Funding nonprofits is essential, necessary — and they should not be cut

Connecticut’s community nonprofits are in a precarious state. Year after year of tight state budgets have put increasing pressure on providers, leaving them to face an uncertain future at a time when the demand for essential services is increasing.

With the prediction of at least three more years of budget crisis, there is little good news on the fiscal horizon. Nonprofits in Connecticut – providers of services including supports for people with developmental disabilities, mental health and substance abuse treatment, domestic violence shelters, prison re-entry supports, cultural programs and much more — a face a laundry list of challenges:

First, the need for nonprofit services is increasing. In a recent survey conducted by the    Alliance, every respondent said that the need for services has increased in the past five years, and half said it’s increased by more than 15 percent.

Second, funding reductions mean the capacity of community nonprofits to meet those needs is down. Over half of the respondents to our survey say that in just the past year they have had to lay off staff. Nonprofits have also reduced programs and cut staff hours.

This is not just an issue for the organizations. For those in need of services it means increased caseloads, fewer direct care personnel, longer waiting times and fewer people served.

Third, in fiscal year 2018 over half of the state budget is considered “fixed costs,” which are deemed not subject to cuts. That percentage grows each year, and funding for nonprofits is in whatever remains.

Fixed costs are growing as huge budget shortfalls are looming. That means funding for community nonprofits is part of a shrinking piece of a diminishing pie.

Fourth, a new challenge: federal tax reform may discourage charitable giving by eliminating the ability of most tax filers to itemize and deduct charitable contributions.

On top of all that, there are public officials who think governments should be taxing nonprofits, taking away some of the precious resources they have.

Increased need and less revenue combine to be a perfect storm for people who depend on nonprofits.

Nonprofits can’t raise taxes or charge clients, they can only reduce services, lay off employees or close programs. This is a model for a social safety net that cannot sustain itself – and it puts Connecticut’s quality of life at risk.

Continuing to cut projects offered by nonprofits leads to a Connecticut that:

•  cannot provide for people with intellectual/developmental disabilities,
•  fails to serve people in need of mental health and addiction treatment,
• falls short on food and shelter for those with emergency needs,
• sends formerly incarcerated people back into the community without support, and
• lacks the arts and culture which attract people and help us compete for business investment, which is necessary if we are to meet needs in the future.

This is not the Connecticut I want, and I think it is likely not the Connecticut anybody wants.

We ask state and local officials to stand with us and say that state funding of nonprofits is essential and necessary. It is time that nonprofits be treated in the same manner as fixed costs. They should be off the table when budget cuts are discussed.

Gian-Carl Casa is President & CEO of the Connecticut Community Nonprofit Alliance.