Nonprofits Remain Concerned About Uncertain Government Funding Environment

Despite the resolution of the fiscal cliff standoff between the White House and Republicans in Congress, many nonprofits still are teetering at the edge of a financial precipice, the New Jersey Record reports.

Although the higher marginal and estate tax rates for the wealthy agreed to earlier this year may benefit charities over the coming months by encouraging more giving, the decision to delay any decision on a range of scheduled spending cuts under a process known as sequestration leaves nonprofits that rely on government funding hoping for the best and expecting the worst. "Uncertainty is the watchword," said Linda Czipo, executive director of the Center for Non-Profits, the state's largest advocacy group for the nonprofit sector. "There's uncertainty as to what organizations are able to project their revenue will be."

For example, Medicaid, the joint federal-state health-insurance program for the poor and disabled, was targeted for significant cuts under the automatic spending cuts that were scheduled to go into effect on January 1 — cuts that Congress and the administration agreed to postpone for another two months. Kathy Walsh, president of the Arc of Bergen and Passaic Counties, told the Record that most observers still anticipate major cuts to the program. For organizations like The Arc and dozens of other nonprofits that serve as the backbone of the state's safety net for the developmentally disabled, a broad category that ranges from people with autism or intellectual disabilities to those suffering from cerebral palsy, planning is complicated not only by the uncertainty of the size and timing of the cuts, but also by the state's decision to revamp its system for paying nonprofits that deliver frontline services to New Jersey residents.

Indeed, many national advocates have expressed outrage at the White House and Congress's decision to kick the sequestration can down the road. "All nonprofits are going to have a hard time planning beyond the next two months," said David L. Thompson, vice president of public policy for the National Council of Nonprofits. "When government reduces direct-benefit programs, people turn to nonprofits for help. Congress isn't repealing the demand for nonprofits' services."

Harvy Lipman. "Nonprofits Still Teetering on Fiscal Cliff." Hackensack (New Jersey) Record 01/07/2013.