July 27, 2012

Blog - After the Super-Committee: Five Ways to Navigate the Fiscal Crisis - Government Funding

Daniel Stid explores what the breakdown of the so-called congressional super-committee process means to nonprofit organizations that rely on government funding.

By: Daniel Stid

What does the breakdown of the so-called congressional super-committee process—established by the equally misnamed Budget Control Act of 2011—portend for nonprofits that rely on government funding? The already bleak outlook in the field appears to be growing bleaker still. Bridgespan has just completed a survey of nonprofit leaders whose organizations rely predominantly on government funding, and 91 percent of our 67 respondents agreed that “the federal budget cuts enacted this summer and the additional cuts likely in the months ahead will cause significant problems for our organization as we seek to fund our mission.” The respondents are far less certain of how things will play out, with only 55 percent of the leaders surveyed agreeing that “our organization has an adequate understanding of how the pending federal budget cuts will impact our organization.” It is indeed difficult to grasp what the latest and forthcoming rounds of federal cuts—totaling $2.1 trillion—will mean for government-funded nonprofits. These cuts will be made over a 10-year period, and in many instances will end up being passed through and amplified by already stretched state and local government budgets. We will come back to you in the next few weeks with more of our latest research into what these cuts could entail.

In the meantime, we can share some field-tested insights into what nonprofit leaders can do in the face of this worsening funding climate. In an article that has just come out in the Stanford Social Innovation Review, my partner Willa Seldon and I have drawn upon the experience and observations of our clients and other leading organizations in the field, as well as those of government leaders, to identify "Five Ways to Navigate the Fiscal Crisis." Our goal in writing this piece was to explore whether, "in the highly constrained world of public funding, can a nonprofit delivering superior outcomes do anything more than take the price, accept the terms, provide the service, and hope that things don’t get worse? Do nonprofits have any hope of agency—of having influence or exerting power?” We’ve concluded that there is indeed hope, but that hope alone is not a sufficient method for success—some specific actions are needed. Please let us know what you think about our answer and whether it resonates with your experience.

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