Utah Community Foundation Asks State to Help Charities

Nonprofit groups across the country have felt the sting of the recession, but those in Utah face an extra handicap: Most cannot turn to community foundations for help.

Utah has only one community foundation, the Community Foundation of Utah, in Salt Lake City, that serves the broader state. It started less than three years ago and has no general endowment.

Given those limitations, the community foundation is asking the state government to help struggling charities keep their doors open.

“Our nonprofits—and the communities they serve—are more vulnerable than those of any other state,” the foundation said in a report presented last week to the Utah Legislature.

“Signs of recovery are faint to some organizations and not visible at all to many others, especially those serving rural communities,” it said. The report urged lawmakers to offer tax breaks to encourage individuals and corporations to make more charitable donations.

Fraser Nelson, the foundation’s executive director, said Utah is facing steep state budget cuts while charities are “just maxed” because of rising demand and falling donations.

The foundation has been surveying nonprofits regularly since 2009, and the results paint a bleak picture: 42 percent of 200 groups surveyed started the year with three months or less of operating capital on hand, 27 percent ran a deficit last year, and 14 percent had no money in the bank in September. Forty-six percent said in September they had lost a major donor or other funding source in 2010.

Ms. Nelson said a state tax incentive for giving could be “our own little stimulus package.”

But the idea is far from a slam-dunk.

Rep. David Clark, a Santa Clara Republican who is co-chairman of the state’s Joint Social Services Appropriation subcommittee, said lawmakers may not want to approve an incentive that would cut into revenue as they consider deep spending cuts, The Salt Lake Tribune reported.

“It’s great in concept,” he said. “But the timing is wrong.”