Government Funding & Small Nonprofits

It is appropriate that some government funding be directed to public needs that are best addressed by small nonprofits within the community; but it is incumbent upon the small nonprofit to develop a private funding base—preferably through small individual donations—for organizational stability.

Though it is difficult to raise funds privately, and all too tempting to just continue to rely on the relatively steady government funding—at least when budgets are high—it can cause irreparable harm to the small nonprofit whose mission is one that the community resonates with, and will support with their donations if asked effectively.

Unfortunately, too many of the groups that fall into this category do not develop a private funding base, and have to close when government funding dries up, which it often does.

This article from the Northwest Herald reports on one example.

An excerpt.

“WOODSTOCK – The McHenry County Latino Coalition has closed up shop, apparently for good.

“The coalition’s office closed at the end of October, although its executive director, Carlos Acosta, continued on until the end of the year. The coalition still exists as a nonprofit corporation, but it is not providing services and effectively has ceased to exist.

“The coalition was a victim of the recession,” said Larry Wilbrandt, an attorney for the coalition board.

“Wilbrandt said the coalition largely relied on state grants. Those grants dried up during the state’s fiscal crisis.

“Wilbrandt said the coalition probably officially would dissolve in the next two or three months. However, it is possible that the organization could be resurrected in some form someday, he said.

“Once the recession is over, it will come back,” Wilbrandt said. “The needs still exist.”

“The coalition provided various services, including immigration consultation and referrals to professionals who deal with immigration issues. It also provided counseling and outreach services for the Latino community.

“The coalition was one of the sponsors of the community resource center at Garden Quarter Apartments in McHenry, providing $10,000 in funding.

“Acosta, the public face of the coalition for several years, is working in the area as a counselor.

“2009 was not a good year for nonprofits,” Acosta said.

“Acosta said state or county grants accounted for about 80 percent of the foundation’s revenues. He said the coalition did not have a strong fundraising mechanism in place to offset the loss of grant money.”