Sunday, January 13, 2002

This is an idea that came out of a meeting I attended last Monday and Tuesday of nonprofit executives from around California: Where's Our Economic Stimulus Package?

Right now Congress is considering a multi-billion dollar corporate tax rebate that would effectively return every penny the effected companies have paid in Federal taxes for the past fifteen years. Following September 11, money was found to make sure the airlines would survive through their laying off of over 100,000 employees. This is nothing new: we've bailed out Chrysler, we've bailed out a thousand other companies because it was "good for the economy."

At this same time, however, we're tightening our fiscal belts when it comes to services for the poor, the elderly, youth, and all those millions of newly unemployed or "displaced" workers. Grants and contracts to nonprofits are being slashed, not only by the Federal government, but by state governments too as the dominoes fall closer to home. The full effect won't be felt until July 1, when the next government fiscal year begins.

Following July 1, start looking for nonprofit social programs to be closing their doors. We did a brief study of local nonprofits, their funding sources, and the expected cut-backs from those funding sources, and anticipate that about 400 such programs will close just in the San Francisco Bay area.

When a business goes under, you can usually assume one of two things: Either there's no demand for the product or service being offered, or poor (or corrupt) management. This is not necessarily the case when nonprofits close their doors. It is most often because of increased demand coinciding with major cuts in funding. That is the situation currently developing.

So, we ask, where's our economic stimulus package? In truth, the nonprofit sector is just an important and vital sector of the economy as any of the others that benefited from previous bail-outs.

California’s nonprofits employ three-quarters of a million individuals, and deploy the services of another ten million volunteers. Nonprofits have staggeringly low overhead compared to other businesses, and they use their dollars, staff and volunteers to help the people who are most suffering. Where better to give a stimulus package?

In a small sense, this is rather tongue-in-cheek. I don't really expect anything called a "stimulus" package for nonprofits. But, perhaps, maybe it does suggest that this is the wrong time to cut back on social spending. And maybe, just maybe, it points out the idiocy of promoting other "stimulus" packages when resources are needed for people in pain.

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