Tight government budgets may undercut nonprofit funding
October 29, 2009
As fragile economic times linger, organizations that depend on donations are feeling the financial squeeze.
And in this budget season, towns and Grand County are weighing their support for such organizations in the face of sales and use tax declines.
“The trend of Colorado this year is that nonprofits are trying to be conservative in their budgets, cutting back about 25 percent,” said Executive Director Megan Ledin of the Grand Foundation, the Grand County organization that supports local nonprofits through funding, grant-writing classes and bookkeeping assistance.
This year across the state, she said, nonprofit organizations are seeing 34-40 percent less in contributions.
In Grand County, there are more than 140 registered nonprofits, and nonprofits account for about 7 percent of businesses statewide.
“We’re promoting collaboration this year,” Ledin said.
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One way nonprofits can save is to team up with a similar organization and share office space, supplies and employees. “There are nonprofits out there doing that,” Ledin said.
Govenments cutting back
Meanwhile, towns accustomed to making grants to organizations are approaching budgets prudently this year, balancing basic operations of government with supporting quality of life goals.
Town officials at Grand Lake, Granby, Fraser and Winter Park already have talked about cutting back contributions by 20 percent in some areas.
“Revenues are down all the way around,” said Grand Lake’s finance manager Gay Dzinski.
The town is seeing 11.5 to 12 percent less in sales tax this year through August.
“There is not a lot of excess cash,” Dzinski said. “And our prime function is to operate the town.”
In recent budget talks, town board members talked of focusing donations to those nonprofits that support basic human needs.
“Individual donations are down for the year,” said Mountain Family Center Executive Director Jill Korkowski, of the organization that focuses on food bank distribution and other household support.
“The money is down, but support in volunteerism and donations of canned food are up.”
Yet, the nonprofit has been “really fortunate with Colorado foundations,” Korkowski said, to keep programs functioning. As the holidays approach, Korkowski is optimistic cash donations can improve.
“The community support we get is really amazing,” she said.
Grand Lake is weighing whether to fund a particular recreation nonprofit, the Headwaters Trails Alliance, with the prospect of a trail connection from Granby to Grand Lake now more possible than ever. In the past, the town supported trails that reach from Winter Park to near Granby, and for this reason, Winter Park and Granby are talking about funding Headwater Trails to help Grand Lake in its turn.
For several years, Fraser has opted not to support nonprofits, leaving contributions to a select few singled out collectively by towns and the county as necessary to all communities, such as the Grand Beginnings that supports child-care facilities, the Housing Authority, which supports affordable housing for the workforce and senior citizens, and the Headwaters Trails Alliance with its goal of connecting all Grand County towns with a trail system.
But with Fraser facing an 18 percent decline in sales tax revenues over last year, and a building/vehicle use tax revenue decline from about $600,000-plus in 2007 to $55,000 projected in 2010, town board members may be putting a squeeze on even those organizations.
Winter Park’s real-estate transfer tax brought in more than $2 million in 2007. This year, that total won’t reach $300,000, according to Town Manager Drew Nelson. And sales tax this year is about 12 percent down from last year, he said.
Meanwhile, Winter Park has $150,000 in requests for donations from a variety of nonprofits.
Last year, Winter Park gave $123,000 in community grants and another $100,000 to the new recreation center project. This year, “We will reduce that number significantly,” Nelson said. “I know that council is looking at ways to shave portions of the budget.”
At Granby, sales tax remains steady but building use tax has dropped to less than half of what it generated in 2007. In its draft budget, Granby has set aside a total of $6,125 for community donations, to be dispersed in a manner the board chooses during budget decisions.
And in Kremmling, “We aren’t financing any requests from anyone,” said Kremmling Town Manager Ted Soltis. “We just don’t have the revenues.”
The town’s main source of revenue – sales tax – is down this year to-date by about 11 percent. Town revenues calculated per-person in Kremmling are a lot less than the resort areas, Soltis said.
In 2009, Grand County doled out $189,000 to nonprofit causes, including a $50,000 one-time grant for the Kremmling Library remodel. This budget season, commissioners have not yet determined what that total will be compared to past years.
One factor that is known, “The economy isn’t getting any better,” said Accounting Director Scott Berger. “We’re very concerned how the revenues will come in this year. It’s a very tight budget.”
Town and county boards will be finalizing budgets through the month of November.
– Tonya Bina can be reached at 970-887-3334 ext. 19603 or e-mail firstname.lastname@example.org.