Oregon's nonprofit agencies can't rescue state government
Tight state budgets encourage legislators to look around for other ways to ensure the provision of public services. One common hunting ground is the nonprofit sector. But budget cuts often strain nonprofit organizations, either by reducing direct government financial support or reducing state services to the point where more people turn to nonprofit organizations for help.
The legislative session that just ended in Salem offers a case in point. Although not as severe as originally feared, cuts to human services programs are concerning.
"We're cutting our family support program in half," said Sen. Sara Gelser, a Corvallis Democrat and chairwoman of the Senate Human Services Committee. Changes in eligibility requirements mean that essential support will be withdrawn from children and families that have intellectual and developmental disabilities. About 600 children are expected to lose welfare payments.
Where are the families of these children to turn?
Oregon has close to 20,000 registered nonprofits, which make significant contributions to the economic, social and environmental future of the state. They provide crucial public services in a wide range of areas: direct service or care to our most needy residents, protection of animals and the environment, and employment for around 200,000 Oregonians.
In some ways, nonprofit groups are well-positioned to take up the slack and provide public services. The public, for instance, tends to see them in a positive light. According to a recent DHM Research study, 51 percent of Oregonians view the state's nonprofit organizations more positively than state government, and another 41 percent feel the same toward both. People associate notions of mission, focus, efficiency, accountability and community with nonprofit organizations. Those who view nonprofit organizations more favorably explain that these groups truly help people, and, tellingly, that they operate with limited resources or waste of funds.
Only 1 in 20 Oregonians feel less positive about nonprofit groups compared to state government. Oregonians in this group feel that some nonprofit organizations operate more like a business and can't be trusted; they point to lack of transparency or accountability as a reason for their more negative attitudes.
But awareness and knowledge levels about nonprofit organizations are low — even lower than knowledge of the ABC's of state government and public finance. They don't have a good appreciation of the impact of the recession on nonprofit resources, including training and technology, the ability to pay staff competitively as compared to other sectors, or the struggle to find volunteers.
Budget cuts from Salem will only add to existing pressures on the nonprofit sector, which has yet to recover from a decline in philanthropic giving during the last recession. Other efforts to require more state reporting to retain property tax exemptions and, more generally, to make it less financially beneficial for individuals and businesses to give charitably, threaten the growth of this sector as well.
In the May survey, we asked Oregonians to imagine that state government went away altogether and to estimate how much of the cost of public services the nonprofit sector could pick up with its current levels of staffing and financial support. On average, Oregonians believe nonprofit agencies could pick up about 26 percent of public service costs.
Views about how much nonprofits groups can do correlate to the general outlook on the role of government. Republicans think these nonprofit groups could pick up more of the government's public services — almost half, in fact (44 percent). Numbers like these embolden legislators who say that nonprofits organizations can provide public services less expensively and more efficiently than the state can. Budget crisis solved!
But there is a sleight of hand at work here: perception, driven by wishful thinking, is winning out over reality. The reality is what we hear from Oregon's nonprofits group: "No way, Salem! We don't have the money or the manpower."
It was a nice thought, but the easy fix of shunting the public burden over to nonprofit agencies won't work unless a lot of other things change at the same time.
Adam Davis is a founding principal in DHM Research, a non-partisan firm specializing in assisting with public policy making and communications. Visit www.dhmresearch.com.