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AIDS Non-Profits Cut in San Jose
  County coffers force another hit upon local nonprofits
By Kurtis Alexander
Posted: 06/16/2009 01:30:12 AM PDT
SANTA CRUZ -- County leaders agreed Monday to a tentative 20 percent cut for dozens of organizations under contract to provide health and human services for local children, elderly and the poor.
The move, one of the first aimed at closing the county's $25 million budget shortfall, heightens doubts about the future of some of the area's most popular nonprofits, which rely heavily on government funds to operate.
"My advice is to look at the future and see how we can start coming together," said county Supervisor Tony Campos, suggesting that merging functions of many of these groups may be the only way to keep the services going.
Organizers in the nonprofit community, at Monday's budget hearing, stopped short of naming likely casualties in what's certain to become a survival of the fittest among local nonprofits. But leaders agreed all groups were hurting and that smaller, less established nonprofits would be the first to go.
Those providing child services, mental health assistance, substance abuse programs and HIV treatment, because of state cutbacks, would be at a further disadvantage, they said.
"The problem with nonprofits is there's not a lot of fat," said Karen Delaney, executive director of the Volunteer Center, one of the groups that relies on public funds. "When there is a financial downturn, there are typically not a lot of reserves. ... If you're looking a few years down the road now, yes, there will be fewer nonprofits."
The county's 20 percent cut for nonprofits, which will be inserted into the budget for final approval next week by the Board of Supervisors, is not the only hit the groups are taking. The city of Santa Cruz, which contracts with many of the same organizations, is looking at a nearly 40 percent cut for nonprofits over last year, while Watsonville is eyeing cuts upward of 10 percent.
Total local government spending on nonprofits, industry leaders speculated, would drop 20 percent or more in the fiscal year, which begins July 1. The total spent this year is $6.6 million, according to the county nonprofit coalition Human Care Alliance.
"We're talking big amounts that are not coming through for local agencies now," said Debora Bone, who heads the Cabrillo College Stroke Center and serves as a board member with the Human Care Alliance.
In addition to local reductions, cost-cutting moves by the governor also are expected to hit home. Cuts to the Healthy Families program, reductions to mental health funding, suspension of Proposition 36 payments for drug-abuse programs and elimination of money for HIV drugs would be among the most devastating, according to the county Health Services Agency.
Bone says the best-case scenario for most nonprofits now is simply holding the line, adding that's important because it's "hard to assemble something after you lost it." And, she says, nonprofits will have to hang on longer since recovery for government-funded groups lags the general economy.
"Things might start picking up in the private sector but it will take another year or so for things to improve for nonprofits," she said.
Behind the economics are thousands who depend on the more than 60 nonprofits that partner with the county. The county is required by the state to provide many health and human services, and contracting them out is often easiest.
Sara Coil, a single mother in Ben Lomond, is concerned about the cutbacks. Having been out of work because of health issues, she turned to the Community Action Board of Santa Cruz County Inc. for help paying rent.
"I made some very poor choices in my young adulthood," Coil said. "Had it not been for their help I would have lost our house."
The head of the Health Services Agency, Rama Khalsa, said Monday that as the nonprofit community downsizes, she hopes to see the larger nonprofits start assuming the responsibilities of some of the smaller ones.
"Rather than see the nonprofits close," she said, "we need to see if there's some way they can merge."
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