The sky is falling. Again. The state budget deal approved last month contained significant budget cuts disproportionately aimed at education, health and human services, as did the recent federal budget deal that helped avert yet another government shutdown. At the county level, youth organizations are fighting for their lives in Nassau where continued funding is being tied to red light camera revenues. Suffolk County is facing a $127 million deficit that will only deepen as we head into the fall budget season. And if you think this is bad, just know that by all accounts, 2012 is going to be even uglier.
For most of Long Island’s nonprofits, this is just the latest series of body blows. Foundations with declining major gifts and lower investment returns are naturally making fewer grants. Companies don’t make corporate contributions when their revenues are in the toilet and they’re laying-off staff; only LIPA does that. For the average Long Islander struggling to pay their bills, well, charity begins at home. And at the same time, record numbers of volunteers and contributors are becoming clients looking for a helping hand from local charities instead of giving one. Requests for assistance have skyrocketed, creating the proverbial “perfect storm.”
Some charities are weathering the storm better than others, but it’s tough for even the best managed, well-established, resourceful and leanest organizations to meet the growing demand for services in this environment. That’s in part because there are more than 3,000 non-profits on Long Island. While some are quickly-incorporated non-functioning entities that never quite got up and running, at least half are going concerns whose biggest challenge these days is staying in business.
There are lots of nonprofit executive directors laying awake at night these days trying to figure out how to reduce client waiting lists, keep the lights on and make payroll. Business owners do that all the time; it goes with the territory. But there’s got to be a better way.
Nancy Lublin who runs DoSomething.org, argued in the December 2010 issue of Fast Company that charities – especially those that have achieved their missions – should have an expiration date. “For-profits go out of business all the time, for reasons good and bad, from fierce competition to poor management to an inability to adapt. Lehman Brothers. Circuit City. Linens ‘n Things. All dead!” she writes, before issuing this challenge: “Now try to name a closed nonprofit.”
Of course, the work of many organizations isn’t done. We haven’t yet conquered poverty, homelessness, hunger, addiction, youth violence, sexual assault, AIDS, or cancer and the likelihood that we’ll eradicate these plagues anytime soon is pretty nil. Maybe that says something , too.
As an alternative to just closing up shop, the non-profit world and its funders have talked about “consolidation” and “mergers” for years, especially as times have gotten tougher. We all agree it needs to happen, but it hasn’t. Merger discussions between regional nonprofits haven’t panned out for one reason or another – boards or management teams were incompatible, the programs weren’t a good mix or it “just didn’t feel right.”
Here’s the problem, though: Each of Long Island’s roughly 1,500 operational nonprofits has its own board of directors, an executive director or CEO, office rental costs and overhead expenses. Each one receives tax breaks, collects community contributions, enjoys the goodwill of volunteers and a fair amount get government grants. Each one competes with the other for charitable dollars and at the end of the day we all have less money to spend on services. Our dream of actually achieving our agency mission, solving some problems and moving on becomes ever more elusive.
But faced with yet another round of budget cuts, we hold press conferences and rallies, wave placards, give fiery speeches, launch Facebook campaigns, and encourage our clients to call, write and hound our elected officials. We use words like “draconian” and “irresponsible” to characterize proposed reductions. We threaten to close programs, turn folks away and promise to send them en masse into the offices of elected officials. Nobody particularly wants a waiting room full of homeless, hungry, disabled or sick folks, so we often get our way and win at least partial funding restorations. Until now, this well-rehearsed strategy has worked pretty well, but all of us hate doing it and it’s simply not sustainable. It’s exhausting and the need to ratchet-up the rhetoric with each proposed round of cuts undermines our credibility.
Times are going to get tougher and there’s less money to go around. Some nonprofits will not survive the recession and perhaps they shouldn’t. Digging our heels in and desperately repeating our “no cuts” mantra leaves us out of some important conversations where our intelligence and experience could help reshape the non-profit sector in a way that preserves decades worth of investments. We need to stop playing the victim and get into the game. We know which nonprofits are high performers and which ones aren’t. We know which programs work and which ones don’t. So do our clients. Government – as the largest purchaser of health and services – is beginning to figure it out, too.
The general public, though, doesn’t care. They want government to spend less so that they in turn, will pay fewer taxes and be able to support their families. They want it to happen now and they don’t care if the cuts are across-the-board, rather than strategic, surgical and well-considered. So far, most of the public pressure for change has been focused on school districts and the messages have been clear: Consolidate. Eliminate waste. Stop spending money we don’t have. Become more transparent, efficient and stop clinging to the outdated, implausible notion that any funding reductions will result in the end of civilization as we know it. The message to nonprofits, though not yet as explicit, is exactly the same.