For the past seven years, the National Center for Family Literacy in Louisville, Ky., has been teaching preschoolers and their parents to read.
While private support accounts for most of the nonprofit group’s budget, public money also has played a critical role. Each year, the center trains nearly 10,000 teachers, in part using federal money appropriated under the Adult Education Act, the Title I compensatory-education program, and the Head Start and Even Start programs, which are intended to help preschoolers and their families. And the National Diffusion Network, a federal program designed to spread effective education programs, has given the center a $200,000 grant to help states find and replicate promising family-literacy programs.
But now Sharon Darling, the center’s president, is worried that the supply of federal dollars soon might dry up.
As the 104th Congress targets social-services spending in an effort to balance the federal budget over the next seven years, Ms. Darling’s group and others like it face having less money to work with and more people to serve.
When cuts in various education and child-care programs are added up, Ms. Darling said, “pretty soon it’s not just one piece of the equation. It’s a house of cards, and they all begin to tumble.”
Peter Swords, the executive director of the Nonprofit Coordinating Committee of New York, said, “I don’t think most people are aware the extent to which government has contracted with nonprofits to provide services. From foster care to child-protective services; from day care and youth programs to senior centers; home care for the homebound, job training--the list goes on and on.”
In fact, nearly a third of nonprofit revenues come from government--federal, state, and local--primarily in the form of grants and contracts. The two other major sources of money are income generated by dues, fees, and charges for services (40 percent) and private charitable contributions (20 percent).
As a result, said Nancy Amedei, a senior lecturer at the school of social work at the University of Washington, “if you cut government, charities bleed.”
Preparing To Fight
But that will not happen without a fight, according to officials of nonprofit groups.
Over the past six months, charity leaders have stepped up lobbying efforts. Independent Sector, a Washington-based alliance of 800 nonprofit groups, has organized several gatherings in recent months to discuss the likely impact of cuts and restraints on growth in federal programs.
The group is planning a news conference in Washington this week to unveil the findings of its “100 Agencies Project,” a 200-page analysis of the impact of such spending curbs on the budgets of 100 nonprofit groups.
At an Independent Sector conference on the topic last month in Washington, nonprofit leaders seemed pessimistic about the outlook for charities.
“I’ve heard the word ‘bleak’ a lot today,” Mary Bledsoe, the director of the Y.M.C.A.'s Youth in Government program in South Carolina, said at the conference.
Many nonprofit leaders also seemed dubious about the sector’s ability to respond to an increased demand for services.
“There’s going to be cuts in the amount of welfare, so the clients the social-services groups are dealing with are going to be in much worse shape,” Mr. Swords said.
Large sections of the federal budget are either fixed or generally regarded as untouchable--such as interest on the national debt, Social Security, and defense. So other programs must bear a greater proportion of the cuts in order to reach a zero deficit by 2002, said Cindy Mann, a senior policy analyst at the Washington-based Center on Budget and Policy Priorities, a research group that analyzes government policies that affect low- and moderate-income Americans.
As a result, funding for programs that serve low-income people, which represent only 21 percent of the federal budget, were targeted for 67 percent of the cuts adopted by the House in the first 100 days of the new Congress, according to Ms. Mann.
Unfavorable Trends
Meanwhile, private charitable giving to human-services groups declined 8.8 percent last year, according to an annual report released last month. (See Education Week, May 31, 1995.)
“We understand that there needs to be some consolidation and some some streamlining, but the question is whether the budget should be balanced on the backs of vulnerable families and children,” argued Ron Field, the senior vice president for public policy at Family Service of America, a Milwaukee-based alliance of nonprofit groups that provide counseling and support services to families.
Y.M.C.A.'s are also nervous. Many use funds awarded under the Juvenile Justice and Delinquency-Prevention Act to operate a range of after-school activities, including sports programs, leadership training, and other programs for at-risk youths.
Y.M.C.A.'s also are the single largest provider of before- and after-school child care in the country, serving 250,000 school-age children and 40,000 pre~school children, according to C.J. Van Pelt, the group’s director of public policy. But cuts in federally subsidized child-care programs may mean that the organization will not be able to serve as many children.
“Our major concern is that there is an attitude that charitable organizations can pick up a lot of these functions from the government,” Mr. Field said. “And nothing could be further from the truth.”
Public funding for nonprofits has been eroding over the past decade and a half--declining by 6 percent since 1980, with the exception of increases in federal support for nonprofit hospitals and health-care providers--according to a recent study by Lester M. Salamon of John Hopkins University and Alan J. Abramson of the Urban Institute.
At the same time, they found, government spending in areas of interest to nonprofits declined considerably during this same period: In figures adjusted for inflation, spending on education, job-training, and social-services dropped by 19 percent, and spending on community and regional development declined by 50 percent--again with the exception of health care.
And charitable giving by individuals has stagnated in recent years. Although the percentage of households that give to charity has remained fairly steady, the amount they contribute, when adjusted for inflation, has dropped 23 percent since 1989.
As a result, the pressure “is going to grow for foundations and other folks to fill in the gap,” said Steve Roling, the vice president for communications at the Ewing Marion Kauffman Foundation in Kansas City, Mo. “But the message here is, even if we wanted to, we couldn’t.”
Looking for Silver Lining
But not everyone sees doom and gloom ahead.
“People tend to overlook the costs associated with federal grants and the requirements that involve some sacrifice in independence,” said Leslie Lenkowsky, the president of the Hudson Institute, an Indianapolis-based think tank. Being less dependent on government funding could be a positive development, he said, and give charities more freedom to innovate.
In addition, he suggested, there is no evidence that charitable giving is tapped out; both individual and corporate giving are likely to increase if taxes are reduced, as many Republicans in Congress hope. “It’s quite clear that when Americans have more money in their pockets, they give more money to charity,” Mr. Lenkowsky said.
Christopher W. Ullman, the press secretary for the House Budget Committee, agreed. “The contention that the private sector will not fill the void when they haven’t had to fill the void is just an assumption,” he said.
Mr. Ullman noted that with cuts to the arts and public broadcasting on the horizon, he recently increased his own regular gifts to such groups as WETA, a public-television station in Washington; the National Symphony Orchestra; and Catholic Charities.
“It would be far more admirable for these groups to step up to the plate and say, ‘We want to be a part of the solution. What can we do?’ rather than whining about why they are owed something by the taxpayers,” he said.
Others were more skeptical.
“That’s nice rhetoric, but so far the human-services groups have done much more than their share over the years to relieve government at all levels of a lot of those responsibilities,” Mr. Field said.
Nevertheless, some advocates still see bright spots in the ongoing debate.
“It may not be totally bad,” said Ms. Amedei of the University of Washington, if the current political and fiscal picture forces nonprofits to improve how they communicate with each other and with the public.
Alan Lopatin, a former Democratic Congressional staffer who now represents several nonprofit groups, agreed. “If there’s a silver lining, it’s that folks will have to be creative and collaborative,” he said. “But I’d rather do it with ample resources.”
