The Pittsburgh Foundation

The Pittsburgh Foundation makes statement

Pa. officials: Seize momentum on budget          
End nonprofit hostage-taking or share pain

Foundation president cites vulnerable groups

Pittsburgh, PA, Aug. 21, 2015 – With reports of a new proposal igniting negotiations to end a state budget stalemate that is now in its 52nd day, Pittsburgh Foundation President and CEO Maxwell King today issued the following statement regarding the effects on vulnerable populations and the nonprofits that deliver essential human services:

“We applaud the forward momentum that seems to be taking hold in Harrisburg on key budget issues, but we want to remind legislative leaders and the governor that it will be the most vulnerable of the state’s residents whose hopes will be dashed if that momentum does not lead to a compromise soon.  

This is the third time in a dozen years that county and nonprofit agencies – many that we fund to provide critically important social services – are now facing loss of their own financing safety net for lack of state funding. Even though today may mark a new sense of seriousness in the negotiations, costly borrowing and extra begging to donors are happening for agencies in Pittsburgh and across the state. The rest of us count on them to provide essential services, ranging from protecting abused women and children to providing emergency treatment for the mentally ill.

Regardless of the success or failure of the latest proposals, a final budget could be several weeks away, leaving nonprofits and the vulnerable populations they serve to fend for themselves.

It is morally reprehensible that the first hostages to be taken in these recurring budget battles are those most in need of basic assistance and services. They lack the political connections or financial resources to influence officials during a politically generated stalemate.

It needs to stop.

Once a compromise is reached on the overdue budget, we will be meeting with other community foundations across the state to focus on action to end a practice that effectively picks on those least able to defend themselves. 

No wonder that some organizations such as the United Way of Pennsylvania are so worried that they are calling for the governor and legislative leaders to approve a stopgap appropriation for human services. While the sentiment behind that effort is laudable, we aren’t ready to see human services funding resume at the level of cuts enacted in the previous budget.

The United Way position is based on a statewide survey conducted by the agency, the Pennsylvania Association of Nonprofits and six other organizations that found 50 percent of respondent organizations are facing cash flow problems now, and another 25 percent expect to have that crisis by mid-September.

 In southwestern Pennsylvania, the Greater Pittsburgh Nonprofit Partnership (an arm of The Forbes Funds, which is a supporting organization of our Foundation) has been advocating for nonprofits with legislators and providing regular updates on budget negotiations.

The Forbes Funds has partnered with Bridgeway Capital to create a bridge lending option for nonprofits whose finances are disrupted by the delay. The loans are short term and there is a 1 percent origination fee plus applicable fees and interest. For more information and to receive application forms, email Forbes Funds staff:

The bridge loan service is one of several being offered by philanthropies across the state, including the Berks County Community Foundation, which has partnered with Customers Bank to receive a $2 million line of credit to provide to nonprofits at low interest rates.

Finally, as we think about this situation, we believe this might be the right time to call for shared pressure and pain for state officials and residents.

We are advocating for legislative leaders to decline dipping into the special fund they’ve created from taxpayer money that allows them to continue paying themselves when regular funding runs out. And we call on Gov. Wolf and his staff and cabinet to join legislators in giving up their paychecks until a compromise is reached.

In addition, we believe this would be the perfect time for an executive order immediately closing all state-run wine and liquor stores until a budget is passed, so we all can focus on the concept of giving up things we believe we can’t live without.”