With State Budgets at Stake, Charities Eye Governors’ Races Carefully

Last month, the Providers’ Council, an association of Massachusetts nonprofits, did something it had never done before: It sponsored a forum to ask the candidates for governor what they would do to help the 185,000 workers who provide the state’s human services—and the people they serve.

Massachusetts, like many other states, is grappling with how to close a looming budget deficit—and the group wanted the next governor to understand how cuts in services to the poor, the elderly, and people with disabilities would affect their constituents.

“We felt it was imperative to talk about what we’re about and who we serve,” says Michael D. Weekes, the group’s leader. “We’ve never quite had the attention of the candidates.”

He is not alone in wanting to capture the attention of candidates who are vying to head their state. Gubernatorial races are taking place in 37 states on November 2—and nonprofit leaders across the country are scrutinizing the contenders’ agendas carefully.

Summing up the issues that nonprofits are watching in his state, Kyle Caldwell, president of the Michigan Nonprofit Association, says, “There are three important ones: the budget, the budget, and the budget.”

A Delicate Balance

The elections come at a time when many charities are already reeling from state budget cuts. Fifty-six percent of human-service nonprofits reported receiving less money from state governments in 2009, according to a survey by the Urban Institute—and more than half reported problems with late payments.

Next year probably won’t be much better—39 states have already projected budget gaps totaling $112-billion for the 2012 fiscal year, the Center on Budget and Policy Priorities reports.

This year’s slate of gubernatorial candidates faces the daunting challenge of finding solutions to those problems that don’t involve budget cuts, given the widespread anti-tax sentiment fueled partly by the emergence of the Tea Party movement.

Against this backdrop, the nonprofit world is eager to get its concerns on the candidates’ radar. But to date, it has had mixed success.

In Massachusetts, four gubernatorial contenders—Charlie Baker, a Republican; Tim Cahill, an independent; Deval Patrick, the current Democratic governor; and Jill Stein, the Green-Rainbow candidate—showed up for the Providers’ Council event at Boston’s Faneuil Hall. They viewed recorded vignettes from people who provide and receive human services and answered questions about subjects such as low salaries of direct-care workers, state reimbursements for services, and the unemployment problems of people with disabilities.

The Colorado Nonprofit Association and Minnesota Council of Nonprofits also persuaded gubernatorial candidates to attend recent forums to answer questions about the budget and the state’s relationships with nonprofits.

But in some states, nonprofit advocates have had trouble competing with myriad other interests for the candidates’ attention.

In California, where regular budget impasses have branded the state as especially dysfunctional, neither of the major gubernatorial candidates, Jerry Brown, the Democrat, or Meg Whitman, the Republican, attended the California Shared Prosperity Forum, an event organized by social-justice groups in August to raise issues important to the governor’s race, although Mr. Brown sent a statement.

“It was unfortunate because we had over 1,000 people who were struggling families and seniors, people who the candidates don’t often have candidate forums with,” says Nancy Berlin, director of the California Partnership, a coalition of antipoverty charities that helped organize the session.

Nonprofits have also not heard much from the major candidates in the high-profile New York race—Andrew Cuomo, the Democrat, and Carl Paladino, the Republican—says Doug Sauer, chief executive of the New York Council of Nonprofits. “The issues are out there, but I don’t think the candidates have really addressed them,” he says.

Nancy Ronquillo, chairwoman of the Illinois Partners for Human Service, a coalition of organizations that is pushing to improve the way the state pays human-service charities, says she was impressed by comments at a recent debate between gubernatorial candidates Bill Brady, a Republican, and Gov. Pat Quinn, a Democrat. She says both emphasized that the state, which now has $5.5-billion in unpaid bills, should settle up with human-service providers.

“What was very different—and I’ve been in this field for 30 years—is that gubernatorial candidates would have an understanding of, and speak to the importance of nonprofits to their communities and to citizens,” says Ms. Ronquillo, who heads Children’s Home & Aid, in Chicago. “It was very exciting and reassuring to hear.”

However, she adds, “Illinois’s budget problems are so egregious that I am very, very concerned about what might be on the solutions list.”

Cutting Costs

While many high-profile candidates are relatively silent about nonprofit issues, several candidates who responded to a Chronicle survey of gubernatorial hopefuls about their nonprofit agendas highlighted the tension they feel between wanting to balance their budgets while also preserving the safety net.

“The next governor’s job will be to bring the state budget back into balance without raising taxes on working families,” said Tom Foley, a Republican businessman who is running for governor of Connecticut. That means spending cuts, he added, but they should not involve cutbacks in social-service programs. He would “do more with nonprofits to help reduce the cost of providing services rather than cutting services.”

Others said the best way to help nonprofits was to stimulate the economy in general. That would increase “employment, capacity for charitable donations, and state revenues,” wrote John Hickenlooper, the Democratic mayor of Denver who is vying to head Colorado. He proposed doing that partly by making long-term investments in education and infrastructure to attract employers.

‘Sticky Wicket’

In some states, budget questions have been put into the hands of the voters—and at least charities can take a stand on those, unlike in governors’ races, where tax law prohibits such organizations from endorsing or opposing candidates. In Colorado and Massachusetts, for example, nonprofit leaders are fighting measures on the November ballot that they contend would lead to even more cuts in state payments to nonprofits while creating more demand for their services.

The Colorado Nonprofit Association and other nonprofit advocates are urging voters to reject measures that would cut vehicle-registration fees and reduce income-tax rates, restrict the ability of state and local governments to borrow money, and limit property-tax increases.

The Providers’ Council, in Massachusetts, wants people to vote no on measures to cut the state sales-tax rate and repeal a sales tax on alcoholic beverages that is used to pay for substance-abuse programs.

In Arizona, many charities oppose a proposition that would repeal the state’s First Things First program, which provides money for early-childhood services, and move the money—more than $300-million, which comes from a voter-approved tobacco tax—into the general fund. They argue that the early-childhood programs are “critical to the future of our state,” says Patrick McWhortor, president of the Alliance of Arizona Nonprofits. However, the issue is somewhat of a “sticky wicket,” he says, since its defeat would remove one way to fill Arizona’s deep budget hole, which is currently $825-million and projected to grow into a $1.4-billion budget gap in fiscal year 2012.

Preserving Past Gains

Elsewhere, philanthropic advocates are hoping to at least preserve the gains they made with previous administrations. For example, in Michigan, which is facing a big turnover because of term limits, the Michigan Nonprofit Association has been working with both major-party candidates to encourage them to keep a position that was created two years ago—the Office of Foundation Liaison, a cabinet-level position that is paid for by foundations. It has also been urging the candidates for attorney general to keep the Nonprofit Council for Charitable Trusts, which advises the attorney general on issues affecting charities and giving.

Some nonprofit advocates are pouring resources into getting nonprofits’ clients to the polls. The Nonprofit Voter Engagement Network, in Boston and St. Paul, for example, is using foundation money to work with nonprofits nationwide on projects to improve voter turnout.

But Tim Delaney, president of the National Council of Nonprofits, is worried that voters are too exhausted by economic problems and the legislative battles in Washington since the 2008 presidential election to pay close attention to state issues.

“There was such a magnet drawing all attention to D.C.,” he says, “and away from the great needs out in the communities.”