Nonprofits View Budget Deal With Relief and Wariness

The new bipartisan federal-budget agreement would make federal support to charities more steady and predictable, but nonprofit leaders warned that Congressional passage of the deal, far from a sure thing, would do little to help the most vulnerable.

If Congress coalesces around the agreement, says Candy Hill, executive vice president for social policy and external affairs at Catholic Charities USA, her group’s member organizations would be provided with a reliable two-year stream of federal support, something that has been missing for several years as Congress passed a series of temporary bills to keep the federal government afloat.

“We’ve gone from crisis to crisis” in recent years, she said.

However, Ms. Hill said other issues of importance to her group, including the charitable tax deduction and food aid for the poor, were not dealt with in the agreement.

“I’m not ready to say how wonderful this is until we see how this all plays out.”

Another big thing missing from the agreement, said Ms. Hill and other nonprofit leaders is an extension of unemployment benefits. For about 1.3 million Americans, those benefits run out on December 28, and when they expire, nonprofits expect many more people to seek aid from social-service charities.

“That’s the biggest immediate need we have in this country, and it’s been left on the table,” she said.

No More ‘Gimmicks’

The budget plan, crafted by Sen. Patty Murray, a Washington Democrat, and Rep. Paul Ryan, a Wisconsin Republican, would set spending levels for fiscal 2014, which began on October 1 and for fiscal 2015.

The two lawmakers said the plan would reduce the budget deficit by at least $20-billion but would avoid the pain of the automatic spending cuts that were supposed to be imposed in January.

The proposal is good for nonprofits because it gets rid of the “gimmick” of automatic spending cuts, said David L. Thompson, vice president for public policy at the National Council of Nonprofits.

The arbitrary across-the-board cuts “hurt lean nonprofits providing great services; they’re getting whacked just as bad as fat programs that could use paring,” he said.

While the agreement blunted the impact of cuts to domestic programs, some nonprofit leaders, including William Daroff, director of the Jewish Federations of North America’s Washington office, said many federal services for the needy that are provided through nonprofit organizations, including Meals on Wheels and emergency food and shelter, were left without enough money. Still, Mr. Daroff said the deal was promising because it reduced the likelihood of another federal-government shutdown and limited the pain of the across-the-board cuts.

“Breaking the partisan gridlock is a plus, he said. The agreement ”is a signal that Congress is ready to get down to work and not get driven into an ideologically driven cul-de-sac.”

Parties Compromising

Other nonprofit officials shared Mr. Daroff’s hope for legislative progress.

While Irv Katz, president of the National Human Services Assembly, an umbrella group for social-service charities, lamented that more money was not available to help the poor, he called the agreement a “great breakthrough.”

He is optimistic, he said, that Democrats and Republicans can use the plan to pass a budget bill before the January 15 expiration of the current federal spending legislation.

The agreement was a “moral victory” that showed that members of opposing parties on Capitol Hill can compromise, said Mike King, president of Volunteers of America.

While spending levels on individual programs are still unclear, Mr. King and other nonprofit officials said they placed more trust in giving federal department directors discretion to make cuts, rather than submitting to an across-the-board reduction.

If finalized, he said, the two-year agreement would make a lot of nonprofits that spend money on programs before receiving federal reimbursement checks breathe easier.

“It’s a cash-flow problem for us,” he said.

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