3. Introduction
Dear Reader,
In the Lutheran Christian tradition true hospitality is positioned in the
center, not at the periphery. Thus, hospitality comes at a cost—authentic
welcome requires sacrifice and the investment of time, resources and self. As
an extension of this heritage of hospitality, Lutheran Immigration and
Refugee Service (LIRS) positions refugee resettlement and welcome at the
heart 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 in
response to a growing concern by our local partners about their capacity to
extend authentic hospitality to our nation’s refugees. With an ever-shrinking
investment from our federal partners, we fear that the capacity to engage in
real welcome has been compromised.
LIRS believes that private participation is an essential aspect of refugee
resettlement. Governments do not integrate newcomers, people do. And
refugee resettlement in the United States has been enormously successful
due in large part to the engagement of local congregations and individual
members of host communities in welcoming these newcomers. Yet we are
witnessing troubling strains on this public-private partnership due to the
growing imbalance between federal resources and expectations and the
increasing reliance upon our local partners to raise support. After many
years of slowly rising resource pressure, LIRS local resettlement agencies
report 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 to
newly 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 one
common set of services provided to all refugees resettled into the United States.
Since 1980, when the program was established, the governing
documents have expanded from a few pages in length to 79 pages at the time
of this study. The increase in contractual aspects of the program is but one
concrete illustration of the shift from the voluntary-sector-led effort of the
1950s to the government-led, highly complex, professionalized and
administration-laden program of today. While private and other
nongovernmental support continues to play an important role in the
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The Real Cost of Welcome:
4. reception and integration of refugees, the federal emphasis on delivering a
standard professional package of services and goods combined with a
funding structure that does not even keep pace with inflation has reduced the
resettlement service sector’s capacity to maintain critical aspects of the
program that engage the community and generate resources. This reduced
capacity compounds the challenge of maintaining a viable local program with
minimal federal funding, initiating a self-reinforcing trend that compromises
the long-term outcomes for refugees and weakens the voluntary sector.
Our study was limited in scope, entirely self-funded and carried out by
the staff of our local affiliate agencies. We stand by the findings but
acknowledge the limitations of our research and analysis. It is our hope that
the results that we present here will lead to a more comprehensive look at
the status of the valuable and productive public-private partnership between
the voluntary agencies engaged in refugee resettlement and the federal
government, leading to shifts in the funding structure and in a renewed
emphasis placed on the vital role of community engagement.
Sincerely,
Ralston H. Deffenbaugh, Jr.
LIRS President
www.lirs.org 3
A Financial Analysis of Local Refugee Reception
5. About Refugee Resettlement
Refugees are individuals who cannot return to their home country due to a
well-founded fear of persecution for reasons of race, religion, nationality,
membership in a particular social group or political opinion. Refugees need
both immediate protection and durable, long-term solutions. For some,
resettlement in the United States meets those needs. When refugees are
granted U.S. resettlement they are able to rebuild their lives and regain full
membership in society. The U.S. government expresses its commitment to
protect and develop durable solutions for refugees worldwide through the
refugee resettlement program.
The United States can be proud that it resettles more refugees than any
other country in the world. This commitment to formal refugee resettlement
dates from the Second World War, at which time the effort was led by
nongovernmental and international agencies. Such was the case until 1980
when the formal Refugee Act was passed.
Under the Refugee Act refugee resettlement became a U.S. federal
government program carried out in partnership with national and local
nongovernmental organizations. This public-private partnership was created
to establish national standards for refugee services and to provide critical
resources for their successful integration.1
Three agencies within the federal government currently manage distinct
aspects of refugee resettlement: the Department of State Bureau of Population,
Refugees and Migration (PRM); the Office of Refugee Resettlement (ORR); and
the Department of Homeland Security. PRM and ORR oversee domestic
resettlement services through a diverse set of agreements between federal, state
and local government agencies, and national and local social service agencies.
In the initial reception period, which is administered by PRM, voluntary
resettlement agencies serve as the link between refugee newcomers and the
established community. For these 90-day reception and placement services,
PRM contracts with LIRS and eight other voluntary agencies along with the
State of Iowa to provide placement, reception and initial resettlement services
(R&P services). Approximately 300 local offices and affiliated agencies around
the country are involved with R&P services. As indicated by this report, the
most significant amount of resources provided for this enterprise come from
foundations, individuals, congregations, service organizations and others.
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The Real Cost of Welcome:
1
Office of Refugee Resettlement website (http://www.acf.hhs.gov/programs/orr/about/history.htm)
6. Purpose
In April 2008 the LIRS network of resettlement program directors agreed to
undertake a cost analysis of the refugee resettlement services required by
PRM within the Reception and Placement Program. This study was designed
to establish an accurate estimate of the compulsory costs associated with
reception and placement activities. The study primarily focuses on direct
basic needs support provided to the refugee (from all sources) and the
service-related work performed by local resettlement staff and volunteers. In
federal 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 the
other half is reserved for operational costs associated with service provision.
www.lirs.org 5
A Financial Analysis of Local Refugee Reception
7. Methodology
The costing survey tool was developed and tested by an advisory committee
of LIRS affiliate directors in order to capture one specific segment of the
resettlement process: the direct cost of ensuring basic needs as well as
providing orientation and case management by front line staff and
volunteers prior to refugee arrival and during the first 90 days after arrival.
1. LIRS national staff randomly selected 88 LIRS refugee resettlement
cases2
that arrived between the end of February and the end of May
2008. Test cases were evenly divided between family unit cases (ranging
in case size from three to five members) and single refugee cases (a case
of one person).
Of the 88 cases randomly selected, affiliates submitted completed
reports for 59 cases, for a study response rate of 67 percent. Of the 59
completed test cases, 29 were single person arrivals and 30 were family
unit arrivals. The family case size averaged four persons. Data collected
from both types of cases (single and multiple-member cases) were
aggregated to gather average costs, and segregated, as indicated in the
following analysis, to denote differences in costs associated with cases of
varying sizes. The average case size for the study, therefore, is 2.5 refugees
per case—just slightly higher than the LIRS average case size of 2.44 in
federal fiscal year 2008. The total sampling of 59 cases represented 6.7
percent of the refugees resettled by LIRS during the study period.
2. Only those cases that had completed 90 days in the United States and
were still in the initial resettlement period were validated as acceptable
for random selection. National staff confirmed that each case had not
out-migrated from the original site before assigning a test case to the
local affiliate for study completion.
3. Each case was appointed a unique identifier number for the study
distinct from LIRS or other case identification.
4. Direct service providers and supervisors reviewed cases using the
costing survey tool developed by LIRS. Hours logged in direct services
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The Real Cost of Welcome:
2
A refugee “case” consists of individuals within a family unit who arrive in the United States
together. 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.
8. (pre- and post-arrival) were assigned based upon records maintained
within individual case files.
5. Using localized salary structures, affiliates applied an average hourly
staff rate for employee time based on the following example:
6. Local staff assigned an average volunteer hourly rate based upon the
rates established by Independent Sector.3
Submitted volunteer rates were averaged in the aggregate for the
purposes of identifying a national average volunteer rate.
7. Local staff tracked time, expenditures and donations needed to comply
with the cooperative agreement outlined within the Reception and
Placement (R&P) contract held between LIRS and the U.S. Department
of State. All requirement expenditures and activities were captured
regardless of the actual funding source used to provide resettlement
services or items. Staff time was limited to the direct casework and other
direct services provided by agency staff.
8. LIRS used federal fiscal year 2008 affiliate budgets and actual
reimbursements to estimate the costs associated with direct supervisory
and management staff as a portion of the overall personnel expenses. This
estimate was then added as an additional direct local expense proportional
to the direct staff expenses reported by case size or type of resettlement.
9. LIRS used the actual federal fiscal year 2008 reimbursement levels for all
operational costs beyond the scope of direct services. This rate was then
pro-rated by 2.0 in order to reflect most accurately and responsibly the
www.lirs.org 7
A Financial Analysis of Local Refugee Reception
Example of Hourly Rate Computation
If the average annual salary = $28,000
And the average fringe benefit rate, including FICA, worker’s comp,
health insurance and other benefits = 30 percent of salary
Using 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.
9. direct service hours reported in the survey. Direct operating costs
include items such as occupancy, utilities, equipment and supplies.
10. An average local indirect rate of 12 percent was calculated based upon
the actual rate of indirect recovery reported by local agencies in fiscal
year 2008 reimbursement requests. The total indirect amount was then
evenly allocated across all cases for an average per-case amount of $86.
This amount was not adjusted.
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The Real Cost of Welcome:
4
Affiliates also reported other services provided during the same 90-day period, including these
examples: 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 apartment
basics
• 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
10. Findings
1. 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 of
the total resources needed to meet cooperative agreement guidelines.
Furthermore, the number of staff hours reported per refugee case
yields a staff-to-refugee ratio significantly higher than that used by PRM
in estimating local staffing needs. Essentially, more staffing is required
and actually used to carry out reception services than is assumed in the
formulation of the program requirements and funding structure. Based
upon the study’s findings, the total full-time staff equivalent should be
approximately 2.5 times the staff budgeted through the PRM grants.
Thus, for the PRM grant to adequately fund this level of service, the
average dollar amount granted would need to be $2,100 per case, which
would average $1,500 per refugee admitted.
2. LIRS affiliates supplement PRM funding by contributing an average
of $3,228 in goods and services for each case.
Sites were asked to include activities, goods and services necessary to
fulfill the R&P requirements as outlined in the cooperative agreement,
regardless of the funding source. The average direct service component
cost associated with the 59 test cases was $3,862. When this amount is
combined with estimates for supervisory staffing, office operations and
administrative 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 capita
grant represents a mere 39 percent of the total resources needed to fulfill
www.lirs.org 9
A Financial Analysis of Local Refugee Reception
Average Cost per Case Studied
Pre-Arrival $1,799
Post-Arrival $3,492
_________________________________
Total per Case $5,291
11. resettlement contract requirements. The study indicates that an additional
30 percent is provided through volunteer hours and in-kind contributions.
LIRS did not collect data on the funding sources used to cover the
remaining 31 percent, but data previously collected from affiliate grant
proposals beyond the scope of this study suggests that this percentage
comprises a complex combination of unrestricted contributions and
funding from other funding sources intended for post-reception services.
3. The equivalent of the $850 grant provided by the PRM R&P program
is depleted prior to refugees’ arrival in the United States.
On average, one-third of the total resources dedicated to reception
services is spent prior to the refugees’ arrival. The study demonstrates the
scope 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 and
clothing), and conducting community outreach and education.
The remaining two-thirds of the average total $5,291 in resources
needed to provide basic services and provisions are spent within the first
90 days of the refugees’ new life in America (post-arrival). Post-arrival
services include a continuation of community outreach as well as case
management services. Case management ensures access to public and
community services such as education, employment, job training, medical
care, transportation, child care, counseling and other specialized services.
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The Real Cost of Welcome:
Reception and
Placement Funding
Volunteer Hours and
In-Kind Donations
Other Sources
31%
39%
30%
31%
39%
30%
Distribution of Funding Sources
12. 4. When segregated by case size the difference in cost for an individual case
versus the cost per person in multiple-person family case is significant.
The average cost for a single-person case is $3,831, of which $3,271 is
spent on direct services and goods. The average cost for multi-person
cases 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. Given
the prescribed per capita formula, any economies of scale for serving
larger case sizes cannot be applied to serving single-person cases. As the
table 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 States
found that on average 70 percent more time is spent in direct service
to refugees who arrive without family ties than is spent for refugees
joining family members. Conversely, agencies are often able to
leverage significantly more donations for refugees who arrive without
U.S. ties, particularly for refugee families who arrive with no ties.
All refugee cases are coded by the federal government according to
their pre-existing ties to the United States: a) refugees are classified as
free cases when they have no known established ties to someone in the
United States, b) refugees are classified geo cases when the refugee can
claim 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 to
rejoin close family members from whom they have been separated.
www.lirs.org 11
A Financial Analysis of Local Refugee Reception
Reception Costs by Case Size
(Average Multi-Person Case Size—Four Persons)
Single-Person Multi-Person
Case Case
Local Agency Operations $2,292 $2,693
Direct Cash Assistance
for Refugees $ 529 $1,794
Volunteer Hours and In-Kind
Goods and Services $1,124 $2,118
__________________________________________________________
Total Cost per Case $3,945 $6,605
Average Cost per Individual $3,945 $1,651
13. Single free cases averaged $3,831 per person while single family
reunification cases only cost an average of $3,187. For the multi-member
free cases, which averaged four persons per case, the average costs
associated with resettling the entire family unit was $6,649. For multi-
member family reunification cases, the average cost associated with
resettlement was $4,594, or $2,055 less than resettling a similarly sized
free 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 members
are particularly difficult to capture, especially in-kind services and
support. Should these contributions be more accurately identified, the
quantified contribution level for family reunification cases might
increase substantially. It is also important to note that the value of the
emotional and intangible support provided by family members is
incalculable and beyond the scope of this study.
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The Real Cost of Welcome:
Average Costs per Single-Person Case
Free Family Reunification
Case Case
Total Local Cost per Case $3,948 $3,187
Direct Service Delivery $1,948 $1,152
Direct Cash Expended
for Refugees $ 578 $ 459
Volunteer Hours and In-Kind
Goods and Services $1,037 $1,247
Average Costs per Multi-Person Case
(Average Case Size—Four Persons)
Free Family Reunification
Case Case
Total Local Cost per Case $7,326 $5,272
Direct Staff Expenses $2,295 $1,118
Direct Cash Expended
for Refugees $1,752 $1,902
Volunteer Hours and In-Kind
Goods and Services $2,412 $1,431
14. 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 goods
were actually dedicated to refugee resettlement. Therefore, the costs
reported do not indicate the extent to which all the refugees’ needs were
addressed, but the extent to which local agencies were successful in
leveraging and tracking the resources invested. Many of our affiliate
agencies have expressed the view that refugees would strongly benefit
from additional services during the initial period, thereby attaining a
more 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 the
current economic recession. LIRS affiliates were successful in meeting
the overall goals of the program during this period, although the strain
of doing so was considerable. As the economy continues to decline, it is
anticipated that the need for additional basic financial assistance and
services will increase, creating additional demands for resources.
Variations in the levels of R&P resources required to provide for
successful resettlement may be attributable to a number of factors, which
could be identified through further study. However, the low level of
federal support for reception services does necessitate a complex array of
additional complementary funding from other federal, state, local and
private sources in order to fulfill program expectations. Variations in the
level 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 promising
areas of inquiry that could help to determine which approaches are most
successful under particular circumstances. For example, some studies
suggest that the direct involvement of volunteers in refugee resettlement
increases the likelihood of successful integration of the refugee into the
community at large. Questions that might derive from a more formalized
inquiry would include the following: What is the impact of the use of
volunteers and the different types of volunteers (e.g., church and
community volunteers, student interns) even in the initial resettlement
phase? What difference does a more formal and extensive orientation make
versus an informal, more contextual approach? More study is needed in
order to determine the extent to which the variations in support reported to
us impact the effectiveness of services, how these services may improve
refugees’ quality of life, and how specific approaches may make a difference.
www.lirs.org 13
A Financial Analysis of Local Refugee Reception
15. Recommendations
1. Federal funding for refugee reception and placement services at the
local level should be significantly increased to continue to meet the
original intent of the Refugee Act of 1980 and to provide a solid
foundation for these services. Such funds could come from either of
the federal agencies engaged in domestic resettlement (PRM or ORR). A
more balanced approach to the public-private partnership would
include federal funding contributions at a level adequate to support
local affiliate agency staffing and services. Based on an estimate of the
actual distribution of single-person and multi-member cases in the entire
U.S. caseload, that amount in 2008 would have been $1,500 per refugee
admitted, disregarding the variance in cost for different case sizes. See
the recommendation regarding flexibility below.
2. Flexibility in actual expenditures per individual refugee should be
reinstated in the cooperative agreement between the federal funding
agency and the voluntary agencies. Local affiliates need more
flexibility in using the limited resources more efficiently, and at the same
time local affiliates must be able to address differences in costs
associated with serving different case sizes and differences in
circumstance (e.g., individual versus family cases, free versus family
reunification cases, medically needy persons).
3. A more thorough study of the domestic refugee resettlement program
should be funded to look at the impact of early interventions on the
longer term self-sufficiency and integration of refugees and their local
communities. Such a study should be undertaken with the collaboration
of all three federal agencies, the national voluntary agencies and the local
programs, and should include refugee participation.
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The Real Cost of Welcome:
16. Limitations
LIRS 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 and
expense of reception and placement and does not address other questions
of quality or impact.
Refugee arrivals ebb and flow during the course of the year, and the
level of staff time and other services may also fluctuate as local programs
adjust to these changes. The cases included in this study came during
months with steady but not high volume of arrivals.
LIRS and its partners took every reasonable effort to minimize any bias
in the collection of data, such as randomly selecting cases after the service
period was complete, having different LIRS staff members select the cases
and analyze the reports, and using the most conservative financial
assumptions when making estimates.
www.lirs.org 15
A Financial Analysis of Local Refugee Reception
17. Acknowledgments
LIRS wishes to thank those directors of our local resettlement affiliates who
promoted 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, Peter
Vogelaar, Mary St. John and Sinisa Milovanovic.
We are also grateful to LIRS Administrative Assistant Angela Randall for
her help in collecting and compiling the study results and to LIRS Director
for Grants Finance Scott Sherman for his assistance in the financial analysis
and calculations.
Lead staff at LIRS responsible for developing this report of the study
results were Vice President for Protection Susan Krehbiel and Director for
Community Integration Susan Gundlach, and helpful comments and
editorial suggestions were provided by Executive Vice President Annie
Wilson and Vice President for Mission Advancement Stacy Martin.
For Further Information
Inquiries regarding this report should be directed to Susan Krehbiel at
lirs@lirs.org.
16
18. 700 Light Street, Baltimore, Maryland 21230
410/230-2700 • 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 21230
410/230-2700 • 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.
