State Ends SDC’s Status as County’s Community Action Agency

The state of Wisconsin is rescinding the Social Development Commission’s status as Milwaukee County’s community action agency, a move that puts the SDC’s ability to offer critical services to the community in jeopardy.

The anti-poverty agency has held that designation for over 60 years. Without the status, SDC is not eligible for key federal block grant funding for its services.

In a letter sent Friday to the SDC board, Wisconsin Department of Children and Families Secretary Jeff Pertl wrote that as of July 3, SDC’s status as Milwaukee County’s community action agency will end and that the agency will no longer be eligible for federal Community Services Block Grant funding.

“SDC has been a beloved institution in Milwaukee, positively impacting community members through a long history of programs and services,” Pertl said in a statement. As such, the decision to de-designate them as a community action agency was not taken lightly, but it is clear that we must turn the page to resume these vital services.”

The decision comes after representatives of Milwaukee County said earlier this month that they planned to move from SDC as its community action agency.

However, SDC board members had seen maintaining the community action status as a vital part of keeping the agency open and resuming social services.

“The most important thing is to make sure that Milwaukee County residents are served, and this missive from DCF ensures that they will not be served,” said William Sulton, SDC’s attorney.

Now, the SDC board can request a review with the federal government within 30 days or choose to voluntarily de-designate.

The decision

The department decided to terminate SDC’s designation because it believes SDC has not been operating anti-poverty services since it abruptly shut down in April 2024, despite reopening in December.

According to the letter, SDC has not completed its federally required audit, verified sustainable funding sources, addressed outstanding financial obligations or corrected other deficiencies the department identified.

Board members and current and former employees of SDC advocated for the agency to keep its community action status at a hearing last month.

SDC was created by state, county and city governments but functions outside of them.

Pertl acknowledged the commitment of former staff members who performed unpaid service in support of SDC’s work and the board’s desire to restore SDC in his letter.

“There is also an array of community members and leaders who contend SDC is unable to carry out its vital mission in light of the financial mismanagement, pending foreclosures, outstanding debts, eroded infrastructure and lack of urgency in finding resolution to these practical service delivery challenges,” Pertl wrote in the letter.

SDC provided a range of services to help low-income residents, such as tax support, career advancement, senior companionship and rent assistance.

What happens next?

Going forward, SDC has the option to request a review by the secretary of the Department of Health and Human Services within 30 days.

It could also voluntarily relinquish its community action status, which would allow the department and Milwaukee County to more quickly find an interim service provider to use SDC’s allocated funds for the year.

The letter noted that President Donald Trump’s administration proposed eliminating block grant funding to community action agencies in his fiscal year 2026 budget, making the program’s future uncertain.

The Department of Children and Families can now start conversations with other eligible entities, but cannot take over the funds intended for SDC until SDC’s de-designation is effective, according to Gina Paige, communications director for the department.

Sulton said the board will have to meet to determine SDC’s next actions, but he is concerned that the state, Milwaukee County and the city will choose to stop funding anti-poverty services.

“Really what this act amounts to is a withdrawing of their commitment to pursue anti-poverty programming,” he said.

Board members could not be reached for comment by deadline.

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Meredith Melland is the neighborhoods reporter for the Milwaukee Neighborhood News Service and a corps member of Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues and communities. Report for America plays no role in editorial decisions in the NNS newsroom.

This article first appeared on Milwaukee Neighborhood News Service and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.