Wednesday, October 14, 2015

Is your grants dept.ready for the election?

OK.   I can hear it now.

OMG!  Enough about the cotton-picking election already!

Seriously though, if your nonprofit depends on government grants, and even if it doesn't, now might be the time to put some "what-if" scenarios in place.

In case you are new to the world of grants, an awful lot of the funding tends to follow what's hot politically and tails off when it comes to what's not.

For instance, if the Democrats retain the White House, you can expect that all of the current funding for STEM, social justice issues and the like will continue and even accelerate.

Conversely, if the Republicans win, their pet projects will receive the bulk of the funding.

If you're saying "Well, we get all of our money through private funding" you still need to look ahead.

While it's unlikely that Dems would immediately get a 90% income tax rate in place, there is little doubt that the wealthiest Americans are going to take a hit in the pocketbook.

Who funds private foundations? The wealthiest Americans.

Of course all the politicians would love to have us believe that all of the "new" revenue streams they are cultivating will be immediately returned to the people in the form of better jobs, or free college, or a host of other voter-friendly  programs.

The truth is, it just never works out that way.

For one thing, there's that little thing called the national debt, currently headed north of 18 Trillion dollars.
It's a funny thing, but when people (or governments) lend money they usually expect to be paid back.

Interest payments on that money are forecast to eat up ONE TRILLION dollars in just five more years.

That's up nearly 5 times from $220 Billion reported for  2012. If we do in fact add all of the free stuff envisioned by the Democrats, the debt amount could double again in just ten years.

Not paying that amount isn't an option. Given that many of the current and proposed entitlement programs are forecast to grow exponentially simply due to having more users, it stands to reason that discretionary spending will suffer at every level.

No matter which party wins out in 2016, the funding landscape is sure to change in the next decade.

The nonprofits and small businesses that weather the storm will be the ones that plan for it now.

If you are just thinking of starting a nonprofit, it might behoove you to either wait a year or so, or at least run two opposing SWOT analyses before jumping in with both feet.

If you are an existing organization, you may want to factor in significantly higher costs and lower revenue projections when evaluating old programs and before launching new ones.

Another trend may be that local governments will be looking for revenue of their own to replace any missing Federal dollars.  That could lead to the repeal of many of the traditional nonprofit perks, including tax breaks for property used for charitable purposes.

In spite of the handwriting on the wall, many nonprofits will choose to wait to plan until it is too late.

Don't let your organization be one of those wringing your hands and holding "going out of business" sales.   

No comments:

Post a Comment