Local Funding Alert: States Brace for Cuts
Washington’ s budget is still months away — but local legislators, governors, mayors, city councils/boards (etc) are preparing for potential funding cuts and fiscal crises across sectors.
What does this mean for nonprofits? Well, a lot. For example, if you are a nonprofit in New York State, you might get money through a state agency (like NYSCA) or a municipal funder (such as DCLA) or you might have funding from a local official. No matter what your situaiton is, this is a time for planning — as in Plan A, Plan B, and Plan C. At least. If Plan A assumes that state funding will hold steady, Plan B might assume a decrease to state and municipal funds, and Plan C complete eradication. If we had to guess from this vantage point, Plan B seems most likely. But Plan C seems possible.
NYCON’s CEO Megan Allen spoke recently about nonprofits who have had grants (already awarded) rescinded for projects that are well underway, as well as organizations who are so dependent on government funding that they will likely need to close their doors this year. Check out NYCON’s State of the Sector report, laying out the vast number of nonprofits in NYS, the many jobs they create and services they provide. We are looking at a cataclysmic change.
As for the State budget: We already know that New York State faces cuts of $40 million to addiction and substance abuse treatment, $27 million to mental health services, and $300 million to the Department of Health, impacting programs from virus surveillance to infection prevention in healthcare facilities, according to Gov. Kathy Hochul’s office. Meanwhile, The City reported on the fund that pays for New York City employees’ health benefits. This fund has run dry, opening up a $600 million hole in the NYC’s budget.
The deadline for the NYS budget was April 1 but it has been delayed. It is fair to say that it is very possible that we will see cuts to the New York State Council on the Arts, The New York State Council on the Humanities, the Consolidated Funding opportunities, the Department of Cultural Affairs in New York City — and many other agencies who support nonprofits throughout New York.
Meanwhile, it is worth noting that, on the federal level, Sen. Lankford (R-OK) and Rep. Harris (R-NC) reintroduced the Free Speech Fairness Act to weaken federal laws mandating that nonprofits be nonpartisan. Federal law under 501(c)(3) prohibits nonprofits from supporting or opposing candidates for public office, ensuring nonprofits are nonpartisan. This bill would permit electioneering “in the ordinary course of the organization’s regular and customary activities” if the activities do not “incur more than de minimis incremental expenses.” It is not unreasonable to expect that nonprofits who electioneer for candidates not in favor will be denied funding or worse.
The sector is under attack — not only that, many of the services we provide (education, LGBTQ+ services, immigrants services, etc.) and much of the art we celebrate, create, and present is under attack.
But we are not without power. NPQ writes, “Nonprofits can—and should—apply proven resiliency strategies to navigate an increasingly volatile environment. Recent crises have sharpened these strategies, demonstrating how nonprofits can sustain operations, innovate under pressure, and withstand existential threats. The hard-won lessons from these experiences empower nonprofits to move beyond mere survival, enabling them to fight back and emerge stronger and more resilient.” What does this entail? Well, NPQ advocates for developing social media platforms, getting the word out, doing lots of advocacy and information-sharing, protecting staff by being transparent about risk, developing flexible staffing and leadership models, preparing for disruption, joining or launching lawsuits against the administration’s punative actions, and sharing resources. The National Council on Nonprofits offers a risk-assessment checklist for nonprofits to clock how much risk they may be facing in coming months.
Whatever you are doing, do it with your eyes wide open. This is not a time to double down on business as usual or ‘stay positive’ about funding streams. This is a time for flexible, emergency-ready models that anticipate risk and disruption, plan for it, stand up to it, share the struggle with other groups, share voices that are vulnerable. This is a time to lock arms for the struggles to come and know that we may well emerge from this cynical and firghtening moment stronger than ever — but it will take some doing and some time. And it will take facing the realities before us and planning like the brilliant strategists we are.
Hang in there! Stay Strong!
