real cost of welcome

Lutheran Immigration and Refugee Service

A Financial Analysis of Local Refugee Reception

ContentsIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2About Refugee Resettlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16For Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

The Real Cost of

WelcomeA Financial Analysis of Local Refugee Reception

Lutheran Immigration and Refugee Service

700 Light Street, Baltimore, Maryland 21230410/230-2700 • [email protected] • www.lirs.org

IntroductionDear Reader,

In the Lutheran Christian tradition true hospitality is positioned in thecenter, not at the periphery. Thus, hospitality comes at a cost—authenticwelcome requires sacrifice and the investment of time, resources and self. Asan extension of this heritage of hospitality, Lutheran Immigration andRefugee Service (LIRS) positions refugee resettlement and welcome at theheart of our mission. Indeed, it is the thread of our 70-year history.

It is in this spirit of real welcome that LIRS presents this report inresponse to a growing concern by our local partners about their capacity toextend authentic hospitality to our nation’s refugees. With an ever-shrinkinginvestment from our federal partners, we fear that the capacity to engage inreal welcome has been compromised.

LIRS believes that private participation is an essential aspect of refugeeresettlement. Governments do not integrate newcomers, people do. Andrefugee resettlement in the United States has been enormously successfuldue in large part to the engagement of local congregations and individualmembers of host communities in welcoming these newcomers. Yet we arewitnessing troubling strains on this public-private partnership due to thegrowing imbalance between federal resources and expectations and theincreasing reliance upon our local partners to raise support. After manyyears of slowly rising resource pressure, LIRS local resettlement agenciesreport that their situation has become critical, with high levels of staff burn-out and ever-widening gaps between resources and service needs,particularly in the early stages of resettlement.

Therefore, in October 2008 LIRS initiated a cost analysis of the services tonewly arrived refugees. The study focused on the activities required by the U.S.Department of State Bureau of Population, Refugees and Migration (PRM).Known as the Reception and Placement Program, this program is the onecommon set of services provided to all refugees resettled into the United States.

Since 1980, when the program was established, the governingdocuments have expanded from a few pages in length to 79 pages at the timeof this study. The increase in contractual aspects of the program is but oneconcrete illustration of the shift from the voluntary-sector-led effort of the1950s to the government-led, highly complex, professionalized andadministration-laden program of today. While private and othernongovernmental support continues to play an important role in the

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The Real Cost of Welcome:

reception and integration of refugees, the federal emphasis on delivering astandard professional package of services and goods combined with afunding structure that does not even keep pace with inflation has reduced theresettlement service sector’s capacity to maintain critical aspects of theprogram that engage the community and generate resources. This reducedcapacity compounds the challenge of maintaining a viable local program withminimal federal funding, initiating a self-reinforcing trend that compromisesthe long-term outcomes for refugees and weakens the voluntary sector.

Our study was limited in scope, entirely self-funded and carried out bythe staff of our local affiliate agencies. We stand by the findings butacknowledge the limitations of our research and analysis. It is our hope thatthe results that we present here will lead to a more comprehensive look atthe status of the valuable and productive public-private partnership betweenthe voluntary agencies engaged in refugee resettlement and the federalgovernment, leading to shifts in the funding structure and in a renewedemphasis placed on the vital role of community engagement.

Sincerely,

Ralston H. Deffenbaugh, Jr.LIRS President

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About Refugee ResettlementRefugees are individuals who cannot return to their home country due to awell-founded fear of persecution for reasons of race, religion, nationality,membership in a particular social group or political opinion. Refugees needboth immediate protection and durable, long-term solutions. For some,resettlement in the United States meets those needs. When refugees aregranted U.S. resettlement they are able to rebuild their lives and regain fullmembership in society. The U.S. government expresses its commitment toprotect and develop durable solutions for refugees worldwide through therefugee resettlement program.

The United States can be proud that it resettles more refugees than anyother country in the world. This commitment to formal refugee resettlementdates from the Second World War, at which time the effort was led bynongovernmental and international agencies. Such was the case until 1980when the formal Refugee Act was passed.

Under the Refugee Act refugee resettlement became a U.S. federalgovernment program carried out in partnership with national and localnongovernmental organizations. This public-private partnership was createdto establish national standards for refugee services and to provide criticalresources for their successful integration.1

Three agencies within the federal government currently manage distinctaspects of refugee resettlement: the Department of State Bureau of Population,Refugees and Migration (PRM); the Office of Refugee Resettlement (ORR); andthe Department of Homeland Security. PRM and ORR oversee domesticresettlement services through a diverse set of agreements between federal, stateand local government agencies, and national and local social service agencies.

In the initial reception period, which is administered by PRM, voluntaryresettlement agencies serve as the link between refugee newcomers and theestablished community. For these 90-day reception and placement services,PRM contracts with LIRS and eight other voluntary agencies along with theState of Iowa to provide placement, reception and initial resettlement services(R&P services). Approximately 300 local offices and affiliated agencies aroundthe country are involved with R&P services. As indicated by this report, themost significant amount of resources provided for this enterprise come fromfoundations, individuals, congregations, service organizations and others.

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1Office of Refugee Resettlement website (http://www.acf.hhs.gov/programs/orr/about/history.htm)

PurposeIn April 2008 the LIRS network of resettlement program directors agreed toundertake a cost analysis of the refugee resettlement services required byPRM within the Reception and Placement Program. This study was designedto establish an accurate estimate of the compulsory costs associated withreception and placement activities. The study primarily focuses on directbasic needs support provided to the refugee (from all sources) and theservice-related work performed by local resettlement staff and volunteers. Infederal fiscal year 2008 the per person funding provided by PRM was $850,half of which ($425) is set aside for the direct needs of the refugee while theother half is reserved for operational costs associated with service provision.

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MethodologyThe costing survey tool was developed and tested by an advisory committeeof LIRS affiliate directors in order to capture one specific segment of theresettlement process: the direct cost of ensuring basic needs as well asproviding orientation and case management by front line staff andvolunteers prior to refugee arrival and during the first 90 days after arrival.

1. LIRS national staff randomly selected 88 LIRS refugee resettlementcases2 that arrived between the end of February and the end of May2008. Test cases were evenly divided between family unit cases (rangingin case size from three to five members) and single refugee cases (a caseof one person).

Of the 88 cases randomly selected, affiliates submitted completedreports for 59 cases, for a study response rate of 67 percent. Of the 59completed test cases, 29 were single person arrivals and 30 were familyunit arrivals. The family case size averaged four persons. Data collectedfrom both types of cases (single and multiple-member cases) wereaggregated to gather average costs, and segregated, as indicated in thefollowing analysis, to denote differences in costs associated with cases ofvarying sizes. The average case size for the study, therefore, is 2.5 refugeesper case—just slightly higher than the LIRS average case size of 2.44 infederal fiscal year 2008. The total sampling of 59 cases represented 6.7percent of the refugees resettled by LIRS during the study period.

2. Only those cases that had completed 90 days in the United States andwere still in the initial resettlement period were validated as acceptablefor random selection. National staff confirmed that each case had notout-migrated from the original site before assigning a test case to thelocal affiliate for study completion.

3. Each case was appointed a unique identifier number for the studydistinct from LIRS or other case identification.

4. Direct service providers and supervisors reviewed cases using thecosting survey tool developed by LIRS. Hours logged in direct services

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2 A refugee “case” consists of individuals within a family unit who arrive in the United Statestogether. Cases range in size from a single individual to as many as eight to 10 or even more,depending upon the family unit size and circumstances.

(pre- and post-arrival) were assigned based upon records maintainedwithin individual case files.

5. Using localized salary structures, affiliates applied an average hourlystaff rate for employee time based on the following example:

6. Local staff assigned an average volunteer hourly rate based upon therates established by Independent Sector.3

Submitted volunteer rates were averaged in the aggregate for thepurposes of identifying a national average volunteer rate.

7. Local staff tracked time, expenditures and donations needed to complywith the cooperative agreement outlined within the Reception andPlacement (R&P) contract held between LIRS and the U.S. Departmentof State. All requirement expenditures and activities were capturedregardless of the actual funding source used to provide resettlementservices or items. Staff time was limited to the direct casework and otherdirect services provided by agency staff.

8. LIRS used federal fiscal year 2008 affiliate budgets and actualreimbursements to estimate the costs associated with direct supervisoryand management staff as a portion of the overall personnel expenses. Thisestimate was then added as an additional direct local expense proportionalto the direct staff expenses reported by case size or type of resettlement.

9. LIRS used the actual federal fiscal year 2008 reimbursement levels for alloperational costs beyond the scope of direct services. This rate was thenpro-rated by 2.0 in order to reflect most accurately and responsibly the

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Example of Hourly Rate Computation

If the average annual salary = $28,000And the average fringe benefit rate, including FICA, worker’s comp,

health insurance and other benefits = 30 percent of salaryUsing the number of working hours per year = 2,080($28,000 × 1.30)/2,080 = $17.50 per hour

3 http://www.independentsector.org/programs/research/volunteer_time.html.

direct service hours reported in the survey. Direct operating costsinclude items such as occupancy, utilities, equipment and supplies.

10. An average local indirect rate of 12 percent was calculated based uponthe actual rate of indirect recovery reported by local agencies in fiscalyear 2008 reimbursement requests. The total indirect amount was thenevenly allocated across all cases for an average per-case amount of $86.This amount was not adjusted.

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4Affiliates also reported other services provided during the same 90-day period, including theseexamples: additional post-arrival furnishings, relocation, and acculturation classes.

List of Services Used for This Study4

Pre-Arrival• forms for family reunification• identifying and securing housing• apartment setup (deposit, utilities,etc.)

• rent and utilities• household items (including donations)• food, toiletries and ready-to-eat meal• staff support of co-sponsors,anchors and volunteers

• case notes and other paperwork

Post-Arrival• airport pickup• safety orientation and apartmentbasics

• initial home visit• initial intake• resettlement plan• community orientation• Social Security application• state benefits applications• employment counseling and referral• health screening• school registration• pocket money• grocery shopping• clothes shopping• banking• public transportation orientation• English referral, registration and testing• state ID application• follow-up home visit• medical appointments• hospital emergencies• laundry assistance• mail• case notes and other paperwork• interpretation

Findings1. Federal funding accounts for 39 percent of total service and material

cost per case.The public-private partnership is heavily skewed in favor of the private

contribution. On average, the federal contribution is a mere 39 percent ofthe total resources needed to meet cooperative agreement guidelines.

Furthermore, the number of staff hours reported per refugee caseyields a staff-to-refugee ratio significantly higher than that used by PRMin estimating local staffing needs. Essentially, more staffing is requiredand actually used to carry out reception services than is assumed in theformulation of the program requirements and funding structure. Basedupon the study’s findings, the total full-time staff equivalent should beapproximately 2.5 times the staff budgeted through the PRM grants.

Thus, for the PRM grant to adequately fund this level of service, theaverage dollar amount granted would need to be $2,100 per case, whichwould average $1,500 per refugee admitted.

2. LIRS affiliates supplement PRM funding by contributing an averageof $3,228 in goods and services for each case.

Sites were asked to include activities, goods and services necessary tofulfill the R&P requirements as outlined in the cooperative agreement,regardless of the funding source. The average direct service componentcost associated with the 59 test cases was $3,862. When this amount iscombined with estimates for supervisory staffing, office operations andadministrative costs, the total average cost per case comes to over $5,000.Of this total, the only funding common to the entire affiliate network is the$850 per individual refugee provided by PRM through the R&P Program.

As mentioned previously, the study suggests that the $850 per capitagrant represents a mere 39 percent of the total resources needed to fulfill

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Average Cost per Case Studied

Pre-Arrival $1,799Post-Arrival $3,492_________________________________Total per Case $5,291

resettlement contract requirements. The study indicates that an additional30 percent is provided through volunteer hours and in-kind contributions.LIRS did not collect data on the funding sources used to cover theremaining 31 percent, but data previously collected from affiliate grantproposals beyond the scope of this study suggests that this percentagecomprises a complex combination of unrestricted contributions andfunding from other funding sources intended for post-reception services.

3. The equivalent of the $850 grant provided by the PRM R&P programis depleted prior to refugees’ arrival in the United States.

On average, one-third of the total resources dedicated to receptionservices is spent prior to the refugees’ arrival. The study demonstrates thescope of reception services that in fact begin before the refugee arrives:coordinating with relatives in the United States, recruiting volunteers,arranging basic physical support (housing, furnishings, utilities, food andclothing), and conducting community outreach and education.

The remaining two-thirds of the average total $5,291 in resourcesneeded to provide basic services and provisions are spent within the first90 days of the refugees’ new life in America (post-arrival). Post-arrivalservices include a continuation of community outreach as well as casemanagement services. Case management ensures access to public andcommunity services such as education, employment, job training, medicalcare, transportation, child care, counseling and other specialized services.

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Reception andPlacement Funding

Volunteer Hours andIn-Kind Donations

Other Sources

31%39%

30%

31%39%

30%

Distribution of Funding Sources

4. When segregated by case size the difference in cost for an individual caseversus the cost per person inmultiple-person family case is significant.

The average cost for a single-person case is $3,831, of which $3,271 isspent on direct services and goods. The average cost for multi-personcases is $6,600, of which $5,932 is spent on direct services and goods.The average cost per person within a four-member case is $1,651. Giventhe prescribed per capita formula, any economies of scale for servinglarger case sizes cannot be applied to serving single-person cases. As thetable below illustrates, for single-person cases each affiliate needs to raise,on average, 78 percent of the resources required for initial reception.

5. A comparison of refugees with and without ties in the United Statesfound that on average 70 percent more time is spent in direct serviceto refugees who arrive without family ties than is spent for refugeesjoining family members. Conversely, agencies are often able toleverage significantly more donations for refugees who arrive withoutU.S. ties, particularly for refugee families who arrive with no ties.

All refugee cases are coded by the federal government according totheir pre-existing ties to the United States: a) refugees are classified asfree cases when they have no known established ties to someone in theUnited States, b) refugees are classified geo cases when the refugee canclaim a link to a particular community because a friend or extended-family member (cousin, second cousin or the like) lives there, and c)refugees are classified as family reunification cases when they arrive torejoin close family members from whom they have been separated.

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Reception Costs by Case Size(Average Multi-Person Case Size—Four Persons)

Single-Person Multi-PersonCase Case

Local Agency Operations $2,292 $2,693Direct Cash Assistancefor Refugees $ 529 $1,794

Volunteer Hours and In-KindGoods and Services $1,124 $2,118__________________________________________________________

Total Cost per Case $3,945 $6,605

Average Cost per Individual $3,945 $1,651

Single free cases averaged $3,831 per person while single familyreunification cases only cost an average of $3,187. For the multi-memberfree cases, which averaged four persons per case, the average costsassociated with resettling the entire family unit was $6,649. For multi-member family reunification cases, the average cost associated withresettlement was $4,594, or $2,055 less than resettling a similarly sizedfree case. The average cost per person for multi-member cases was$1,662 for free cases and $1,148 for family reunification cases.

It is important to note that contributions made by family membersare particularly difficult to capture, especially in-kind services andsupport. Should these contributions be more accurately identified, thequantified contribution level for family reunification cases mightincrease substantially. It is also important to note that the value of theemotional and intangible support provided by family members isincalculable and beyond the scope of this study.

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Average Costs per Single-Person Case

Free Family ReunificationCase Case

Total Local Cost per Case $3,948 $3,187Direct Service Delivery $1,948 $1,152Direct Cash Expendedfor Refugees $ 578 $ 459

Volunteer Hours and In-KindGoods and Services $1,037 $1,247

Average Costs per Multi-Person Case(Average Case Size—Four Persons)

Free Family ReunificationCase Case

Total Local Cost per Case $7,326 $5,272Direct Staff Expenses $2,295 $1,118Direct Cash Expendedfor Refugees $1,752 $1,902

Volunteer Hours and In-KindGoods and Services $2,412 $1,431

6. The level of goods and services, as well as staff and volunteer time,required for resettlement varied according to case size and type.Further research into this aspect of the findings would prove helpful.

The study sought to capture only what services, time and goodswere actually dedicated to refugee resettlement. Therefore, the costsreported do not indicate the extent to which all the refugees’ needs wereaddressed, but the extent to which local agencies were successful inleveraging and tracking the resources invested. Many of our affiliateagencies have expressed the view that refugees would strongly benefitfrom additional services during the initial period, thereby attaining amore stable and sustainable economic situation and having greater long-term capacity to fully integrate and give back to their communities.

Furthermore, this study was completed at the beginning of thecurrent economic recession. LIRS affiliates were successful in meetingthe overall goals of the program during this period, although the strainof doing so was considerable. As the economy continues to decline, it isanticipated that the need for additional basic financial assistance andservices will increase, creating additional demands for resources.

Variations in the levels of R&P resources required to provide forsuccessful resettlement may be attributable to a number of factors, whichcould be identified through further study. However, the low level offederal support for reception services does necessitate a complex array ofadditional complementary funding from other federal, state, local andprivate sources in order to fulfill program expectations. Variations in thelevel of resources successfully secured should not be surprising.

To the extent that variations in resources reflect affiliate agencies’different approaches to service delivery, there are a number of promisingareas of inquiry that could help to determine which approaches are mostsuccessful under particular circumstances. For example, some studiessuggest that the direct involvement of volunteers in refugee resettlementincreases the likelihood of successful integration of the refugee into thecommunity at large. Questions that might derive from a more formalizedinquiry would include the following: What is the impact of the use ofvolunteers and the different types of volunteers (e.g., church andcommunity volunteers, student interns) even in the initial resettlementphase? What difference does a more formal and extensive orientation makeversus an informal, more contextual approach? More study is needed inorder to determine the extent to which the variations in support reported tous impact the effectiveness of services, how these services may improverefugees’ quality of life, and how specific approaches may make a difference.

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Recommendations1. Federal funding for refugee reception and placement services at the

local level should be significantly increased to continue to meet theoriginal intent of the Refugee Act of 1980 and to provide a solidfoundation for these services. Such funds could come from either ofthe federal agencies engaged in domestic resettlement (PRM or ORR). Amore balanced approach to the public-private partnership wouldinclude federal funding contributions at a level adequate to supportlocal affiliate agency staffing and services. Based on an estimate of theactual distribution of single-person and multi-member cases in the entireU.S. caseload, that amount in 2008 would have been $1,500 per refugeeadmitted, disregarding the variance in cost for different case sizes. Seethe recommendation regarding flexibility below.

2. Flexibility in actual expenditures per individual refugee should bereinstated in the cooperative agreement between the federal fundingagency and the voluntary agencies. Local affiliates need moreflexibility in using the limited resources more efficiently, and at the sametime local affiliates must be able to address differences in costsassociated with serving different case sizes and differences incircumstance (e.g., individual versus family cases, free versus familyreunification cases, medically needy persons).

3. A more thorough study of the domestic refugee resettlement programshould be funded to look at the impact of early interventions on thelonger term self-sufficiency and integration of refugees and their localcommunities. Such a study should be undertaken with the collaborationof all three federal agencies, the national voluntary agencies and the localprograms, and should include refugee participation.

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LimitationsLIRS recognizes that a study such as this costing report has its limitations,especially when undertaken by one of the partners in the service provision.The scope of the study is narrowly focused on capturing the time andexpense of reception and placement and does not address other questionsof quality or impact.

Refugee arrivals ebb and flow during the course of the year, and thelevel of staff time and other services may also fluctuate as local programsadjust to these changes. The cases included in this study came duringmonths with steady but not high volume of arrivals.

LIRS and its partners took every reasonable effort to minimize any biasin the collection of data, such as randomly selecting cases after the serviceperiod was complete, having different LIRS staff members select the casesand analyze the reports, and using the most conservative financialassumptions when making estimates.

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AcknowledgmentsLIRS wishes to thank those directors of our local resettlement affiliates whopromoted the study and worked so hard to design and test the survey tool:Maurine Huang, James Horan, Barbara Carr, Kay Trendell, Greg Wangerin,Jozefina Lantz, Jeff Vandenberg, Stacy Martin, Amy Marchildon, PeterVogelaar, Mary St. John and Sinisa Milovanovic.

We are also grateful to LIRS Administrative Assistant Angela Randall forher help in collecting and compiling the study results and to LIRS Directorfor Grants Finance Scott Sherman for his assistance in the financial analysisand calculations.

Lead staff at LIRS responsible for developing this report of the studyresults were Vice President for Protection Susan Krehbiel and Director forCommunity Integration Susan Gundlach, and helpful comments andeditorial suggestions were provided by Executive Vice President AnnieWilson and Vice President for Mission Advancement Stacy Martin.

For Further InformationInquiries regarding this report should be directed to Susan Krehbiel [email protected].

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700 Light Street, Baltimore, Maryland 21230410/230-2700 • www.lirs.org

Since 1939 Lutheran Immigration and Refugee Service has created welcoming communities for America’s newcomers.

LIRS resettles refugees, reunites families and rekindles dreams.

700 Light Street, Baltimore, Maryland 21230410/230-2700 • www.lirs.org

Since 1939 Lutheran Immigration and Refugee Service has created welcoming communities for America’s newcomers.

LIRS resettles refugees, reunites families and rekindles dreams.

real cost of welcome

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