Written Testimony of Ryllie Danylko, Policy Analyst, before the Committee on Public Works & Operations

DC Action Public Testimony Logo
February 1, 2023
Testimony
Person Testifying: Ryllie Danylko
Title: Policy Analyst, DC Action
Testimony Heard By: Committee on Public Works & Operations
Type of Hearing: Public Testimony

February 1, 2023

Dear Councilmember Nadeau and members of the Committee on Public Works & Operations,

I am writing to testify about an issue related to the performance of the DC Office of Risk Management (ORM), and to request oversight of this agency from the committee. ORM appears to have signed off on a policy change from the DC Office of Out of School Time Grants and Youth Outcomes (OST Office) that created blanket insurance requirements for publicly funded out-of-school-time (OST) providers, resulting in inequitable and unattainable levels of coverage for nonprofits that provide afterschool and summer programs to DC’s youth. Though this decision was made by the OST Office, ORM should also be held accountable through its stated role of “reviewing contracts, agreements, grants, permits, and memoranda of understanding, amongst other contractual instruments, to determine the appropriate coverages and applicable limits,” as per the ORM website.

Members of DC Action’s DC OST Coalition met earlier this month with ORM Director Jed Ross and staff from the Office of the Deputy Mayor for Education, which houses the OST Office. In this meeting, agency representatives 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 prior leadership of the OST Office, and to provide support to grantees who are negatively impacted by the existing requirements. At this meeting, Director 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. While we are hopeful about the outcome of this meeting, we ask the committee to hold ORM accountable for providing this support and collaborating with the OST Office to create and implement a new policy that prioritizes equity and individual organization size and needs.

Making this change is important because it will help ensure that more public dollars for afterschool and summer are 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.

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.

DC Action and the OST Coalition are 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 ask the committee to follow up with the ORM to ensure that they work with the OST Office to implement more equitable and effective insurance requirements in the upcoming fiscal year.

Thank you for your time and consideration. If you have any questions I can be reached at the contact information below.

 

Ryllie Danylko

Policy Analyst

DC Action

202-798-1470

rdanylko@dckids.org