Bush's new budget cuts funding to nonprofits

According to economist Jared Bernstein, the United States has entered the brave new era of the "YOYO" economy–i.e., "You're On Your Own." And if President George W. Bush gets his way in the five-year budget proposal now before Congress, those at the bottom of the economic ladder may be more on their own than ever before. From senior centers to soup kitchens and housing for the homeless, millions of people have come to rely on the services provided by the nation's more than 837,000 nonprofit organizations. But a recent analysis by Alan Abramson, director of the nonprofit sector and philanthropy program at the Aspen Institute, a Washington-based think-tank, finds that Bush's 2007-2012 budget would cut federal spending on programs of interest to nonprofits, outside of the massive Medicare and Medicaid programs, by $78.6 billion after inflation. Spending on social welfare programs, such as job training and community development, would be slashed by $13.6 billion, and a total of $27.2 billion would be cut from a wide array of housing, cash and food assistance initiatives. Direct federal funding of nonprofits, excluding support of health services providers, would fall by $14.3 billion. The 1990s were a boom period for nonprofits in the United States. From 1992 to 2002, the number of charitable organizations registered with the Internal Revenue Service soared from 516,554 to 909,574–a 76 percent increase. Much of this expansion was directly due to increased levels of state and government funding. "But starting last year, we saw a changing budget scenario at the federal level," Abramson said. "There was more concern about the deficit, as well as pressure to spend on the [Iraq] war and homeland security." Abramson estimates that about 20 percent of nonprofits' resources come from private giving, including individuals, foundations and businesses, 30 percent comes from the state and federal government, while 40 to 50 percent is earned from service fees. "Federal budget cuts do have a major impact," agreed Erica Greeley, deputy director of the National Council of Nonprofit Associations, which has over 22,000 members in 45 states and Washington, DC. "There is no way that private giving can make up the difference," she told IPS. "While some nonprofits are trying earned revenues strategies that may be very innovative and entrepreneurial, their historical role is to provide services for those who can't pay for them." "If the government outsources its safety net services and looks to nonprofits, while at the same time it is cutting their budgets, there will inevitably be a segment of society that is left out," Greeley said. Since the 1980s, there has been a policy shift from funding nonprofits directly to giving money to individuals in the form of vouchers. While this offers greater choice, it also means that charities are forced to spend money wooing potential clients, and in some cases, people actually end up with fewer services. Deborah Weinstein of the Coalition on Human Needs, an alliance of civil rights, religious, labor and professional groups, said that new roadblocks are being set up that "make it harder for people to climb out of poverty and to reach stability. Besides the fact that funds are diminishing, some programs are now seeking proof of citizenship as a back door to deny services to truly eligible but low-income people–such as poor, older African Americans born in the south, not in hospitals, without birth certificates and no money to get them." "We are headed for very difficult times," Weinstein said. Bernstein's new book, All Together Now: Common Sense for a Fair Economy, puts it this way: replace the YOYO economy with a society based on the idea of "WITT–We're All In This Together."