Philly nonprofits: how is the state budget impasse affecting you?

The deadline to pass a state budget is now more than a month past, and Republican lawmakers and Governor Tom Wolf appear no closer to coming to an agreement.

Besides the bad press for the state, the impasse could have a negative impact on Pennsylvania’s nonprofit sector in the form of delayed payments for social services.

The 2015-2016 fiscal year began on July 1, which means all payments to vendors or grantees will now be delayed until a budget is approved, according to a state FAQ page on the budget impasse.

Nonprofits could start feeling the pinch as early this month, according to the Forbes Fund, a Pittsburgh-based nonprofit.

How exactly the sector will be affected is uncertain. Nonprofits depend on state funds to varying degrees. They may also be more or less prepared to ride out any delay in payment.

In order to get a better read of the sector, the United Way of Pennsylvania has put out a survey that asks nonprofits a number of basic questions about how the impasse is affecting their financial situation and ability to administer services. The survey is available here, and must be submitted by August 12.

The plan is to use the information to make the case to state lawmakers that a budget needs to be passed soon to avoid essential services being deprived from those in need.

United Way put out a similar survey in 2009, during another state budget impasse. The survey found that more than a third of respondents reported that they had no back up funds to hold them over through the crisis. Almost 50 percent reported that the lack of reimbursements hindered their ability to pay their employees. The results were used in a massive advocacy push by the sector in late August of that year.

Even now, nonprofits are preparing for the worst.

“Anecdotally, organizations are taking valuable time to make contingency plans for service delivery rather than focusing on vision-related solution-finding at a community level,” said Anne Gingerich, executive director of the Pennsylvania Association of Nonprofit Organizations, which is helping administer the survey.

“We need the Governor and the legislature to get a budget passed to avoid interruptions in health and human services which directly impact the well-being and safety of not only those who receive services, but the whole community.”

The Greater Pittsburgh Nonprofit Partnership and the Forbes Fund have prepared a list of recommendations for nonprofits to help them soldier through the impasse:

1. Delay non-critical purchases in order to preserve cash.
2. Consult with your bank to update your line of credit.
3. Consult with funders to ascertain potential for receiving cash advances.
4. Delay expansion plans until after the budget is passed.
5. Hold open positions where possible.
6. Call your legislators to let them know the critical need for timely passage of the budget.

For more information, see the Greater Pittsburgh Nonprofit’s breakdown of the impasse.

Image via Tom Wolf on Flickr