Nonprofits face cuts

By Solja Nygard Frangos

North Carolina nonprofits could lose at least $18 million in grants and appropriations, while struggling to serve more people, under the plan by Gov. Mike Easley to cut $836 million in state spending for the fiscal year that begins July 1.

Cuts affecting nonprofits represent only 2 percent of total reductions in the $15 billion budget Easley has proposed, says spokesman Ernie Seneca.

[The N.C. House on April 16 tentatively approved a budget that is roughly $65 million less than the one proposed by Easley.]

Nonprofit officials say the cuts could force many nonprofits to reduce the number of their clients, cut programs or lay off staff.

Under Easley’s plan, the budget for Smart Start, the early childhood initiative, would fall to $190 million from $198 million, a move that could cost some low-income parents their child-care subsidiary assistance, says Smart Start spokesman Geelea Seaford.

The plan also could eliminate some family support services, such as the home visitation program for teen parents, she says.

“Many programs are already cut to the bone so it would be difficult for local [Smart Start] nonprofits to decide what to cut,” she says.

Easley also would cut to $3.05 million from $3.68 million the funding that the N.C. Arts Council, a division of the state Department of Cultural Resources, uses to make grants community arts groups throughout the state.

Those cuts could have deep impact because arts groups often use state grants to help raise money from other sources, says Mary Regan, executive director.

“If a nonprofit receives a grant from us, other prospective donors might become more eager to give, too, since the nonprofit has already been scrutinized by us,” she says.

Rural development also would suffer cuts under Easley’s budget.

State funding that the N.C. Rural Economic Development Center uses to make grants to rural groups, for example, would decline to $2.88 million from $3.03 million this year.

As a result of budget cuts a year ago, Coastal Community Development Corp. in New Bern — one of 32 local development corporations the center supports — was forced to close, says Anthony Powell, grant program director.

Budget cuts could force the closing of other local community development corporations, he says.

Nonprofits that want to lobby against the proposed cuts should be prepared to help lawmakers understand the impact the cuts would have, says Elaine Mejia, senior policy analyst with the N.C. Budget and Tax Center.

“Show how someone benefits from your nonprofit and explain what would happen to that person if the aid was cut off,” she says.

Gita Gulati-Partee, program director for the N.C. Center for Nonprofits, says the proposed budget would give nonprofits a double-blow because it also would reduce state services.

“Basically the cuts could reduce or eliminate state programs, thus increasing the demand for nonprofits’ help,” she says.

To keep their service contracts with the state, she says, nonprofits should provide lawmakers with accurate quantitative data on their operations.

Nonprofits, she says, “should show for how much cheaper they can offer a certain service compared to a government agency.

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