How can the White House Council of Economic Advisers (CEA) totally overlook more than 10% of the American workforce?

A recent CEA report regarding the economic impacts of health care reform on small businesses completely disregards the 15 million people employed by nonprofits (in 2008, according to DHHS [PDF]) and an entire sector that accounts for 11-12% of the nation’s GDP (in 2007, according to GAO [PDF]).

So when participating in a conference call on July 28 to hear the Chair of the CEA present the report’s findings, we were not surprised at her silence about the impact on nonprofit employers. Dr. Christina Romer talked about the importance of small (for-profit) businesses and noted that the Administration’s proposed tax credits for small (for-profit) businesses would help protect those small (for-profit) businesses. But during her presentation she made no reference at all to nonprofits.

During the question portion of the call, Dr. Romer was asked whether the Administration had plans to help not only small for-profit businesses, but also “small employers” including specifically tax-exempt nonprofits, for which tax credits provide absolutely no relief.

We all basically heard her essentially reply to this effect: Excellent question, one we never thought about. We’ll find out whether the Administration has considered addressing the needs of nonprofits as small employers and get back to you.

How could the otherwise brilliant people at the CEA have such a giant blind spot regarding nonprofits, especially given their own deep professional roots in nonprofits? For example, the CEA members earned degrees at Harvard, MIT, and Yale, taught as tenured faculty at Princeton and the University of Chicago, worked for the National Bureau of Economic Research, received Alfred P. Sloan Research Fellowships, Fulbright Scholarship, and John Simon Guggenheim Memorial Foundation Fellowships, and served as officers, fellows, economists, and members of numerous other nonprofits, including the American Academy of Arts and Sciences, the American Bar Foundation, the American Economic Association, and the MacArthur Foundation. Did the CEA overlook nonprofits as small employers because it assumed that all nonprofits are large institutional nonprofits with revenue greater than $10 million a year – that actually comprise less than 1.4% of all nonprofits?

Or is the CEA simply unaware that the vast majority of America’s nonprofits – the 93.3% with income less than $1 million a year – are small community-based nonprofits focused on meeting local needs? The CEA might have ignored small nonprofits, but those community-based nonprofits don’t have the luxury of ignoring how escalating health care costs are eating away at their ability to provide valued benefits to Americans everyday, including:

  • Entering the World: community hospitals, health clinics, home health aides
  • Nurturing the Young: after-school care, youth development programs
  • Lifelong Learning: nonprofit preschools and kindergartens to elementary through post-secondary
  • Feeding the Body: food banks, meals on wheels, soup kitchens
  • Fueling the Mind: arts and culture, public radio, literacy groups, libraries
  • Earning a Living: workforce development, credit counseling, child care
  • Healing the Body: blood banks, clinics, substance abuse centers, disease eradication
  • Protecting the Body: domestic violence centers, elder care, public health campaigns
  • Sheltering the Body: homeless shelters, affordable housing developers, assisted living
  • Exercising the Body: youth sports, summer camps, sports clubs
  • Nurturing the Spirit: places of worship, service organizations, volunteer centers
  • Departing the World: hospices, organ donation organizations

Let’s not pin the blame on the CEA, however. Theirs was just one report. How is it that others in the Administration and on Capitol Hill also have not thought about and left America’s nonprofits out of the equation when forging solutions to the rising costs of health care insurance for small employers—especially when small nonprofits are no less challenged than for-profit businesses in ensuring adequate health care coverage for their employees? Why?

Although it’s tempting to say policymakers just don’t care, or that nonprofits don’t make political contributions, or countless other excuses, in truth they ignored nonprofits because we let them. Nonprofits don’t speak up about policies and issues that clearly impact us and the communities we serve. Our sector tends to be overly polite, wanting policymakers to simply invite us to the policy table because we do good work. And too often we self-censor what needs to be said in fear of retribution for speaking the truth.

Our communities’ needs are too great for us to continue sitting quietly on the sidelines. Nonprofits know that we face the same rising health insurance premiums as for-profit businesses. And we know that the math just doesn’t work: government cannot expect us to continue delivering more services to those in need while we also incur higher operating costs and receive declining revenues in this wicked economy.

But we shouldn’t expect government officials to know through osmosis alone that the economic threats to nonprofits and the communities we serve are real and dire. Such an expectation is unrealistic and will only lead to more situations like the CEA’s myopic take on health care reform: government officials overlooking us, ignoring us, disregarding us, forgetting us, taking us for granted. Moreover, as a recent special report [PDF] by the National Council of Nonprofits warns, such an expectation on our part is both unfair and unsafe to those depending on services we deliver and benefits we provide.

Now is the time for nonprofits to remind government that we exist, and we exist at a scale that should not and cannot be ignored any longer. To be effective in leveraging the full resources of the community to solve the social ills we work on, nonprofits must speak up and insert ourselves in public policy deliberations.

Pick up a drum and start beating it loudly so policymakers recognize America’s hidden-in-plain-sight nonprofit sector. Importantly, we shouldn’t beat the drum just in frustration that we’ve been ignored. Instead, we must beat it for a purpose, to tell a story. Tell the story about how nonprofits add real value to local communities and individual lives.

Let government officials know that nonprofits deserve recognition and respect. And then pull up your seat to the policymaking table. You have a constitutional right and a moral duty to be heard.

Let the drumbeat begin.