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Maine Non-Profits Feeling Pinch from Sequester Cuts
03/27/2013   Reported By: Jay Field

Any chance that politicians in Washington might revist those $85 billion in automatic spending reductions known as the sequester disappeared yesterday, when President Obama signed a stop-gap bill to keep the government running through September. Non-profits in Maine that provide a wide array of services are beginning to be hit by the cuts. As Jay Field reports, the loss of funding comes as a national survey shows a continuing trend of non-profits being asked to provide more services with fewer resources.

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When non-profits, large and small, need a loan or some strategic advice, they often go to the Nonprofit Finance Fund. For the past five years, the fund has released a survey on the overall state of the non-profit sector in America.

The 2013 report, out this week, interviewed more than 5,900 organizations. Respondents are facing lots of different problems. But one, says Anthony Bugg-Levine, stands out. Bugg-Levine is CEO of the Nonprofit Finance Fund.

"The demand for services goes up and the ability of organizations to raise the money they need to pay for those services does not meet the increased demand," Bugg-Levine says.

Grants from foundations and private sources have rebounded somewhat since the height of the recession. But in the survey, 47 percent of non-profits reported receiving funding from state and local government contracts in 2012.

Those payments have shrunk in recent years. And when they do come, they're often delayed. Twenty-nine percent of non-profits also got federal funding last year. And now, Bugg-Levine says that revenue stream is at risk too.

"The sequester will be hitting a sector that is already skating on very thin ice," he says. "Even in good years, very few non-profit organizations put away money, or are able to put away money, to build up reserves that allow them to survive the lean years."

Consider the situation at Spectrum Generations, one of five aging and disability centers in the state. Spectrum provides community dining, meals on wheels, family caregiving, Medicare couseling and other essential services to seniors in a six-county swatch of Central Maine.

It's able to do this thanks to the federal grants it gets under the OAA, or Older Americans Act. But under sequestration, CEO Gerard Queally says Spectrum is losing a little over $100,000 in funding from Washington.

"I wanted to give the community enough time to understand the change. So I pushed this letter out to my staff, to my board of directors and to the community at large on March 15th and basically gave a two week notice," Queally says.

Queally says the service cuts are already hitting vulnerable seniors in Maine - the nation's oldest state. Spectrum has cut back hours at its community centers in Somerset, Knox and Waldo Counties.

"We've had to cancel our community dining subcontracts. So we won't be able to fund some of the community dining that's going on up in Jackman, Maine, or Rockland," he says.

Queally says 4,200 Meals on Wheels will be cut for shut-ins and 2,200 fewer seniors will be able to get health insurance and other types of counseling.

Brenda Peluso says cuts are taking effect in lots of other areas too. Peluso is director of public policy at the Maine Association of Nonprofits.

"We're starting to hear from some of our members that they're needing to close programs, lay off staff, in order to meet some of the reductions that are coming through because of the sequester," she says.

Peluso says many of the organization's more than 780 members were hoping that Congress would come up with a solution to walk back the cuts. But that possibility took a hit this week, when President Obama signed legislation to keep the government running through September. That bill keeps the $85 billion in spending reductions in place.


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