Area nonprofits navigate uncertain government funding landscape

Amy Blansit: The Drew Lewis Foundation is working to expand its donor base.

As federal funding battles play out in Congress and courtrooms, local nonprofit organizations are finding creative ways to navigate the uncertainty.

Federal spending is roughly $26 billion behind the expected pace for this year, according to department budget reports published in September. Meanwhile, a survey by D.C. think tank The Urban Institute published in October reports that a third of nonprofits nationally experienced at least one type of government funding disruption during the first six months of this year, including funding loss, delays, pauses, freezes and stop work orders. In Greene County, local nonprofits say they are feeling the pressure.

“The lack of clarity is really hard, particularly on small nonprofits that don’t have large staff to stay on top of these changes all of the time,” said Winter Kinne, President and CEO of Community Foundation of the Ozarks Inc. 

‘Roller coaster of a year’
Local nonprofit organizations have varying degrees of reliance on federal funding, leading to a range of outcomes. Kinne said CFO launched a rapid response grant this summer for quick and flexible fund disbursement, nothing that a positive investment market has created a favorable landscape for philanthropic grant funding.

Additionally, Kinne cited the April decision by the Department of Justice to terminate National Court Appointed Special Advocates Association funding, leading to a $95,000 loss for CASA of Southwest Missouri over a three-and-a-half-month span.

Per Executive Director Laura Farmer, CASA received an email mandating they cease all DOJ grant-related services immediately. CASA supports community volunteers who advocate for abused and neglected children in the court system.

“These are lives,” Farmer said. “These are children who are depending on us. We’re not going to serve them one day and then the next day say, ‘You no longer have access to an advocate.’”

During the months without DOJ funding, Farmer says CASA engaged its donor and volunteer network to secure operational funding for active cases. In July, funding was restored, but Farmer said they are still leaning on their volunteer network and the community at large to help serve the 57 children entering foster care each month in Greene County.

At The Drew Lewis Foundation, Inc., advocates work to reduce poverty through myriad efforts including the foundation’s Reaching Independence through Support and Education financial skills program and its Blue House Project homeownership effort. CEO Amy Blansit said she feels secure about the organization’s finances for this fiscal year, in part because of early efforts to diversify the foundation’s funding model.

“We heard the campaign messages of our current administration, so we began to divest ourselves from federal funding sources two years ago when we saw that this was a possibility,” she said. “In the nonprofit world, dynamics can change so quickly, so you can’t wait until they happen to figure out what you’re going to do. You have to always be predicting based on what could be happening in a year or two.”

Blansit said the foundation had the potential for additional government appropriations of up to $200,000 this year. As the funding worked its way through the legislature, it faced several roadblocks, so Blansit said she and her team started seeking those funds elsewhere. She said they raised 75% of those funds through private trust funds and family foundations, and by a “cobbling together of multiple grants,” they raised the remaining 25%.

Blansit similarly notes that the foundation is working to increase its donor base. Meanwhile, some of the Drew Lewis Foundation’s regular grantors have offered additional funds in recognition of the volatility facing nonprofits. She even hired a full-time grant writer to pursue non-federal grants, boosting the foundation’s monthly applications from two or three to eight.

Additionally, the foundation is focusing on advocating with state lawmakers. “The partnerships we build with state representatives brings tax dollars back to Springfield, and that helps build resiliency in our Greene County residents,” Blansit said.

Is philanthropy and private donation enough to replace taxpayer dollars? At OACAC, the Ozarks Area Community Action Corporation, officials say all programs are fully funded at this time. However, that hasn’t stopped the organization from looking ahead after it experienced temporary funding disruptions over the spring and summer.

“We write for local foundation grants and take donations, but to provide the services we offer, we rely primarily on federal funds,” said Lindsey Dumas-Bell, communications and development director at OACAC. “It has been a roller coaster of a year.”

Along with the OACAC board of directors, the organization is conducting scenario planning based on various funding levels, coding situations as green, yellow and red based on level of urgency. OACAC is leaning into partnerships as well, but officials say the size and scope of some programs simply can’t be replaced with a short-term grant. “If we lost our Head Start or our (Low Income Home Energy Assistance Program) budgets, there’s really no other grant that’s going to make up for that – that budget is in the millions,” Dumas-Bell said.

For the Child Advocacy Center, half of its $3.2 million operating budget comes from federal funds, said Executive Director Katiina Dull, and 90% of those funds are directed toward the center’s primary program: forensic child abuse and neglect investigations. About 25% of the center’s remaining revenue is program-generated (the Missouri Department of Public Safety reimburses medical exam costs), and the remainder of funds come from donors. Although Dull said Child Advocacy Center has lost only 3% of its federal funding this year, new state-level tax policies are contributing to funding uncertainty.

In August, Missouri House Bill 594 eliminated capital gains from income taxes. “That is often a key component to a nonprofit’s private fundraising strategy,” Dull said. “Those high-wealth individuals look to mitigate their tax liabilities, and as those liabilities decrease, it can be harder to make the case for where to give their dollars.”

However, programs like the Missouri Champions for Children Tax Credit can be an alternative incentive for potential donors. Donors who give $100 or more to qualified CASA, child advocacy or crisis care centers receive 70% of their donation as a tax credit. “In the past, these credits were only 50%, but we received an increase to 70% this year, which is a huge benefit to our donors who want to reduce their tax liability while also supporting children in foster care,” Farmer said. “We’re optimistic that our tax credit options will encourage the community to give this holiday season.”

Increased needs
No matter the survival strategy, nonprofit organizations emphasize that they are still finding ways to provide their services. This is especially important, they note, as their service populations face increasing insecurity because of halted Supplemental Nutrition Assistance Program benefits (also called food stamps, which are slated to pause in Missouri starting Nov. 1) or higher health care costs. For example, the Commonwealth Fund health care think tank estimates that when pandemic-era extra tax credits expire at the end of this year, some 60,000 Missouri residents would become uninsured, while premiums would go up by $720 per year for enrollees benefiting from the tax credits. 

“As costs go up and benefits decrease, we certainly see an uptick of people coming to see us,” Dumas-Bell said. She notes that while the type of aid requested has stayed the same, the amounts have increased. “In the past, someone may have needed $500 or $600 for rent, and now it’s more like $900 or more,” she said. To continue providing services as costs increase, Dumas-Bell said OACAC is closely examining how to most responsibly utilize its funds.

At Child Advocacy Center, Dull similarly expects an increase in cases as social safety nets fray. “Sadly, what we see when we have economic hardship within families is a ripple effect of increased crisis in homes, increased levels of neglect, and increased levels of physical abuse.”

To meet the anticipated growth in case numbers, Child Advocacy Center is moving forward with its relocation plans, as previously reported by SBJ. “It does feel a little counterintuitive to take on an $8 million capital campaign amidst this uncertainty, but we are not going to be able to meet the needs of the most vulnerable children in our community that we anticipate coming over the next, six, 12, 18 months as those ripple effects continue to work their way down through our community,” she said. “And so we felt like the only choice was to continue to move forward.”

The campaign has secured over $5 million of its $8 million goal, and the funds will go towards the purchase and expansion of a new location at 1414 W. Elfindale St., long-term child-abuse prevention programming, general operational costs, and increased staffing to serve a higher case load.

As nonprofits enter the holiday giving season, both Kinne and Blansit also emphasize the need for telling a compelling story. The 2017 Tax Cuts and Jobs Act increased the standard deduction, and this year’s House Bill 1, also called the One Big Beautiful Bill Act, increased the deduction yet again. Nonprofit leaders say that with less need to reduce their tax liability, some individuals are disincentivized from donating. Additionally, tax data under the new act fails to capture smaller-dollar donations, making it harder to track the state of giving.

In the absence of clear numbers, Kinne said nonprofits have to focus on connecting with their audience. “You have to find your people, the people who are deeply passionate about what you do, and continue to share the stories of why that’s important,” she said.