Sequestration Strategies for Nonprofits

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Posted At: March 14, 2013 6:02 P.M.
by Grayson Martin

With the U.S. government unable to reach a bipartisan agreement to avoid the automatic budget cuts known as sequestration, defense and domestic-related programs will see $1.2 trillion in cuts spread out over a nine-year period. This year alone will see $85 billion in cuts across the board.

The idea of such substantial cuts has caused headaches for many across the country, and it causes a unique problem for nonprofit organizations, as well as those who work to ensure that these organizations are properly funded. Sequestration will not only have a direct impact on nonprofit funding, but will also cause a trickle-down effect that will make other sources of support harder to come by.

Lance Wave is the current major gift officer at the Alabama North District of the American Red Cross. Wave was once the executive director at the Wiregrass Boys and Girls Club, just one of many organizations that will see substantial changes due to budget cuts.

One of the many services that Boys and Girls Clubs offer to children is the Power Hour homework help. Wave said that nonprofit organizations have to go through local school boards in order to receive funding for educational programs and services like after-school tutoring and college prep work.

Photo courtesy of Images_of_money

“School boards are allotted a percentage of their overall budget to fund local nonprofit programs to help education,” Wave said. “When their budget is cut, the amount they have to give to the local community is also cut.”

Wave also stated that some of the biggest effects of sequestration may be felt in cities with military installations and many government employees, such as Enterprise and Huntsville, Ala. These areas will see cuts in both education as well as research and defense, which would then have an impact on the citizens’ salaries.

“So to top it all off, for the parents and citizens who work in these areas, salaries are going to be reduced,” Wave said. “Everyone who lives in these kinds of communities is going to see a big hit in their spending money and how much money they have to reinvest back into the community.”

Now is the time for PR professionals to cultivate and strengthen relationships with current donors. Wave also recommended that practitioners start looking for funding and support from areas that will not be affected by cuts.

“Today CNN showed that car dealerships saw an increase in sales for the month of February,” Wave said. “Now that may be because some people got their tax return early, but everyone needs a car regardless of whether or not their income has been reduced. Car dealerships right now might be a good sector to look at for potential funding.”

There is still a lot unknown about this hot-topic issue. However, there is hope for help. At this point, some organizations like United Way plan to wait things out and see what changes the budget cuts bring.

Rusty Smith is the vice president of resource development with the United Way of West Alabama. The UWWA provides services and support for multiple nonprofit agencies, including the Boys and Girls Club, American Red Cross, Boy Scouts of America and the Salvation Army. The UWWA is responsible for raising funds and distributing them to its partner agencies. It also recruits volunteers from time to time to help with agency-identified projects.

Smith said that it is difficult to tell how the UWWA will be affected because of the unknown factors regarding the sequester at this point. Many of the UWWA’s partner agencies receive federal funding and/or grant monies for their programs and services.

“If this federal funding source is reduced or eliminated, the agencies will be forced to look for other sources of funding including the possibility of asking UWWA for additional funding,” Smith said.

While some people who are normally charitable may find it difficult to give when times are tough, this is not always the case.

“Many times, we have seen donors ‘dig deeper’ and increase their gifts during difficult times since they know if they are feeling the effects in their own lives, that others are feeling it just as badly if not more so,” Smith said.

A nonprofit’s message can be essential in motivating the public to give. Therefore, it is imperative for a PR practitioner to use as many outlets as possible to relay the organization’s message, especially during a time when support is needed the most.

“UWWA has a tried and true message of living united or all of us working together to accomplish more,” Smith said. “During difficult economic times or anytime for that matter, UWWA tries to remind West Alabamians of the variety of ways their donation of money and time can help with issues our residents face in good times and bad.

“UWWA continues to rely on area television, print and radio partners to communicate our message as well as social media. In addition, we are always looking for new ways to remind West Alabamians why their help is needed and thank them for helping with so many needs in the community.”

A lot of work goes into making sure a nonprofit agency has proper funding in order to sustain itself. The news of impending sequestration makes matters even worse. It takes masterful PR pros to strengthen communication and tighten the belt during sparse times.

One Comment

  1. Margaret Bishop

    As the current marketing manager for United Cerebral Palsy of Greater Birmingham, I was thrilled to see a Platform article that highlighted a serious issue in my field. This piece has been well-researched, and Mr. Wave and Mr. Smith represent just two of countless nonprofit professionals who would like to see more recognition given to this matter. Thank you for this article, I look forward to sharing it with my nonprofit development colleagues. Bravo, Platform and Grayson Martin.

    Reply

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