Nonprofit uncertainties put community services at risk

Think, for a moment, of all that the rich constellation of nonprofits provides to our community. Food and shelter for those who need it. Support services for at-risk youth, veterans, young families, and seniors. Environmental conversation and arts programming and educational opportunities. These — and so many more services and amenities made possible through our nonprofit sector — are central to making Linn County the special place that it is.

Now, imagine what our community looks like if those vital nonprofits are forced to reduce or end their work.

Although the executive order that stopped federal funding in late January has been rescinded, its effects on the nonprofit sector have remained. To better understand the potential impact of these funding changes, the Community Foundation partnered with the United Way of East Central Iowa to survey local nonprofits. The findings highlighted significant concerns, with many organizations reporting that diminished funding could force them to reduce — or end — essential programs, affecting many services in our community.

According to the survey, two-thirds of nonprofits in Linn County receive federal grants or contracts, mirroring national statistics. For one-third of nonprofits, this funding is especially substantial, comprising 20% or more of these organizations’ budgets. Locally, federal funding to nonprofits helps to cover the costs of such essentials as Meals on Wheels, emergency shelter for those experiencing homelessness, rental assistance, veterans’ services, programs for at-risk youth, and much more.

The specific impacts of federal cuts vary among organizations based on the extent of government funding and the nature of the work funded. But our survey showed that the bottom line is the same: reduced funding ultimately means reduced services in our community — a particularly dire prospect at a moment when needs are increasing. The Gazette, for example, has reported extensively on rising food insecurity in our community.

And that’s separate from the business impact on the nonprofits themselves. In Linn County, just over one in 10 jobs are in the nonprofit sector, according to the Bureau of Labor Statistics. Many respondents to our survey of nonprofits described how funding cuts would force them to reduce their own staffing levels, thereby reducing their capacity to serve the community, putting dedicated employees out of work, and creating a drag on the local economy. The Catherine McAuley Center — to cite just one prominent example — recently laid off half its staff after recent cuts in federal funding to support refugee resettlement.

Philanthropy remains an essential component of the nonprofit ecosystem, but it cannot replace government funding. The Community Foundation awarded more than $12 million in grants last year — but government grants in Linn County were more than 10 times that amount, totaling nearly $130 million, according to data compiled by the Urban Institute. Historically, philanthropy and federal funding have worked hand-in-hand. For many human services nonprofits, for example, federal dollars provide ongoing program support, while philanthropy strengthens organizational sustainability and fuels innovation. Your support for nonprofits and the causes you care about is invaluable — but federal funding remains essential to sustaining the results our communities rely on.

Managing government spending is a balancing act, but reducing funding for essential community services will have significant consequences. Nonprofits play a crucial role in supporting our neighbors, and their ability to provide vital programs depends on stable funding. If you value the services these organizations offer, consider calling or writing to your congressional delegation to encourage their support of the resources that help sustain them. Nonprofits, and the people they serve, deserve our help.

Joe Heitz is vice president of community impact for the Greater Cedar Rapids Community Foundation.