Funding needed for nonprofits

---

Tweet

The economic recession that has the nation and world reeling right now has been felt in Michigan for most of the past decade.

During the past six months in particular, news stories have focused on the fate of the automobile manufacturers that we used to call The Big Three.

However, while it is widely understood that manufacturing industries account for the largest percentage of jobs in our state, far fewer people know which sector is the second largest in terms of employment.

That sector is not retailing, construction or government — it is the nonprofit sector.

While the automakers can blame declining sales, reduced demand and global financial market forces for their current crises, many nonprofit organizations — particularly those in the health and human services fields — face heightened demand for their services but reduced funding to serve people.

In October 2008, the Michigan Nonprofit Association, MNA, and the Johnson Center at Grand Valley State University surveyed 300 Michigan nonprofit organizations about how economic conditions were affecting them. Of those surveyed, 71 percent of organizations reported an increase in demand for their services from the previous year, blaming the economy, state budget cuts, fuel and food costs and foreclosures. Ninety-six percent of human services organizations reported they believe demand for their core services will increase in 2009.

Another survey conducted by MNA and the Johnson Center in January asked 200 Michigan nonprofit organizations about the challenges they face in delivering these needed services to their communities.

Almost half of the organizations surveyed reported decreased fundraising totals for 2008. Of these, almost 60 percent reduced their number of employees and more than half reduced the services they offer as a result. Of the nonprofits that receive government funding, 45 percent have experienced a delay in their scheduled payments.

These statistics are significant, but they don’t paint a very relatable picture of the situation.

Imagine a local food pantry that purchases or receives food donations, warehouses this food, and then distributes it to those in need in a Michigan community. As jobs are lost — particularly those in manufacturing — and homes are foreclosed, the need for this pantry increases. At the same time the flow of small cash donations that allows the pantry to maintain its small staff and fuel its trucks wanes to a trickle, as people have less money to give to charitable causes.

The small subsidy that the pantry receives from the government is delayed repeatedly, and soon the pantry must cut its staff and stop operating its trucks as frequently as it needs to — all of which ultimately means that far fewer people get food.

Now imagine this simplified situation spread across thousands of nonprofit organizations in the fields of health, human and social services, education, literacy and the arts.

The problem is felt further since layoffs in the nonprofit sector mean more people who need services and fewer who can make donations to support the organizations that provide these services.

Whether they are in the human services fields or the world of arts and culture, nonprofit organizations are critical to lasting economic recovery. Even the Detroit Institute of Arts, fresh off a successful reopening and reconfiguration, is laying off 20 percent of its work force as it tries to cope with sharp decreases in both government and private funding.

It is these very organizations that will be relied upon to train a work force for Michigan’s next economy, keep citizens healthy, teach those who fall through the cracks the of public education system and incubate tomorrow’s businesses.

Though on the front lines of many of the crises our state faces, nonprofit organizations cannot meet the needs of Michigan citizens alone.

For a more prosperous future for our state and its citizens, everyone — from the government to businesses to individuals — must pitch in.

Ryan Dinkgrave is a State News guest columnist. Reach him at dinkgrave@gmail.com.

---