Fiscal cliff worries local nonprofits

Dec. 06, 2012 @ 07:10 PM

The looming "fiscal cliff" is a concern for many, including nonprofit organizations. 

The cuts that will be automatically enacted if Congress does not act before the end of the year include $54.6 billion from federal programs, according to the N.C. Center for Nonprofits. 

In North Carolina, the cuts would reduce Head Start funding by $13.4 million. 

Jenny McGuirt, executive director of Union County Community Action, did not have a any specific numbers dealing with budget cuts on Thursday. 

"Yes, it is a concern," McGuirt said. "I am guardedly optimistic that there will be an agreement reached in Washinton and that we will avoid the fiscal cliff, however, I do not have and I have not made any recommendations to our board of directors because I am simply unaware of where the cuts would be made." 

McGuirt has not spoken with any local legislators, but is following the debate in Washington. 

McGuirt and her management team began talking about a possibly 10 percent cut Thursday morning. However, she does not know where the cuts would be made to the program or how dramatic they would be. 

"Our last resort would be (discontinuation) of service to our children and families and layoffs of our staff would be a last resort," McGuirt said. "But, it is my hope that we can maintain services to the children and families in the Head Start program that we are presently serving." 

The N.C. Center for Nonprofits is also concerned about the proposals to cap itemized deductions, including charitable donations. 

"After years of a struggling economy, North Carolina's nonprofits simply do not have the capacity to continue to bear this additional burden," Jane Kendall, founder and president of the N.C. Center for Nonprofits said in a statement. 

According to the center, in 2011 93 percent of North Carolina nonprofits experienced an increased need for services and 58 percent were unable to meet those needs. 

"The proposed cap to itemized deductions, at $17,000 or $25,000 for an individual, would have the most devastating impact on the work of charitable nonprofits," according to a statement from the N.C. Center for Nonprofits. "Little or no room would be left under the cap for discretionary gifts to charitable nonprofits. Contributions to churches, synagogues and mosques would be included in the cap." 

McGuirt hopes that a solution will be found before the "fiscal cliff" is reached. 

"I am guardedly optimistic that our leaders will find some common ground and avoid the fiscal cliff," McGuirt said. "I'm certainly hoping that that happens because it is a real tisk for the families and children that we serve...we already serve an at-risk population. Any cut that is made to the Head Start program will put them at greater risk."