The Great Recession and its aftermath imposed significant burdens on nonprofits and the communities they serve, and many nonprofits are still struggling to meet the prolonged increased demands for services during a time of decreased charitable giving. The response of policymakers to the challenges in communities has been inconsistent. While some state and local governments continue to make budget and spending decisions that are detrimental to the work of nonprofits and the communities they serve, others have chosen to ramp up support for nonprofit services.

Why It Matters

Budget and spending decisions by governments affect all Americans and these decisions can have immediate and serious consequences for the people nonprofits serve and the communities in which they operate. Nonprofits work in every community, whether caring for returning soldiers, educating children, rebuilding cities, training the workforce, nursing the sick, supporting our elders, elevating the arts, mentoring our youth, protecting natural resources, nurturing our souls, and much more. As front-line providers of services and as organizations grounded in their communities, charitable nonprofits have a stake in the strength and well-being of the economy and of governments at all levels. Conversely, given the vital role nonprofits play in both the economic and social well-being of our nation, society has an equally strong stake in ensuring that our nonprofits are healthy and able to fulfill their missions in support of the public good.

Where We Stand

The National Council of Nonprofits opposes arbitrary and across-the-board budget cuts at any level of government and will work to inform policymakers of the impact of budget proposals on communities. When federal, state, and local revenue is reduced, nonprofits providing public services through grants and contracts with government typically receive disproportionate cuts. The Council of Nonprofits supports programs that promote volunteering activities that mutually benefit individuals and the people served through nonprofits, but opposes proposals to condition receipt of government-provided benefits on requirements that individuals volunteer at nonprofit organizations, a policy known as “mandatory volunteerism,” that impose increased costs, burdens, and liabilities on nonprofits by an influx of coerced individuals. The National Council of Nonprofits encourages all nonprofits to be meaningful participants in the state budget process. It will, as a network, engage actively in debates regarding comprehensive budget and tax reforms, encouraging solutions that improve transparency in the budget process, and supporting proposals that promote fiscal stability and growth, while ensuring that the work of nonprofits on behalf of the people they serve is sustained.

National Council of Nonprofits 2017 Public Policy Agenda

Top Issues

Tax and Budget Reform

States periodically reform their budget or taxing process.  The network of the National Council of Nonprofits works to ensure that these decisions do not disproportionately hurt the work of nonprofits and the communities they serve. This includes funding and spending levels for government programs performed by nonprofit service providers and also tax reforms that decrease charitable giving incentives.  Here you can find more on state tax incentives for giving.

Mandatory Volunteerism

Legislation has been introduced at the state level over the past few years that would impose a “volunteerism” requirement for individuals before they could receive such existing benefits as unemployment insurance, Medicaid services, SNAP (food stamps) assistance, and welfare benefits. This policy proposal, known in the nonprofit community as “mandatory volunteerism,” would require individuals to volunteer with a nonprofit for a certain number of hours per week in order to be eligible for certain government-provided benefits. Here you can learn more about mandatory volunteerism.

Taxpayer Bill of Rights (TABOR)

A Taxpayer Bill of Rights (TABOR) measure is a state budget and tax-policy process that limits growth of state and local revenues to a restrictive formula, such as capping total spending and taxing to the rate of inflation plus change in population. In the one state that has adopted TABOR, a public referendum is required to increase tax revenues past this formula. Revenue that exceeds the formula is “refunded” to taxpayers unless voters decide otherwise.

Additional Resources

• “State Budget Crises: Ripping the Safety Net Held by Nonprofits,” National Council of Nonprofits Special Report March 2010
• National Association of State Budget Officers
• Center on Budget and Policy Priorities