How bad is Illinois' budget deficit? At June's "State of the Nonprofit" conference in Chicago, a panelist said that "If California is Greece, then Illinois is Spain." A bankrupt state has forced thousands of Illinois nonprofits to await hundreds of millions of dollars in backpay checks that come often at random times in random increments. In these tenuous times, funding diversification has been the key to survival. And federal funding - namely grant opportunities through Obama's stimulus package - has been instrumental as a stopgab to keep many Illinois nonprofits sustainable during the coming years of debt recovery.
For Illinois nonprofits who rely on federal funding, or any kind of government funding for that matter, Paul Ryan's "Path to Prosperity" budget plan reads like a Russian novel. The measure would deal two overarching blows to the already overstretched non-profit sector.
First, to the tune of $750 billion, the plan would cut grant and contract opportunities for nonprofits that provide education, training, employment, and social services to the poor. Virtually every federally funded program would be on the chopping block, including programs that involve agriculture, the environment, transportation, medical research, and veterans’ programs, to name a few.
According to an article in the Chronicle of Philanthropy, "By 2050, according to estimates by the nonpartisan and widely respected Congressional Budget Office, the Ryan plan would leave no money for most of the federal government beyond Social Security, health care, and defense."
Second, by shredding safety net programs such as SNAP, Medicaire, and Medicaid, an influx of people would fall out of the middle class and into the waiting arms of social services.
But hey, at least we'd finally close the federal budget gap, right? Well, not exactly. Per Chronical of Philanthropy: "The Ryan budget would cut tax revenue by $4-trillion over its first 10 years and even more beyond then." As such, his plan would increase the deficit by $3.1-trillion between now and 2022, according to the House Budget Committee’s projections.
Supporters of "Path to Prosperity" may argue that private funding - bolstered by individual donations - can shape and sustain the nonprofit sector better than the government can. But a recent Chronicle of Philanthropy study reveals that the upper class - which stands to benefit most from the plan - are not as generous as the middle class, which stands to deteriorate under the plan.
According to the article: "Middle-class Americans give a far bigger share of their discretionary income to charities than the rich. Households that earn $50,000 to $75,000 give an average of 7.6 percent of their discretionary income to charity, compared with an average of 4.2 percent for people who make $100,000 or more."
Ultimately, without a strong middle class, can individuals provide anchor support for the nonprofit sector that relies on government funding for about one-third of its revenue?
With Election Day fast-approaching, nonprofits nationwide need to ramp up their advocacy and voter registration efforts. The stakes for our sector are bigger than ever.