Government Cutbacks Leave Faith-Based Services Hurting
In a survey of 50 Catholic Charities affiliates nationwide, about half have experienced cutbacks or unpaid state contracts. The problem appears slightly better locally, but not by much, because state and local governments are finalizing budgets. A survey by the Maryland Association of Nonprofit Organizations found that at least one-third of its members experienced a reduction in state funding or anticipate a reduction.
Not long ago, Montgomery County Executive Isiah Leggett (D) met with local nonprofit social service agencies, including a number of faith-based organizations, to warn them to expect significant cuts. "Government's ability and the ability of nonprofits [to respond] becomes more challenging when there is a greater need," Leggett said. "And that's the real irony of what we face."
In normal times, nonprofits can tap into bank credit lines to cover lags in payment. But faced with swelling late payments, many organizations have hit their maximum or struggling banks have cut their lines of credit.
Independent Sector, a coalition of charitable groups that represents nonprofits, estimates that at least $15 billion — 18 percent of all government funding to nonprofit human service providers — is delayed or will be delayed if the problem is not addressed.
Nonprofits unsuccessfully lobbied for a $15 billion bridge loan package for human services nonprofits, administered by the federal government, to be included in the fiscal stimulus package.
The charities say the cutbacks will only boomerang on the states. When California slashed more than $300,000 from a contract with Jewish Family Service of Los Angeles, it had to cut 70 slots from a program that kept poor elderly people out of nursing homes by providing them with services in their homes.
"Unless their families had some alternative," said Chief Executive Paul Castro, "they undoubtedly ended up in a nursing home," potentially costing California taxpayers even more money.