Red Tape Headaches


It's not unusual to hear beleaguered business owners complaining about burdensome government regulations. But homeless shelters and churches? A report by Project 21, a group dedicated to promoting entrepreneurship in African-American communities, shows regulations from all levels of government are crippling charitable organizations.

In a 1997 nationwide survey of community service organizations, 392 of 441 respondents reported problems with government. The regulatory red tape falls into two categories: regulations that apply to all organizations regardless of their missions–such as labor and environmental laws–and specific rules a group must meet before getting government funding, such as staffing requirements. The preponderance of harassment comes not from regulations meant to assure reasonable oversight of taxpayer dollars but from laws–such as prevailing wage requirements, the Americans with Disabilities Act, and stringent environmental permitting processes–that unnecessarily increase the cost of delivering services.

"Whether it's an application process for government funds that takes a hundred hours to complete, requirements that consider credentials in drug dependency counseling to be more important than a counselor's effectiveness, or a preference for metal over plastic wastebaskets, the absurdity and sheer volume of government regulations are impeding the ability of local charities to help those in need," noted the report.

The De Le Salle Academy, a New York City school for low-income, high-achieving students, complains that having to shell out $500,000 for renovations to comply with the ADA prevented it from expanding its programs. The Congress of Racial Equality discontinued its internship program after being told by the New York State Department of Employment that it must pay interns minimum wage.

Paperwork and permit requirements burdened many organizations. John D. Connelly, executive director of Jobs for Youth of Chicago, griped that the government required 37 pages of paperwork just to enroll a young person in programs funded by the Jobs Training Partnership Act–29 pages more than is required for the same person to apply for a university education. Kevin Nunn, president of the Bronx Overall Economic Development Corporation, said the city requires so many "applications forms and other tedious procedures" that it "brings its own economic development to a standstill."