Nickel & Diming Nonprofits

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Dateline Vermont:  if you work at a nonprofit that receives more than 50% of its funding from the state and you earn more than $60,000, there is a bill pending that would require you to take a 5% salary reduction.  (This money would go to a good cause:  it would stave off cuts so that seniors could continue to get their needed medication).

Dateline Maryland and the U.S. Congress:  there is a suspicion that nonprofit hospitals are not providing sufficient free care to those in need.  So, the Maryland General Assembly, as well as the IRS (along with a threat from Senator Grassley, the highest ranking Republican on the Senate Finance Committee, that if the IRS doesn’t do it he’ll introduce legislation) are considering ways to define how much charity medical care a hospital must provide in order to maintain its tax-exempt status.

Dateline Nevada:  The Nevada legislature is considering a bill that will require all nonprofits to register with the state and report how their money is being spent:  programs and services or other?  Oh, you mean like what we do on the Form 990?  Yes; and in fact, should the bill pass, you would need to include two pages from the 990.

At a time when many nonprofits are massively struggling–struggling to meet a growing demand with diminishing resources; struggling to stay alive; struggling through Chapter 11 bankruptcy–why are governments thinking about ways to nickel and dime nonprofits? thinking about ways to spend money to correct a problem that is, by most  estimations, found in less than 5% of nonprofits? spending money to duplicate the existing services of another oversight organization?

Let me focus on Vermont, as Patty O’Donnell’s bill is the first of these three proposals that I saw, and the one that had me seeing that jerking knee.  I’ve done the math and based on March 2008 data, Vermont legislators make $614.30/week during sessions, and an additional per diem of $54 for meals and mileage for commuters, while non-commuters (those who stay in Montpelier during the work week) get $137 for meals and lodging.  The Vermont legislature works Tuesday through Friday, anywhere from five to six months out of the year, bringing the salary of a non-commuting Vermont legislator to just under $28,000 for a six month session.  Now, before you go feeling sorry for these legislators, this is, after all, a part-time job.  And part of the reason it is part-time is because the legislators don’t want to work year-round so that they can get back to their real jobs!  Yes, a legislator’s state salary is only one piece of the income pie for many Vermont legislators.  Perhaps they are the ones who should be giving back to the taxpayers a chunk of their dollars.

My point here is not to bash Vermont legislators–or Maryland or Nevada or any of the other states looking at equally ridiculous ways to save money.  My point is to ask all legislators–whether federal, state or local–to really look at the implications of their suggestions to see what the value of the return will be and what the cost will be.  As I have said so many times, nonprofits for the most part were already running pretty lean and mean before the economy tanked.  But if there was an ounce of fat left to trim, they’ve already done that–and then some.  There just is no more skin to give and still have the ability and the energy to provide their services.

Patty O’Donnell said that at time when folks are losing jobs in the state, when people are so vulnerable, everyone must make sacrifices.  Nonprofits know what sacrifice looks like–in the eyes of their staff and their clients.  They’ve been making sacrifices for their entire existence.  Now is not the time to skin them again; rather, it is the time to set them up as a role model for all–for-profit companies, state legislatures, government offices–to follow.