for Education (DME), which houses the OST Office and provides grants for OST programming through Learn24. OST leaders discussed inequities built into the current policy and proposed a more individualized approach that better aligns with organizations’ size, budget, and programming. The meeting resulted in ORM and DME representatives agreeing to reassess the current policy and transition to a model that requires insurance levels that fit each organization’s needs. The decision to move away from customized coverage levels to uniform coverage levels was made by the OST Office in an effort to streamline processes. However, ORM Director Jed Ross explained that insuring nonprofit OST organizations should not be an arbitrary process and that his staff will work with the OST Office to reinstate individualized coverage.

We are hopeful that making this change will help ensure that more public dollars for afterschool and summer are being directed to providing high-quality, affordable opportunities to more young people in the District. Organizations that provide free or low-cost programming to DC’s young people should not be subject to insurance costs disproportionate to their size. When they are, the budget to pay for the insurance premiums takes away dollars allocated to programs for children and families. The current policy puts more of a financial burden on smaller community-based nonprofit organizations than those that are larger and better resourced.

Nonprofit leaders understand and agree with the need for insurance to protect organizations and the government agencies that fund them against risk. At issue here is the amount of and types of insurance required. For example, insurance brokers who work with OST nonprofits have told organizations that, in many cases, the levels and types of insurance required by the DC government are excessive and unnecessary for specific programs. In some cases, insurance underwriters have ended long standing business relationships with organizations because they found underwriting requirements unreasonable and unfeasible.

Why it matters for OST organizations and the youth they serve

Most OST organizations rely on some level of public grants to cover program costs. Typically, insurance is either not covered by grant funds at all, or grantmakers impose strict limits to the “indirect” costs for which programs can use grant funding. This issue has forced some organizations to delay programming to find funding to pay for insurance, which results in young people missing out on days or weeks of enrichment, support, instruction, and interaction with peers.

For one organization, the rising insurance costs have caused the organization’s bills to more than double. With the funding for insurance costs alone, this organization could provide programming to three more schools or pay half the salary of one staff member. According to this program’s leader, “We know that insurance is important, and we carried it before being asked, but the requirements aren’t specific to what we do or how many kids we serve, so we end up paying more than we should.”

Insurance costs alone account for a third of the organization’s total budget, according to another OST leader. “This tremendous increase in insurance costs has forced us to let staff go, prevented us from increasing hiring this year as more schools have expressed interest in our programs, and we’ve had to shift our operational budget.”

“Many small nonprofits organizations that service youth in Wards 7 and 8 have had to discontinue service,” said another program leader. “The impact is negative and devastates an organization’s capacity to foster long-term sustainability.”

Coalition member organization Urban Adventure Squad wrote about this issue in a December 2020 Washington Post op-ed co-authored with DC nonprofit Living Classrooms, pointing out that some of the insurance requirements are not compatible with the types of programming the organizations provide. They wrote, “Living Classrooms was required to buy $2 million in ‘cyber liability insurance,’ even though our grant is to train and hire young people from neighboring wards to maintain hiking trails and guide visitors in the D.C.-owned Kingman and Heritage Islands Conservation Area. We understand why D.C. should carry its own insurance against cyberattacks and data breaches, but forcing nonprofits to cover that liability is unreasonable and expensive. Raising our existing coverage from $500,000 to $2 million will cost us nearly $4,000.”

In Urban Adventure Squad’s case, the stress of increased insurance requirements that were not aligned with its operations, budget, or the size of its grant ($25,000) influenced the organization’s difficult decision not to apply for an SY2022-23 Learn24 Small Nonprofit Grant.

The Coalition is grateful for the willingness of the ORM and DME offices to hear about challenges caused by administrative decisions and work directly with the organizations that are affected by them to come up with solutions that both protect all stakeholders against risk and make sure that more public funding for OST will directly benefit DC youth and families. We plan to continue working with these agencies to support a smooth transition to more equitable and effective insurance requirements in the coming year.