CalNonprofits Articles

NASA ShutdownThe recent shutdown of the federal government was the longest in U.S. history, and while nonprofits make up 15% of California’s Gross State Product, we didn't hear much about how nonprofits are impacted. So we asked you, the organizations on the ground, what you’re experiencing, and here’s what we heard:

The unexpected -- and troubling -- message is that the shutdown affected nonprofits and communities in surprisingly large ways. From food banks and housing groups to education and arts organizations, people are reporting hardships across the state. And while it’s still early for some communities to feel the pain, nonprofits are nonetheless concerned and preparing for problems in the future, particularly if the government shuts down again in a few weeks.

Despite the media focus on national parks and services, California nonprofits are affected directly, and their communities feel the pinch as well:
  • Nonprofits that have federal funding have been unable to receive reimbursements for work done in the 4th quarter of last year: "We can't invoice the National Endowment for the Arts for the last [portion] of our grant funds."
  • Others can't complete applications for new funds. For example, housing organizations can't tell if USDA 502 home loan applications for their clients have been approved. "It is impossible to learn anything about . . . applications for infrastructure, fire disaster response, and economic development . . . from the U.S. Department of Commerce. The total impact exceeds $15 million for two rural northern California counties."
  • Low income people cannot get help filing their taxes: with most of the IRS shuttered, nonprofits that train volunteers and staff to complete tax returns cannot access the necessary software from the IRS. "We cannot get the software for our Tax Preparation Assistance program . . . we are ready to launch the program in every way but cannot move forward.
  • Cash flow -- often problematic due to reimbursement-based policies -- has gotten so bad that some nonprofits are considering layoffs: “Our federal grant funds will be held for 2019 until the shutdown resolves. This could result in staff furloughs until the cash flow resumes.”
In addition to issues with late payments from the government, others reported that they are lowering their fundraising expectations. “We participate in the Combined Federal Campaign, where federal employees can donate to charities through payroll. We are in the middle of the campaign which runs from the fall until January 11 for the year. So if they are not working they are not pledging to donate.” That, in turn, has an impact on the people they serve: “Our funding goes directly to financial aid for cancer patient copays and deductibles, so we will be able to help fewer patients than we might have otherwise.”

And more broadly, the shutdown created problems for the clients and constituents of nonprofits. Groups are concerned about federal housing subsidies for low-income renters, food stamps for struggling families and other public benefits that could be delayed. Nonprofits serving communities with high numbers of federal employees are especially hard-hit.

For instance, a nonprofit in San Diego notes that they are receiving increased food and that there is increased stress among government employees impacted and their families. And a group in Humboldt that is home to many employed by the Coast Guard reports, “Now that they are not getting paid it is certainly painful for their families and for our local economy.”

Some who responded to our survey replied that they haven’t seen any impacts and aren’t expecting any, while others harbor more general anxiety: “We haven't heard of direct impact yet, but there's a lot of fear and uncertainty…” With another possible shutdown on the horizon, this worry is likely to grow.

What happens in Washington affects the whole country, and California nonprofits and communities are among those facing more and more urgent difficulties. As we keep monitoring the situation, let us know how the shutdown affected your nonprofit and your community.

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