Forum paints dire picture for nonprofit funding

Pensions, benefits, bonded debt have skyrocketed over last 20 years

“We cut fat a long time ago. I think we’re really into the bone marrow now.” ADRIENNE COCHRANE, HARTFORD YWCA CEO, DURING PANEL DISCUSSION HELD BY THE COMMUNITY FOUNDATION OF EASTERN CONNECTICUT AT MITCHELL COLLEGE

New London — Keith Phaneuf doesn't think people realize just how bad Connecticut's “legacy of debt” is, or just how much it is impacting the nonprofit sector.

“It's kind of like saying, ‘Well, I heard your basement got flooded,' and somebody says, ‘What do you got, 3 inches, 4 inches?' and you say, ‘No, I got 4 feet,'” he said toward the beginning of a fast-paced talk that included equally dire metaphors.

Phaneuf, state budget reporter for The Connecticut Mirror, said that the private nonprofit sector is “caught between two problems of historic proportion”: the legacy of debt, and the growing gap in wealth and income inequality.

He was the keynote speaker at “A Time of Reckoning,” a panel discussion the Community Foundation of Eastern Connecticut held at Mitchell College on Wednesday morning.

CFECT had collaborated with five other community foundations in the state to award the nonprofit CT Mirror a $100,000 grant to support two journalism series, one “exploring the long-term impact of Connecticut's fiscal crisis on the nonprofit sector” and the other “exploring the impact of wealth disparities in Connecticut.”

Regarding pensions, Phaneuf noted the state wasn’t saving anything until about the mid-1980s, and that it wasn’t saving fully until about 2010.

Pensions for teachers and state employees, retirement benefits for state employees and payments on bonded debt went from making up 10 percent of the general fund 20 years ago to a third now.

Meanwhile, cities and towns are getting reimbursed less and less for things like payment in lieu of taxes.

Noting that he is speaking not from a political position but a mathematical one, Phaneuf commented, “Austerity will not cover the bill. You will run out of things to cut, and the bill will still be there.”

He noted that nonprofits are a popular target of cuts because they’re not fixed costs and can be cut quickly.

Not an appeal to raise taxes

While Phaneuf said his remarks were not an appeal to raise taxes, Community Foundation President and CEO Maryam Elahi directly asked, “Why aren’t we open to paying more taxes to address the basic rights of our population?”

Asked in the panel discussion if there is any fat left to cut, Hartford YWCA CEO Adrienne Cochrane replied, “We cut fat a long time ago. I think we’re really into the bone marrow now.”

One example she gave of addressing funding problems was the YWCA leasing part of its building to Covenant Preparatory School.

TEEG Executive Director Anne Miller noted that her social-service agency partnered with the Department of Children and Families to create a mentoring program that brought in revenue to fund programs, and a benefactor put solar panels on the roof to cut down on electric bills.

TEEG also employs a unique approach to its annual report, by utilizing a volunteer marketing firm and volunteer designer.

“One of the best things we can do is to not rely too heavily on state money,” Miller said. Even when there is state funding, New London Homeless Hospitality Center Executive Director Cathy Zall said, it’s challenging to get an equitable share of it.

Zall feels there isn’t much of the way in savings to achieve by consolidating agencies, though she did note that some agencies do things that aren’t effective.

“A lot of not-for-profits, in my observation, are not sufficiently sophisticated about evidence-based practices, about outcomes,” she said.

In looking at grant applications to the Chamber of Commerce of Eastern Connecticut Foundation, Chamber Vice President Amanda Ljubicic said she was surprised by how many of the small organizations asked for the same things, which gives the perception they’re doing the same things.

Miller pointed out that this may be in part because nonprofits write grants for what they think will impress or attract.