How Nonprofits Can Save Themselves from the Axe

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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

  • Gen Fujioka

    Agreed that nonprofits need to address the structural causes of the present budget crises and the need for more revenues. But aside from fear, nonprofits that developed a media and public profile for delivering services are reluctant to talk about subjects that are beyond their expertise. HOW do nonprofits meaningfully weigh in on this topic? Do we become junior tax policy experts? And if nonprofits shift to engage on the level of the ideological debates, at what point do we lose our credibility to speak from experience and direct knowledge?

  • john ford

    This issue is complicated both by the lack of knowledge and experience of non profits in understanding of the technicalities of state and federal economics but also by the makeup of Boards of Directors, often a group representing many interests that mght oppose their favorite “charity” moving outside its domain.

  • rick cohen

    Perhaps the answers to both Gen’s and John’s questions are answered not in the activities of individual, local nonprofits, but nonprofit associations, state associations, national nonprofit organizations. The nonprofit sector has to recognize and realize its power in numbers–its advocacy power and its analytical power.

  • John Pratt

    Another problem nonprofits face is that much of the public is unaware of the role of government funding in their ability to deliver services. While most of the revenues for Salvation Army and Catholic Charities come from government, these and many other organizations are seen as an efficient and hard working alternative to government funding of social services. There is a reluctance to publicize government funding because it might diminish private giving. A similar reluctance to publicly support raising revenues as part of a budget solution is also due in part to worry about adverse effects on an organizations private contributions, and loss of support by legislators that oppose tax increases.