State Budget Crises Threaten Nonprofits

New Report from the National Council of Nonprofits

Washington, D.C. - How are states looking to close their budget deficits? One way is by taking money away from nonprofit organizations at a time when the need for food, shelter, health care, and other community services is rising - a serious threat explained in a new report issued today by the National Council of Nonprofits.

This special report, entitled "State Budget Crises: Ripping the Safety Net Held by Nonprofits," examines the alarming condition of state budget deficits and identifies three resulting trends putting nonprofits in jeopardy - state and local governments slashing funds for programs they expect nonprofits to administer, government agencies withholding contract payments for services nonprofits have already delivered, and governments taking operating money from nonprofits through new fees and taxes.

"When governments shortchange their nonprofit partners, people lose their jobs, the economy suffers, and vulnerable citizens go without the help they need," said Tim Delaney, President & CEO of the National Council of Nonprofits. "This report serves as a call to action for community leaders at nonprofits, foundations, and governments to come together and find ways to solve some of the daunting challenges our communities face because of the state budget crises."

State and local governments in recent decades have increasingly turned to nonprofits to administer essential services, forging a public-private partnership that has served the nation well. But now an increasing number of cash-starved governments are wondering how they can generate new revenue from nonprofit organizations. The special report details some of more worrisome stories emerging across the country, explains the importance of a strong nonprofit sector, and encourages nonprofit leaders to engage in the policy process as states grapple with how to close budget gaps this year and beyond.

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The National Council of Nonprofits, the nation's largest nonprofit network with more than 22,000 member organizations across the country, advances the vital role and capacity of the nonprofit sector. The National Council works through its network of state and regional nonprofit associations to amplify the collective voice of America's nonprofit organizations, helping them manage and lead more effectively, collaborate and exchange solutions, engage in critical policy issues affecting the sector, and achieve greater impact in their communities.