OUR THOUGHTS ON:

Pennsylvania Nonprofits' Concerns and Challenges

Not-for-Profit|Tax

By Elena Faurie

The Lincoln Institute for Public Policy Research and the Pennsylvania Association of Nonprofit Organizations conducted their 2016 Pennsylvania Charitable Organizations Survey in November.  A total of 177 nonprofit organizations responded to the survey.

Many of the nonprofits that responded to the survey expressed concern with the current public trust in charities.  Among the respondents, only ten percent said that public trust in charities is “high”, when 77% indicated it was “medium”, and nine percent rated public trust as “low”.  In addition, 31% of nonprofit executives said the level of public trust in charities has declined in the past few years.

2016 Pennsylvania Charitable Organizations Survey

Respondents expressed concern about Pennsylvania’s social and economic challenges, such as the state’s deteriorating business conditions and the impact of the pending new overtime regulations.  Visit our website for the latest update on the regulation - “The Final Rule for Overtime Suspended by Federal Judge”, posted on November 28.  Survey participants estimated that new overtime rules would increase payroll costs at 43% of the responding organizations and add expenses associated with tracking employee time.  Thirty percent of the participants indicated that they would be forced to cut staff, and 11% would be forced to cut services provided.     

The organizations also expressed concern over the state budget, because recently it has not been passed for long periods of time.  For example, there were seven consecutive budget impasses in Pennsylvania between 2003 and 2009, and another in 2015.  When the state government doesn’t approve a budget in a timely manner, the result is that many nonprofits struggle to pay their bills.  Sixty-eight percent of the respondents would favor a legislation that would penalize lawmakers for missing state budget deadlines. 

One of the growing concerns for the nonprofits is property tax exemptions.  Seven percent reported that their property tax exemption had been challenged in the last two years, and 13% are concerned that their local government may challenge their exemption next year. 

Additionally, by a two-to-one margin, nonprofits have seen state funding levels decrease over the past five years.  Federal funding has seen a slight drop as well.  Sixteen percent of the respondents report a decrease in federal funding in the last five years.  However, overall, more of the nonprofit respondents said funding for this calendar year has increased rather than decreased.  A third of the survey participants indicated that the funding is up, and a quarter reported that the funding has dropped in 2016.  

In general, the nonprofit leaders feel that they are well-positioned, along with the state government, to address Pennsylvania’s social and economic challenges.  

Please contact us if you have further questions regarding the topic and visit the Our Thoughts On blog for more articles pertaining to the not-for-profit sector.    

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