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Thursday, January 21, 2021

Why Grant-In-Aid Funding Can't Be Chopped in Pending Budget Vote

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JBThe following was written by John Baker, the Executive Vice President of Policy and Programs for Delaware Alliance for Nonprofit Advancement (DANA).

The clock is ticking toward the General Assembly’s vote on Delaware’s budget: It’ll happen in the late and early hours of next Tuesday and Wednesday. Governor Jack Markell had a tough challenge in proposing a tightened 2016-2017 budget, which he based on the Delaware Economic Financial Advisory Committee’s (DEFAC) “2015 Projection of State Revenue Report December 2014.” An important part of that budget – whose fate hangs in the balance until Tuesday’s vote – is Grant-In-Aid (GIA) funding.

GIA is a significant component of the state’s budget for nonprofits/charities and for Delawareans who receive services from our vibrant nonprofit sector. The funding has become an important mechanism for the legislature to fund critical programs in Delaware. Whether it’s the school you and your children attend, the pet you adopted, the library you borrowed a book from or accessed the Internet in, as well as the cultural experiences you’ve enjoyed, and so much more – we count on our nonprofits.

We’ve had charitable nonprofits in Delaware and the nation since Benjamin Franklin started his libraries and fire companies. The nonprofit/charity sector of our society began a dramatic growth in the late 1980s and early 1990s during the federal and state government “downsizing” and “de-institutionalization.” Government recognized that it could partner with community-based nonprofits/charities to reach citizens more efficiently and effectively. Since then, the nonprofit sector has risen to meet this partnership demand, which has been a good business decision for governments, and has saved billions in tax dollars.

Thus, nonprofits have become important government partners, especially here in Delaware. The numbers prove it—here’s the breakdown of the $45.5 million total the state receives in GIA funding:

  • $22.6 million goes to “Government Units & Senior Centers”
  • $16.5 million goes to “One-Times and Community Agencies” – nonprofits/charities
  • $5.9 million goes to fire companies

The Joint Finance Committee (JFC) has received input from Delaware funders and foundation leaders over the last few years. As a result, the JFC has decided to strengthen the application process to include a greater outcomes mechanism, so the programs that are funded will have proven successful outcomes. It seems that over time the GIA will become a funding source with “strategic focus” based on the greatest needs of Delawareans at the time. The priorities may change year over year, but the organizations that can show the need and the most successful outcomes will continue to receive funding. The JFC sees this as developmental, in the way that other large funders have evolved to funnel their funding to the programs and organizations that can do the most good for our citizens.

As you may know by now, the DEFAC reports in March, April and May did not improve the revenue projections dramatically and the state has been left with an approximate $85 million gap to fill. The JFC has been charged with delivering a balanced budget to the General Assembly, and they have made various cuts to reduce the gap to $66 million. When the June 15 DEFAC report came in with a projected increase in revenue of $33 million, JFC was left with approximately $30 million to cut.

As of Wednesday we know that JFC made a cut to “Pass-Throughs” to nonprofits in the various department budget line-items. They also made official their intent to cut GIA by 5 percent when then they draft that bill next week. Our goal as a nonprofit sector over the past months, and more broadly over the years, has been to communicate the value of the partnership between government and nonprofits in delivering high quality, cost-effective services to all Delawareans. We believe that our elected officials have heard our message and value our partnership, but it doesn’t hurt to keep that message flowing.

In these last days of the General Assembly’s and Joint Finance Committee’s meetings, please continue to express your support of the nonprofits that you are passionate about, work for, volunteer with, and fund with your personal contributions. Here is a link to my blog with contact information for you to voice your support for the nonprofit sector and the great work of those you support:

http://www.delawarenonprofit.org/blogpost/953787/John-s-Public-Policy-Blog

 


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