Nonprofits wary of fiscal cliff plunge
When we started to dig into the fiscal cliff yesterday NBC Montana learned that Montanans could face more than just higher taxes. There are more than 6,300 nonprofit organizations in Montana that could feel the impact of financial indecision in Washington, D.C.
Susan Hay Patrick, CEO of United Way of Missoula, is very concerned.
"One of the biggest impacts that the fiscal cliff could have is cuts to federal funding that comes to the states and then is administered by non-profits in the form of grants and contracts," she says.
The country is facing an 8 percent cut on domestic spending, part of the fall out from last summer's debt-ceiling deal as measure to reign in the country's deficit. If nothing is done to avoid the fiscal cliff, taxes will go up and deductions, for things like charitable donations, will go down.
"To remove an incentive for donors to be charitable is very troubling to the nonprofit sector," says Patrick.
Groups like the United Way and Missoula's Open Aid Alliance rely on the ever important private donation, as well as federal grants and funding that is funneled through the state.
"We are actually in a position right now, we don't even know what our budget for 2013 will be yet, because [Montana is] waiting to see what theirs will be," says Christa Weathers, Executive Director of Open Aid Alliance.
Open Aid Alliance provides services for people with HIV and Aids, plus HIV and Hepatitis C testing.
"We did 900 tests last year and that prevention money is the part that is getting cut most drastically," says Weathers. Even lifestyle education and outreach, like monthly housing assistance to is in danger.
"Our clients are very unsettled, I think...it affects our work, I think, in a special way, because we are going to be cut from all angles."
The potential cuts to programs and funding, and the chance for rising taxes has these groups racing to prepare.
Patrick says, "I think we're braced for impact. There's only so much we can prepare for."
Weathers shares the same sentiment. "The light at the end of the tunnel is that we all get innovative and we will figure out how to get through this and we will find another way. Maybe a better way."
Both organizations say they are working on ways to prepare for a money crunch, by reaching out to donors and looking for places to reduce expenses.