Gov’t Services To Nonprofits Have Worsened

November 3, 2008       Mark Hrywna      

Barely 1 in 10 nonprofits believe that government policies toward nonprofits have generally improved over the past two years, according to a new study. They believe that the next administration should devote more attention to poverty and establish a universal health insurance system.

“Nonprofit Policies for the New Administration” is based on The Johns Hopkins Nonprofit Listening Post Project by the Center for Civil Society Studies Institute for Policy Studies, which surveyed more than 1,000 nonprofit leaders around the county.

Only 12 percent of respondents said that government policies toward nonprofits in have generally improved during the past two years. Less than a third agreed that the next administration should further expand support to faith-based nonprofits.

Almost half of nonprofits surveyed agreed, and another third strongly agreed, that energy prices are negatively affecting the ability to deliver programs and services. Three out of four executives agreed or strongly agreed that some type of public or community service should be required of all American youth as a condition of getting government-sponsored or guaranteed college aid.

Though the Listening Post Project survey does not include higher education or hospitals, it can provide timely feedback on pressing issues, said Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins. “We felt this would be a useful way to give nonprofits a voice in this political process, something that’s been lacking in previous events of this sort,” he said.

The survey results demonstrate just how much federal policy and budget decisions impact on the health and vitality of nonprofits, said Peter Goldberg, chair of the Advisory Committee of the Listening Post Project and president and chief executive officer of Alliance for Children and Families. More than ever before, it seems clear that budget and policy decisions impact different fields of nonprofits, he said.

As a result of privatization during the past two decades, child and family services nonprofits deliver more services under government contracts, becoming public sector contractors, Goldberg said. The federal government treats contracts in human services very differently from contracts for federal defense or highway spending, with nonprofits in many cases subsidizing the delivery of public sector services, he added. “It’s clear that when comes to contracting, we treat pavement differently than we treat people,” Goldberg said.

Nonprofits also cited as major priorities of the next administration more federal dollars for their fields, expanding tax incentives for charitable giving, support for training and capacity building, and reforming Medicare and Medicaid reimbursement.

Almost 80 percent of respondents in the survey said reinstatement and expansion of tax incentives for individual charitable giving would be “extremely useful,” with another 17 percent saying it would be “somewhat useful.” Restoration of the estate tax specifically garnered a 52 percent “extremely useful” response and 29 percent “somewhat” for a total 81 percent.

Only about half of respondents said that a special legal category for “hybrid” organizations, such as social enterprises, would be extremely or somewhat useful, the lowest of any of response.

While no one priority emerged with more than 20 percent of responses as the number one priority, it was clearer when nonprofit executives ranked their top priorities:

  • Restoration and/or growth of funds for organization’s field in the federal budget (44 percent);
  • Reinstatement and expansion of tax incentives for individual charitable giving (38 percent); * Federal grant support for nonprofit training and capacity (29 percent); and,
  • Reform of reimbursements under Medicare, Medicaid and other federal programs to cover provider costs (28 percent).

Responses varied depending on the size of the nonprofit but also by the type of organization. Improved tax incentives had particular support from arts organizations but also were among the top three priorities from five of the six categories.

While reinstating and expanding tax incentives for individual charitable giving was a priority among organizations of all sizes, small nonprofits (less than $500,000), also cited federal support for nonprofit training and capacity building as well as special health insurance tax credits for nonprofit workers. Meanwhile, large organizations ($3 million-plus) seek reform reimbursements under federal voucher programs to cover provider costs.

The economic bust for the past several months presents enormous implications for nonprofits, said Salamon, and while the federal government is bailing out banks, there’s no talk about having the nonprofit infrastructure in place to be able to help those who encounter economic distress. One of the objectives of project, said Salamon, is to get a sense of the minds in the organizations that will be called on to absorb enormous demands and they’re going to need help to do that.

The survey was conducted in early September, before the federal rescue plan for the nation’s banks was approved and historic declines in the stock market. The survey already was signaling concerns, Salamon said, and if it had been done later might have been even more striking.

“We’re just trying to call some attention and sensitivity to policy makers about how their decisions will play out among the vast scope of nonprofit institutions in this country,” Goldberg said.

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This article is from NPT Weekly, a publication of The NonProfit Times.

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