November 2, 2016; Jackson Hole News & Guide (Jackson, WY)
It’s seldom easy to balance the budget at a nonprofit organization, but a report by a network of Wyoming nonprofits outlines the stresses caused by budget deficit–related state cutbacks and new federal regulations.
There are about 3,000 public charities and 301 private foundations in the state, according to the Wyoming Nonprofit Network, with 95 percent having annual budgets under $1 million. Especially for these modest-sized nonprofits, any change in revenue and cash flow can tilt the sustainability equation significantly. For example, the Teton Literacy Center’s budget was cut by one-third, or $210,000 in February. Network managing director Jody Shields said, “It will be interesting to continue forward and see how nonprofits are being impacted with the down economy. Funding is being decreased and nonprofits are already lean.”
Budget pressure is also coming from the upcoming implementation of new income thresholds for identifying salaried and hourly workers, often referred to as the new overtime rules. As NPQ has reported, about 4 million U.S. workers will be affected by the new rules requiring overtime be paid to most employees (there are a few exceptions) making less than $47,500 a year. Shields notes that budget-limited nonprofits will have to be careful affected employees not only limit themselves to 40 hours of work a week, but also monitor whether and how employees volunteer for their organization. Volunteering is also considered to be work, unless the volunteering is truly voluntary as well as unrelated to their job function.
NPQ supports the fair and reasonable treatment of nonprofit sector employees, including the new overtime regulations. However, we acknowledge that the regulations, especially when combined with other budget pressures like the inability or refusal of state government to increase support for nonprofit missions, will place stress on many nonprofit organizations. This is especially true for smaller nonprofits with less built-in capacity to increase existing or activate alternative funding streams. The Wyoming Nonprofit Network is holding workshops for nonprofits on how to navigate the new regulations. It sounds like conducting workshops on capacity building in general, and establishing or strengthening fundraising programs in particular, would also be especially relevant to Wyoming’s charitable sector.—Michael Wyland