Nonprofit Harvest

On the Stimulus

• New York Times:
  • For States, Stimulus Offers Temporary Relief 
  • Economic Stimulus Special Section
• Washington Post:
  • Taking Apart the $819 billion Stimulus Package
  • States Counting on Stimulus Aid to Balance Budgets

Analysis from Center for Budget and Policy Priorities

• Statement by Robert Greenstein, Executive Director, on the Conference Agreement on the Recovery Package
• Economic Recovery Act: Key Provisions (With State-by-State Estimates)

The Nonprofit Angle

• From the Chronicle of Philanthropy:
  • Congressional Compromise on Stimulus Plan Includes Money for Arts, Social Services, and Volunteerism
• The Cohen Report:
  • Reading an Early Draft of the Stimulus Bill Conference Report: Compromise Provisions (Part I)-Spending 
  • Reading an Early Draft of the Stimulus Bill Conference Report: Compromise Provisions (Part II)-Safety Net Tax Relief 
• Washington Post Op-Ed: Where Stimulus Funds Can Make a Difference

Transparency and Accountability

• Recovery.gov
• From ProPublica (Hat Tip: Utne Reader)
  • Will We Be Able to Follow the Money?
  • The Stimulus Plan: A Detailed List of Spending
  • State-by-State Breakdown of the Economic Stimulus Plan?
• ShovelWatch
• ReadTheStimulus.org (Hat tip: A little light reading…readthestimulus.org)
• From the Sunlight Foundation: We Need Online Review of Stimulus Legislation
• Show Me the Spending

The Minnesota Angle (aka Budget Update)

• Minnesota’s stimulus take: About $9.1 billion
• MPR has a special section devoted to news on the Bailout (it complements their coverage of Minnesota’s budget shortfall)
• From Minnesota Budget Bites:
  • Minnesota quick to prepare for infusion of federal funds
  • Revenue-raising options, with their price tags and impact on tax fairness
  • Legislature asks for your opinion about budget solutions at forums around the state
• pubTalk: MN Legislature: Please Fix the Governor’s Budget
• Political Animal (from Pioneer Press): Pawlenty must redo his budget
• Politics in Minnesota does a great daily roundup of stories on the budget and other related news.

Nonprofits and Credit

• Billions in Nonprofit Projects on Hold Due to Credit Crisis, Report Finds
• Charities Set $166-Billion Worth of Construction Plans on Hold
• Credit Crisis Is Leaving Charities Low on Cash

Other News

• NY Times Op-Ed: Soup-Kitchen Accounting
• From pubTalk: New opportunity for “economies of skill”? 
• Half a Million Nonprofits Could Lose Their Federal Tax Exemptions
• POLICY MEMORANDUM: A Scan of Nonprofit Policy Recommendations for the Obama Administration

 On the Bailout

The Center for Budget Policies and Priorities

The Center for Budget Policies and Priorities has a Special Series Economy Recovery Watch where they post regular updates and analysis on the stimulus package, the state budget crisis, and other economic news.

• Recovery bill’s “Fiscal Stabilization Fund” is important to protecting education and averting state and local budget cuts that would further weaken the economy

The Stabilization Fund would provide funds to partially close state and local budget shortfalls and allow states to avoid some of the most harmful actions they otherwise would have to take to meet their balanced budget requirements.  In particular, it would help avert damaging cuts in state aid to education at a time when school districts are reeling from declines in property taxes caused by sinking property values.

Additional Useful Resources

• What Nonprofits are Saying About the Bailout: A Fast Roundup from Blue Avocado

• From the Cohen Report:
  • What Can Nonprofits Look Forward to in the Economic Stimulus Bill
  • Ensuring a Timely Economic Stimulus: The Benchmark of CDBG Expenditures

• The Artful Manager asks Stimulus or pork byproduct? on the NEA’s possible inclusion in the stimulus package

• Economic Stimulus Package’s “Infrastructure Financing Tools” - a Boost to Charities

The Minnesota Angle

• Impact of federal economic recovery bill on Minnesota

• Update: The stimulus challenge from MPR

Updates

• Sources: Tentative deal reached for $780 billion stimulus package

• Democratic officials say tentative stimulus deal reached

Harvesting the Web

• From Philanthropy Potluck:
  • Nonprofit Survival: Four Steps to Take Now
  • Filling the Gaps: Expectations vs. Reality

• Blue Avocado: The Nonprofit Layoff Issue

• From Scott Russell at MinnPost: One more way nonprofits can save a little money

• Q&A with Nell Edgington - Accelerating Social Innovation

• Global Social Investment Exchange on Philanthropy 2173
  

• Avoiding the Sirens Song of Social Media Fundraising - The Great Social Media Debate?

Minnesota Budget Update

• From Smart Politics a Humphrey Institute blog: Minnesota’s 2010 Budget Deficit Among Top 10 Largest In Nation

• Pawlenty budget makes things worse a Star Tribune editorial written by Dane Smith of Growth and Justice and Nan Madden of the Minnesota Budget Project

• Finance and Commerce
  • Even the small state agencies are taking a hit
  • Pawlenty’s HCAF proposal could cost Minnesota federal stimulus dollars
• Politics in Minnesota:
  • How much would it cost to leverage the additional $2 billion in health care money in federal stimulus package? No one knows
  • The T Word: Which taxes to raise? Five ideas that are circulating at the Capitol

• State think tank leaders find little common ground on economic issues

• From the Star Tribune: Editorial: Tobacco bonds aren’t a lasting fix
  

The Nonprofit Angle

• Nonprofits lobby for fair tax hikes to avoid drastic cuts from MinnPost
  

The Local Government Angle

• The City of Minneapolis: Cuts to the City’s 2009 budget

Looking for some additional background on the budget crisis in Minnesota and across the nation?  Here are two useful articles to get you started:

• New York Times article Facing Deficits, States Get Out Sharper Knives.

• The CBPP has a number of useful articles, including States in Trouble Due to Economic Downturn and State Revenues Plummet.

How can you start assessing tough choices you may have to make at your organization? One idea is to think through possible state budget scenarios, and develop corresponding program and organizational budgets.

These resources provide additional information on budgeting for nonprofits:

• Annual Budget Planning

• Nonprofit Budgeting Process

• Annual Budgeting Planning: 10 Step Checklist

• Budgeting Nonprofit Income: Grants and Contributions

• Nonprofit Budgets Have to Balance: False!

• Is Your Budget Broken?

• Two Guiding Principles for Effective Budgeting

Related news

• Pawlenty upbeat about governors’ historic meeting with Obama but worried about the growing federal and state deficits

• Fitch changes not-for-profit hospital outlook to negative (Hat tip: Stephanie Jacobs, from Fieldstone Alliance)

We knew that news would not be promising. We were warned that the state budget deficit for the next two years could be as high as 6 billion dollars.

So, what are the numbers?

Although the numbers are not as bad as some projections, they are ugly.  What a weird reaction to be oddly relieved that the gap is “only 5.2 billion.”

Minnesota Budget Bites has a great breakdown of the numbers:

• For the current biennium (FY 2008-09, which ends June 30, 2009) the deficit is $426 million (that’s about half the size of the deficit we already closed during the 2008 Legislative Session).
• For the next biennium (FY 2010-11) the deficit is $4.8 billion (add another $650 million for inflation).  That deficit amounts to about 13% of our budget. That’s a lot. State Economist Tom Stinson says this recession is expected to last 24 months - which would be the longest recession on record.
• For the biennium after that (FY 2012-13) the planning estimate predicts a $4.6 billion deficit (add another $1.5 billion for inflation).

By the way, in case you are confused by the $5.2 billion deficit announced in the media - that adds the FY 2008-09 and FY 2010-11 deficits together.

What people are saying

There is, and will continue to be, a lot of conversation on this issue. A great place to go for up to date information is the Budget Bites blog from the Minnesota Council of Nonprofits.

• Deficits: $426 million now, $4.8 billion soon and $4.6 billion later 

• Predictions of a $4 billion state budget deficit

Here are some additional news stories:

• Officials react to Minnesota’s dire deficit projection

• Budget deficit: Pawlenty remains oppposed to tax increases

• Minnesota’s red ink: $5.2 billion; Pawlenty seeks 10% spending cuts

• As Minnesota reels from a record deficit, leaders offer no specifics on recovery

• Op-Ed from Dane Smith (Executive Director of Growth & Justice)

• Minnesota Revenue Loss Pushes State $5.5 Billion in the Red

• Session of a thousand cuts: Thursday’s budget forecast sure to force painful decisions

• Looming Minnesota deficit offers chance to innovate

You can also visit the Minnesota Management & Budget website to see the state’s financial information, the November forecast, and get up to date on budget planning for FY 2010-2011.

What are our options?

The impact will be huge and felt across the state, in every community and every sector.  This figure represents 14% of the state budget.  Minnesota’s constitution requires a balanced budget, so tough choices will have to be made.

Where do we start?

• Budget Bites calls our attention to an article from 2001, Budget Cuts vs. Tax Increases at the State Level: Is One More Counter-Productive than the Other During a Recession? from the Center for Budget Policy and Priorities.

• A more recent article from CPBB outlines proposed budget cuts that would disproportionally impact those most vulnerable.

• Scott Russell at MinnPost weighs the relative merits of cutting rates or eligibility for health and human service organizations.

• Post your ideas and suggestions at Minnesota 2010 and elsewhere.

If you tweet or use delicious, I suggest tagging items as mnbudget. Let’s aggregate our ideas!

(My favorite tweet on this topic was from @dbrauer, who writes for MinnPost: “Seriously, we are going to need MPR’s budget challenge for this deficit thing. Stories today made clear cuts alone won’t do it.” For a bit of levity, check out the Budget Hero.)