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A “Taxing” Year Ahead for Recession-Wracked Nonprofits?

May 10, 2010

NEW YORK - If times weren't hard enough for the nonprofits that fill in the gaps of society's so-called safety net, their recession-related funding cuts may be aggravated by proposals in many states, including New York, that they be hit with new fees and taxes, as part of states' plans to balance budgets.

To Linda Leonard, whose 40-year-old Long Island Crisis Center has already had to lay off staff and halt programs, that's just short-sighted.

"It's a drop in the bucket to keep our services going, and it's cost-effective. To remove a whole safety net of services in the end will cost more, and there's going to be people suffering, people in pain."

Leonard says that just over a year ago, social service agencies in her area took cuts of 50 to 75 percent in county funding. Youth services like hers were especially hit hard, resulting in the halting of educational programs and layoffs.

"Our referrals coordinator was laid off, and our quality control person was laid off; so, cuts that you could absorb for a temporary period of time."

She and other nonprofit leaders say even if the economy were to right itself immediately next year will still be as bad a year for social service providers as 2009.

At Adelphi University, Anne Marie Thigpen directs a leadership center for non-profit execs. She says even a brightening economic forecast won't solve N-P-Os' woes in a hurry.

"What's surprising to me is that 2011 looks to be perhaps even tougher for some, particularly those organizations that rely on government contracts."

A report in March by the National Council of Nonprofits said the movement by policymakers to levy new taxes and fees would significantly burden nonprofits at a time when millions of Americans need them more than ever.

Nonprofit leaders praise the public, saying charitable donations haven't fallen as drastically as government funding has dropped.

Mark Scheerer, Public News Service - NY