What Pennsylvania’s New Budget Means for Your Nonprofit

Welcome to Pennsylvania Nonprofit Law Blog!  We hope that this blog will serve as a resource that nonprofit organizations can use to become informed about the legal and financial issues that affect their daily operations.

We’re glad you found us, and we hope you will keep checking back for more updates!

The purpose of this, our first post, is to highlight some of the impacts the recent state budget might have for your organization and to offer some suggestions and strategies that you can use to weather this time of reduced government support.

Government support is drying up

After a grueling 101-day impasse during which a dieting Governor Ed Rendell was able to lose 50 pounds, the Pennsylvania Legislature has finally approved its budget for the 2009-10 fiscal year.  The new budget, which contains extensive cuts in a number of areas, was signed into law by Gov. Rendell on October 9.

Although the new budget was certainly a relief for many organizations who had long been waiting for much-needed funding, there is no hiding the fact that there is a lot less money to go around.   Given the $3 billion shortfall state lawmakers were facing, it’s no surprise that the recently-approved budget contains numerous cuts.  Unfortunately, many of these cuts hit close to home for the nonprofit community.

According to a statement on the Pennsylvania Association of Nonprofit Organizations (PANO) website: “Thousands of nonprofits servicing state and county contracts and grants laid-off staff, cut services or closed their doors.  Children, the elderly and people with special needs lost vital services, and precious time.  Nonprofits must still receive payment from the state or counties, restore their infrastructure, pay back their loans – with interest, and rebuild shattered lives.”

Here are a few specific examples of cuts that may have an impact on the nonprofit community:

The Arts: The Pennsylvania Council on the Arts, which saw its funding decrease by 20.32%     under the new budget, has recently announced that the 2009 Governor’s Awards for the Arts is being postponed until the spring of 2010.

Economic Development: The new budget cuts all funding to Community Revitalization and Urban Development, meaning that these two budget items that received appropriations of $39,550,000 and $18,750,000, respectively during the last fiscal year, are now receiving $0.

Health Care: Under the new budget, funding to Health items decreased from $273 million to roughly $240 million, a decrease of 12.10%.  Some specific areas among the hardest hit were: Organ Donation Awareness (51.46% decrease), Cancer Control Programs (56.72% decrease), and Burn Foundation (52.06% decrease).

How to make less equal more

With this ominous cloud of reduced government support hanging overhead, it may be hard to believe that there is a silver lining anywhere in sight.  By now, we have all heard enough bad news about—or, even worse, experienced firsthand—the fact that many foundations and other private sources of funding also have less money to give as a result of the recession.

It is our goal, however, to share with you some strategies you can use to maximize fundraising opportunities for your organization—regardless of what’s happening in Harrisburg.

Diversify your sources of funding. Chances are, if your organization is among those hit hard by the current lack of state funding, you are faced with an incredible opportunity to discover new sources of support.  Nonprofits that are accustomed to substantial levels of government support may not have a great deal of experience locating and requesting support from private foundations.   If your organization fits this description, the good news for you is that the funding you need is out there, but it may just take some work to find it.

Accelerate your fundraising campaign. With the recent budget cuts on everyone’s minds, there is no better time than now to reach out to private foundations.  If your organization faces a loss of government support, private foundations and institutions with the power to help your organization are likely to be more sensitive to your situation—especially if you make it clear to them exactly how the climate of reduced government support has affected your organization.

Focus on your mission. We are all well aware of the fact that not every private foundation is brimming with cash, ready to hand it out to anyone who asks.  So how can your organization ensure that it locates the foundations that are likely to be funding partners?  The answer is simple:  keep doing what you’re doing.  In the current recession, there is an increased demand for many services provided by nonprofit organizations.   This fact is clear to everyone—especially those in the foundation community.   The bottom line is that grant makers want to know that their money is making a difference in people’s lives.  If you bring your attention back to your organization’s mission and use it to re-focus your fundraising efforts, you will likely receive more attention from potential grant makers.

They finally did it.  After a grueling 101-day impasse during which a dieting Governor Ed Rendell was able to lose 50 pounds, the Pennsylvania Legislature has finally approved its budget for the 2009-10 fiscal year.  The new budget, which contains extensive cuts in a number of areas, was signed into law by Gov. Rendell on October 9.

The purpose of this Nonprofit Law eBulletin is to highlight some of the impacts the recent state budget might have for your organization and to offer some suggestions and strategies that you can use to weather this time of reduced government support.

Government support is drying up

According to an October 13 article in The Pittsburgh Post-Gazette, State Treasurer Rob McCord’s office began sending out long-overdue checks early this week, with at least 100 Treasury employees working through the holiday weekend in order get payments out on time.

Although the new budget and the issuance of checks is certainly a relief for many organizations who have long been waiting for much-needed funding, there is no hiding the fact that there is a lot less money to go around.   Given the $3 billion shortfall state lawmakers were facing, it’s no surprise that the recently-approved budget contains numerous cuts.  Unfortunately, many of these cuts hit close to home for the nonprofit community.

According to a statement on the Pennsylvania Association of Nonprofit Organizations (PANO) website: “Thousands of nonprofits servicing state and county contracts and grants laid-off staff, cut services or closed their doors.  Children, the elderly and people with special needs lost vital services, and precious time.  Nonprofits must still receive payment from the state or counties, restore their infrastructure, pay back their loans – with interest, and rebuild shattered lives.”

Here are a few specific examples of cuts that may have an impact on the nonprofit community:

The Arts: The Pennsylvania Council on the Arts, which saw its funding decrease by 20.32%           under the new budget, has recently announced that the 2009 Governor’s Awards for the Arts is              being postponed until the spring of 2010.

Economic Development: The new budget cuts all funding to Community Revitalization and         Urban                 Development, meaning that these two budget items that received appropriations of     $39,550,000 and $18,750,000, respectively during the last fiscal year, are now receiving $0.

Health Care: Under the new budget, funding to Health items decreased from $273 million to    roughly $240 million, a decrease of 12.10%.  Some specific areas among the hardest hit were:               Organ Donation Awareness (51.46% decrease), Cancer Control Programs (56.72% decrease), and       Burn Foundation (52.06% decrease).

How to make less equal more..

With this ominous cloud of reduced government support hanging overhead, it may be hard to believe that there is a silver lining anywhere in sight.  By now, we have all heard enough bad news about—or, even worse, experienced firsthand—the fact that many foundations and other private sources of funding also have less money to give as a result of the recession.

It is our goal, however, to share with you some strategies you can use to maximize fundraising opportunities for your organization—regardless of what’s happening in Harrisburg.

Diversify your sources of funding. Chances are, if your organization is among those hit hard by the current lack of state funding, you are faced with an incredible opportunity to discover new sources of support.  Nonprofits that are accustomed to substantial levels of government support may not have a great deal of experience locating and requesting support from private foundations.   If your organization fits this description, the good news for you is that the funding you need is out there, but it may just take some work to find it.

Accelerate your fundraising campaign. With the recent budget cuts on everyone’s minds, there is no better time than now to reach out to private foundations.  If your organization faces a loss of government support, private foundations and institutions with the power to help your organization are likely to be more sensitive to your situation—especially if you make it clear to them exactly how the climate of reduced government support has affected your organization.

Focus on your mission. We are all well aware of the fact that not every private foundation is brimming with cash, ready to hand it out to anyone who asks.  So how can your organization ensure that it locates the foundations that are likely to be funding partners?  The answer is simple:  keep doing what you’re doing.  In the current recession, there is an increased demand for many services provided by nonprofit organizations.   This fact is clear to everyone—especially those in the foundation community.   The bottom line is that grant makers want to know that their money is making a difference in people’s lives.  If you bring your attention back to your organization’s mission and use it to re-focus your fundraising efforts, you will likely receive more attention from potential grant makers.

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