Connecticut nonprofits are feeling the squeeze as state support is apt to fall well below anticipated cost of living increases.
“We’re being strangled slowly,” said John Ferrucci, executive director for the South Park Inn, a homeless shelter in Hartford. “Truthfully, if something doesn’t happen, we’re going to have to cut services or have to cut employees. There has been talk of reaching the bottom of the barrel. Well, we’ve reached it.”
The priority of the Connecticut Association of Nonprofits, which represents more than 500 organizations statewide, is to seek legislative support for cost of living adjustments in the current session.
The association requested a 9 percent increase in state aid to nonprofits that are contracted health and human services providers. But the latest budget proposal has cut the increase for contracted health and human services providers to 1 percent.
Nonprofits employ roughly 165,000 people, or 11.8 percent of Connecticut’s workforce, according to the state Department of Labor. Nonprofit employees earn about $6.5 billion in wages annually, or as much as the state’s construction industry.
“The operating expenses have gone up between 4 and 6 percent each year and we can’t keep up,” said Ron Cretaro, the association’s executive director. “Nonprofits are like regular businesses, but they can’t move money around as easily to balance budgets.”
While for-profit companies have the option to raise prices to raise revenues to cover rising costs, social service nonprofits serving clients living in poverty generally don’t have that same option. They have to turn to state aid and donors.
“Many nonprofits have very generous people and companies that help them out, but it’s not a bottomless ocean of money we can dip into,” said Ferrucci.
Ferrucci and Cretora see a glimmer of hope. The appropriations committee recently passed a bill that would allow employees of municipalities and nonprofits to join the state employee health insurance pool. That move, called the Connecticut Healthcare Partnership, could mitigate the rise in health care costs for nonprofits and their employees.
