News and analysis
February 27, 2013

Nonprofits Urged to Watch Washington Budget Debate

Richard White/Chronicle of Philanthropy

The $85-billion in across-the-board federal spending cuts scheduled to begin Friday are prompting nonprofit leaders scrambling this week to explain the impact and to rally their members to lobby Congress to reverse the reductions.

The Coalition on Human Needs and Catholic Charities USA both issued statements to their members this week to explain how the $31.5-billion in cuts to domestic programs could hamper their budgets and that time remains for Congress to cancel the so-called sequestration before the end of March.

One group that has been tracking the budget cuts, the Center for Effective Government (formerly called OMB Watch), started a new Web site this week to serve as a one-stop hub for information about what is happening at both the federal and state levels.

Patrick Lester, fiscal-policy director at the center, says it is clear to many political observers that Congress will not stop the cuts before March 1.

“Most groups are going to be unpleasantly surprised that the cuts really did happen,” says Mr. Lester. “The nonprofit sector needs to be talking about this. I’m not playing the role of Chicken Little this time. The sky really is falling.”

While Friday is a key date for the cuts to be imposed if Congress and the president take no action, the more important deadline affecting charities and the people they serve is March 27. That’s when the government would shut down unless political leaders have adopted a major deficit-reduction agreement. (See more about how the budget decision-making works.)

White House Call

One group that has been speaking loudly about the cuts—loud enough to get an audience with the White House on Wednesday—is the Coalition on Human Needs. The Washington advocacy group, which represents hundreds of human-service groups, has been raising alarms about the cuts for months, and its members are expected to join in a call with White House officials today to express their concerns.

“People who are service providers are aware that this is potentially going to affect them badly,” says Deborah Weinstein, executive director of the coalition. “How will it affect them? A lot of people are pretty mystified.”

Confusion Abounds

The National Council of Nonprofits has also been trying to inform its members of the impending cuts, reminding them in a February newsletter that the reductions are not just going to hit federal agencies. In a conference call last month with California nonprofits, the council’s chief executive, Tim Delaney, said, “People are not understanding this right now.”

The cuts, he added, “are real and they’re going to hurt.

In an interview this week, Mr. Delaney says nonprofits with government contracts will be trying to figure out “when does this hit, how will it hit.

“There’s going to be a lot of confusion,” Mr. Delaney adds. “Reverberations are not going to hit for two to three weeks. Then you’re talking about 2 million people who have lost their meals, their homes, their medications.”

Blows to Come in the Fall

Nonetheless, nonprofits may not feel most of the impact of the cuts until later in the federal fiscal year, which ends September 31, Mr. Lester says.

Government grants that expire at the end of the year might be renewed for smaller sums or cut entirely when the 2014 fiscal year begins in October, he says.

Mr. Lester says he is surprised he hasn’t seen more advocacy from nonprofits. The bulk of the lobbying that occurred in December, when the cuts were first supposed to take effect on January 2, focused on preserving the charitable tax deduction. Once Congress decided to put off any spending decisions until March, he says, he expected more action.

“The charitable tax deduction isn’t the only game in town,” Mr. Lester says.

Mr. Lester says he worries that nonprofits, have grown so accustomed to Congress working out a solution to big challenges right ahead of a deadline that they are not advocating or preparing as seriously as they should be. “I’m not so sure Congress will figure it out this time,” he says.

Send an e-mail to Doug Donovan.