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The ‘Fiscal Cliff’ threatens the work of non-profits to help those who need an extra hand

By Lilly Zeller

Tis the season to be jolly, as one popular Christmas song will note, but for the majority of non-profits ‘tis a season to be worried about falling off the “Fiscal cliff,” which could endanger the future of so many of our non-profit organizations.

This “Fiscal cliff” is a devastating mix of budget cuts as well as tax hikes slated for 2013. One threat is the spending cut to domestic programs. These cuts will inevitably increase the demand for more services to be provided by non-profits while it reduces funds for governments to pay contracts to the non-profits involved.

Puerto Rican cliff shows how a plunge over the side would be deathly.

There will be additional cuts to programs like food stamps, Temporary Assistance for Needy Families (TANF) and Medicaid, thus challenging even more of our non-profits’ participants and clients.

Many of the approaches being considered could have additional adverse impacts on the Third Sector organizations. Caps would leave very little room for discretionary donations to be made. Another threat is how Congress and the President will avert this “Fiscal cliff”; will it be permanently or a short-term fix?

All non-profits should be concerned about the decisions being made this month in Washington. After the election, there has been a lot of talk about changing the tax break Americans get for donating to charities. Organizations such as Community Foundations, Family Foundations and even United Way, have expressed that billions of donor dollars are at stake.

The tax break on charitable donations has found itself on the short list to get cut down. We have begun to see the impact of this “Fiscal cliff” already, where many non-profits are struggling to fundraise due to the slow recovery of the economy.

While many people will still give out of the goodness of their hearts, there is great concern within the non-profits that donors will not give as much as they would with a tax break. A variety of federally-backed programs could be at risk, such as the Ryan White Care Act, AIDS housing funding and the HIV prevention programs, just to mention a few.

Caps on charitable deductions could be lethal for many non-profits, adding to the struggles many of us have to endure to keep our doors open and provide services many need. Our organizations need the charitable giving incentive to continue with the ongoing work in delivering much needed services, enhancing quality of life of so many of our communities, as well as contributing to uplift the spirit of inspiration, innovation, and faith in our respective communities across America.

I don’t want to sound dreary and paint a gloomy perspective, especially at this time of the year, but the reality is that if our lawmakers in Washington, D.C. don’t strike up some sort of deal before the end of 2012, the automatic “across the board cuts” will go into effect starting on January 2, 2013. Lawmakers have less than a month to reach an agreement on arbitrary spending cuts to domestic programs and the tax hikes that will weaken many programs and services performed by our non-profits.

The slow economic growth has already adversely impacted the productivity and outreach of non-profits. We are already feeling an increased demand for services from non-profits in many states and even Puerto Rico. As a most recent example, the storm “Sandy” has brought devastation and great unexpected needs throughout many states. We must be aware that reduced giving will bring potential cuts to programs, operations and even the staff of our organizations.

Let us not forget that most of the funding our non-profits obtain comes from discretionary funding. A great number of non-profits as well as the people we serve will be in jeopardy if we fall off the “Fiscal cliff”.

What can we do?

We need to tell our lawmakers in Washington that they need to support our non-profits by taking a stand and help protect the Charitable Giving Incentives and oppose the arbitrary spending cuts related to non-profits

Several organizations are providing us with templates that can be used to address our lawmakers and tell the stories of our organizations. Various examples of templates for these letters can be found at: The Fiscal Cliff and Non-profits and Take Action: Protect the Charitable Giving Incentive.

We should also share the stories of our organizations and get as much media coverage of this to alert all stakeholders involved. The voice of the Third Sector is stronger when we work together and in solidarity. This is a moment to strengthen our advocacy.

We need to let all know how this “Fiscal cliff” will affect our organizations and the communities we serve. Help us spread the word about this to all the people you know.

On behalf of the many non-profit organizations serving and striving to make a difference, we thank you.

Latina Lista contributor Lilly Zeller is based in Puerto Rico where she represents the interests of the Third Sector via websites — Talking about Philanthropy and Third Sector Awareness. She can be reached at

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