I Have 12 Things to Say...

Thoughts, observations, and stream of consciousness* on the nonprofit sector in Idaho from INC's, Kevin Bailey.

Kevin Bailey with Mayor Art Bettge (Moscow) and Jaime Jovanovich-Walker (Palouse Land Trust)

1 – What is the financial risk to nonprofits losing government grants? On average, about one-third of total nonprofit sector funding comes from government sources.

2 – To break those numbers down further, a recent report by the Urban Institute identified that Idaho has 477 nonprofits that report (on their 990) receiving government grants (i.e., from any gov. source: city, county, state, federal). The aggregate total funding from government sources in Idaho is... 

​...over $643M annually.

3 – Let’s take a step back, however, and look at one of the reasons nonprofits exist in the first place. Nonprofits fundamentally exist at the intersection where market failures (e.g. where it is not profitable for business to venture) intersect with public ‘goods’ that government cannot fully provide (or shouldn’t provide). Two examples:

​4 – Rehousing a family that was recently evicted after a single parent lost their job: There isn’t really a profit motive for a for-profit company to enter the rapid rehousing space. Likewise, local government, while having a vested interest in keeping families housed, often doesn’t have the specialized skills (e.g. case management, social work, etc) to engage in such a specific focus area. Thus, nonprofits in nearly every community fill this role (see: CATCH).

​5 -  How about the arts? Is there a viable, profitable business plan that would compel private businesses to build and operate an art museum that brings world class exhibits? Normally, there is not. Similarly, while government has a vested interest in making the quality of life in their community as vibrant as possible, it is usually not in a local government’s best interests (b/c of revenue sources, other priorities) to own and operate a museum themselves. As in the case above, nonprofits step in to fill this role.

​​​6 – In both of these examples, government has a vested interest in ensuring that these two services are a part of their community: Keeping people housed keeps a community functioning at a high level and allows people to work and contribute back to their community and tax base. Ensuring a vibrant arts and museum culture in their community creates a sense of place that draws in and keeps residents and maintains a healthy tax base to, in turn, provide for other essential services (sewer, water, roads, etc). 
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7 - The arts also have a profound economic impact on our local economies, drawing in hundreds of thousands of visitors that rent hotel rooms, go out for dinner, and contribute to other sectors of the economy. A 2021 study by the National Endowment for the Arts states that there is a $2.2 billion value add to Idaho’s economy because of the arts. 

8 - $643M – that is the government investment in these types of nonprofit services in Idaho. A vast, vast majority of those dollars are federal in origin as very few state general fund dollars go to nonprofit programs and most cities are already operating on bare-bone budgets and have little left over for the sector. 

9 – Everything is interconnected. With the uncertainty around the future of federal grants and contracts at the federal level, nonprofits are in a tough spot. But it’s our communities that will suffer most – Less money for keeping families off the streets and out of their cars at night. Less money for world class art exhibits to make their way to Coeur d’Alene, Boise, and Idaho Falls. 

477 nonprofits in Idaho receive government grant funding totally over $643M

This means less money for restaurateurs and hoteliers, and less money in the city coffers from the parking meter to patch the potholes in front of your child’s school. It’s all connected.
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10 – Even if only half of government grants evaporate over the next few years, philanthropy on its own cannot make up the difference. Philanthropy should, indeed, do everything it can to fill as much of the gap as possible! But the result of a potential large-scale loss of government investment that nonprofits are facing is that our communities—and neighbors in those communities—will be worse off. 

11 – Hope and action. The good news is that we are not powerless. There is power in community, power in networks, power in advocacy. Nonprofits in Idaho are the fourth largest private sector employer (see: INC’s State of the Sector report).

If you are reading this, you are likely a part of the largest statewide network of nonprofits in Idaho via the Idaho Nonprofit Center. With over 800 members, let’s imagine that each of you have 1,000 or more followers/donors/subscribers in your organization’s orbit. That’s 800,000 community-minded Idahoans who care about their communities and can raise their voice to ask: What does our community need in order to thrive? Are we holding our decision makers accountable to the vision we have for our community?

12 – Results. Already we see the impact of networks. INC is a proud member (and, full disclosure, I serve on the board) of the National Council of Nonprofits (NCN). Last week, we saw the power of collective action as NCN was successful in getting a preliminary injunction on the federal funding freeze which will (for the time being) keep funding flowing into our Idaho communities for all the things that make our communities great places to live. 

*inspired by Tim O'Malley's work. Go Notre Dame!

​​Kevin Bailey, VP of Impact

​​Kevin joined the Idaho Nonprofit Center in July of 2021 after previously serving as CEO of the United Way of Southeastern Idaho. In his free time, he and his family love exploring the great beauty in the West by hiking, biking, and getting outside into nature. On Saturdays in the fall, you can find Kevin avidly cheering on his Notre Dame Fighting Irish football team!