Nonprofits Prepare for Sequester Cuts, Gridlock in Washington

Although automatic spending cuts triggered by the so-called sequester — some $85 billion in cuts from this year's budget and as much as $1.2 trillion over ten years — will spare many programs that help the most vulnerable in society, billions will be cut from programs that help low-income Americans, the New York Times reports.

According to an analysis by the Department of Housing and Urban Development, housing programs will be hit especially hard, with approximately 125,000 individuals and families at risk of becoming homeless. Popular programs administered by nonprofits, including Meals on Wheels and Head Start, are also likely to be affected. The Office of Management and Budget estimates that, under sequestration, Meals on Wheels will serve four million fewer meals to seniors, Head Start will help 70,000 fewer children, and some 373,000 mentally ill adults and children will be at risk due to cuts to the Mental Health Block Grant program.

In addition, the cuts will leave many nonprofits scrambling to plan for the future, as governments defer entering into new contracts with service providers, the NonProfit Times reports. "States are afraid to enter into contracts because they're afraid they won't be able to pay them," Tim Delaney, president and CEO of the National Council of Nonprofits told the NPT. "If you are a nonprofit with a government contract, you're going to be losing that revenue."

Although some experts predict that steps could be taken to modify the impact of the cuts in upcoming negotiations between Congress and the White House over a continuing budget resolution, nonprofits will have to deal with the immediate challenge of having less funding to deal with current needs and demands. "As we understand it, government agencies are now working on how the cuts will play out," Irv Katz, president and CEO of the National Human Services Assembly, told the NPT. "That leaves families and organizations affected out in the cold, perhaps literally."

Annie Lowrey. "As Automatic Budget Cuts Go Into Effect, Poor May Be Hit Particularly Hard." New York Times 03/04/2013. Patrick Sullivan. "It's Here. The Sequester Has Kicked In." NonProfit Times 03/01/2013.