Thoughts on the Impact of Federal Budget Cuts
In the wake of the 2008 recession it took 1-2 years for nonprofits to see the impact of the reduction in the philanthropic gifts. Overall giving to nonprofits changed as you can read in this New York Times article from 2014. This resulted in smaller budgets, nonprofits being put out of business, and an increase in mergers and acquisitions. It took until 2015 for giving to rebound to its pre-recession levels. Foundations and corporations redirected their giving to nonprofits who focused their resources on Maslow’s Hierarchy of Needs lowest levels which are physiology and safety – namely food, shelter, and health.
I am going to go out on a limb and suggest a similar pattern is about to happen.
Late last week the Trump administration released their new budget proposal. A fabulous image by Bloomberg showing the impact of this proposed budget on various departments can be seen here. In the cuts were significant decreases in funding streams that many nonprofits have been relying on and using to provide services for decades. This article by The Washington Post shows the impact by agency and a breakdown of the specific funds being affected by the budget proposal. We all know these are not likely to proceed as proposed, but cuts in at least some areas are likely.
So, what should you do about this.
1. Unless you are an advocacy organization or legal organization like the ACLU, stay away from the politics of it. Mention and focus your public messages on its personal impact on your organization, not on the administration who is proposing it.
2. Use it to raise money. Draw a very clear picture of the impact of the cuts on your programs, on the number of people served, and then make a strong call to action. Check out Feedmore’s live Facebook post about their Meals on Wheels program embedded below for ideas.
3. Engage in worst case scenario crisis planning. Dream up what happens if you lose 100% of the funding that is proposed. Decide what your essential services look like. It is much easier to engage in this activity when money is threatened than when it disappears.
4. Revisit your strategic plan and reacquaint yourself with your north star, your mission, and your vision. Look to it for answers for windfalls of donations or severe restrictions.