As mission-driven nonprofits do more with less, collaboration ”“ or even merging ”“ should be considered before the recession gets worse.
That was the suggestion floated by Paul Trader, executive director of Rockland”™s Cornell Cooperative Extension and of its Institute for Non-Profits, to an audience of 150 at Rockland Business Association”™s monthly luncheon June 16 at the Patriot Hills Golf Club.
Trader also provided statistics to show for-profit businesses the income their own county nonprofits reap for their respective areas. In a report from Cornell University prepared in 2007 ”“ updated every five years ”“ total revenues of Rockland”™s nonprofits alone amounted to $779 million. Nonprofits spent $418 million within the county. Cornell estimated the total for the entire state to be more than $1 billion for the entire year.
“Since the Great Recession, nonprofits have been forced to cut programs and business,” said Trader, “since many rely on the state for funding. In Rockland, as in most counties, (the cooperative extension) does not deliver all the services needed by the public. It outsources them to other delivery agencies and that”™s where the not-for-profit community comes in. For every dollar spent on Head Start, for example, there is a seven-dollar to nine-dollar return on investment.”
The two percent tax cap will limit county funding and could conceivably pit health care agencies against other needed services, such as emergency and fire service. “These kinds of choices are being made at the state level as well. The largest of our three county nonprofits may lose $30 million in funding by 2012,” Trader told the group.
There are 2,100 nonprofits in Rockland, one-third of which have religious affiliations, Trader said, citing data from the Charities Bureau of the New York State Attorney General”™s Office.
“We also have 84 art groups and 60 ethnic and cultural groups. While each perform a vital function to their respective groups, with 1.5 million nonprofits nationwide, the economy can no longer support us.”
Rather than working harder, nonprofits should work smarter, he said. “Can organizations be combined to save money and consolidate services? The optimal time to do this is when your organization is strong, not when it is on the verge of closing its doors.”
Cornell Cooperative Extension has also felt the effects of the recession. Cornell has created eight regional business centers for the all of its individual offices to consolidate its administrative needs ”“ notifications, payroll and other operations that can be streamlined together and done under one roof rather than individually. Rockland, Orange, Westchester and Nassau counties will be merged into one region because of their proximity to New York City.
Trader also suggested that nonprofits work together. “The Alzheimer”™s”™ Association is partnering with Jewish Family Services. Others are doing the same thing. For-profits, such as Orange & Rockland, are working with the Rockland Family Shelter. This can and is being done with success.”
“Collaborations are not a panacea,” he said, “because they can often create more problems than they solve. Seek alliances where quality of life services are a good match and partners are eager to work together.”
Like all other businesses, whether for-profit or nonprofit, the MTA payroll tax has been a burden on the Cornell Cooperative Extension. “In our case, our MTA tax was $2,500 for the 2010 tax year, which Cornell paid for….but can they continue to help us?”
Cornell and the state provide 3 percent of funds for local extensions. The rest come from state grants and services contracted by the county government. “We are also a subordinate governmental agency. The two percent tax cap will reduce the amount of discretionary funds the county has been able to allocate. It will certainly affect all of us,” Trader said. “We don”™t know how the state can cap taxes but continue to pay its costs without other relief.”
