How Nonprofits Can Save Themselves from the Axe

May 13, 2011; Source: Bloomberg News | In the debates over the federal budget and its impact on nonprofits, nonprofit groups have to do more than just say, “Don’t cut our programs.” Nonprofits have to be able to understand and counter, when appropriate, the various arguments about how to balance the budget and control the nation’s roaring debt – without slashing discretionary domestic spending.

One issue is about raising taxes. The defenders of Republican budget proposals such as Paul Ryan’s argue that raising taxes is a bad idea, likely to stop the nation’s economic recovery, such as it is. Republicans advocate deep cuts in federal spending rather than raising taxes.

According to a Bloomberg poll of 1,263 investors, traders, and analysts, while they don’t think President Obama and Congressional Republicans will reach a 2012 budget deal before the start of the fiscal year, by a majority of almost two to one, they believe that “the U.S. government won’t be able to substantially cut its budget deficit without raising taxes.”

Nonprofits in the budget debates have studiously avoided murmuring that a better solution might be raising taxes on the big corporations that are making record profits while the constituents of nonprofits sink into the abyss of the recession. They seem to fear being branded too far out of the mainstream, unlikely to be taken seriously if they stand up against the budget-cutting juggernaut.

The challenge for nonprofits is that they have to do more than advocate defensively; they have to do more than try to stave off cuts. They have to engage in the scrum that aims to fix the structural problems afflicting state and federal budgets. They have to talk not just about their favored programs, but about revenues and debt as well, otherwise they will be dismissed as not only just one more special interest, but one with a narrow analysis and few solutions.—Rick Cohen