WASHINGTON -- President Reagan's budget cuts deal a double blow to nonprofit charitable groups -- slashing their direct funding while increasing demand for their services due to other cuts, an Urban Institute study says.
Hospitals, social service agencies, community-based organizations, arts groups and other nonprofit organizations stand to lose $33 billion in federal revenues between fiscal year 1982 and 1985 as a result of the Reagan proposals -- a 20 percent reduction.
These losses, in turn, are part of a much larger reduction in domestic social spending totaling $115 billion that will increase the need for nonprofit services, the study said.
The new study, authored by Lester Salamon and Alan J. Abramson, is part of a continuing examination of the impact of the Reagan economic policy on the nonprofit sector.
In their study, Salamon and Abramson said that in recent years a kind of 'nonprofit federalism' has developed in which government at all levels has relied increasingly on nonprofit groups to help it carry out its responsibilities.
As that partnership has developed, however, the nonprofit groups have become increasingly dependent on federal funding to the point where in 1980, nonprofit groups received $40.4 billion in revenues from the federal government and only $25.5 billion in private contributions.
'The budget proposals advanced by the Reagan administration would sharply curtail these partnership arrangements,' the study said. 'Under these proposals the real value of federal support for nonprofit organizations would be 27 percent lower in fiscal year 1985 than it was in fiscal year 1980.'
It said some types of nonprofit groups, especially social service, community development and arts organizations, would be even more adversely affected, with losses in the range of 64 percent to 68 percent.
'For social service and community development organizations, these reductions in federal support would mean the effective loss of between one-fourth and one-third of their total revenue by 1985.
At the same time, the report indicated that unless there is a massive shift in the pattern of private giving -- by corporations, foundations and individuals -- there is little liklihood private philanthropy can fill the gap in lost federal revenues.
'To permit nonprofit organizations to offset the reductions in revenues they face and maintain their 1980 levels of activity, private giving to nonprofit organizations would have to increase by 24 percent in 1982, or twice as fast as it has ever grown,' the report said.
