PA Charities Getting the Job Done

But many challenges face non-profits in the New Year

This is the time of year when many people think of charities and are most likely to give of their time, money or talent to a charitable organization.  But for those who run charities, the challenges facing them last throughout the year.  The good news during this, the season of giving, is that more Pennsylvania charities feel they have a greater ability to fulfill their organization’s core mission than they have in recent years.

Results of the Lincoln Institute’s 2006 Pennsylvania Charitable Organizations Survey conducted in conjunction with the Pennsylvania Association of Nonprofit Organizations (PANO) found 33% of the non-profits surveyed feel they are better able to fulfill their mission than in past years, while 15% voiced concern that they are less able to do so.  A plurality of organizations, 49% said they have about the same ability to successfully do their job as they have had in past years.

Funding, of course, is a critical issue for charitable organizations.  Among those responding to the survey, 37% said their funding for 2006 was about the same as that for 2005.  Thirty-two percent of the non-profits said they raised more money this year than they did in 2005, while 27% reporting having secured less funding.  Looking ahead to 2007, 45% expect funding levels to remain constant while 28% are projecting revenue increases, and 20% expect to see their income decline.

Scandals involving a number of high profile charities have rocked the non-profit sector in recent years even while non-profits have responded in a major way to such disasters as the September 11, 2001 terrorist attacks and the gulf coast hurricanes of 2005.  A majority of Pennsylvania charity executives say they believe public trust in the sector to be “medium,” while 18% say public trust in charities is high, and only 6% rated trust levels as being low.

Joe Geiger, Executive Director for PANO found indications in the survey that charities tend to assume higher scores for effectiveness and accountability than those indicated by the general public.  “Charities will be challenged in the upcoming year to do a better job of telling their stories to the general public as well as other audiences if necessary support is to be available,” Geiger said.  “Most charities are doing terrific work in raising the quality of life in communities.  The survey indicates there is a lack of understanding of this issue.”

Lobbyist Registration

A major new challenge facing the sector in 2007 will be dealing with Pennsylvania’s new lobbyist registration act.  Charities rarely come to mind when the word “lobbyist” is mentioned, but the fact is many charities receive at least a portion of their funding from government at some level.  In order to secure that funding representatives of the charity must interact with government officials, in effect making them lobbyists.

The Lincoln Institute/PANO survey asked those working at Pennsylvania non-profits if they thought non-profit organizations should be required to register as a lobbyist if they interact with the federal, state, or local governments or if they should be exempt from such requirements.  A majority, 52% said charities should be exempt from registration requirements, while 30% thought they should be required to register.

When asked if anyone from their organization has registered as a lobbyist under the Governor’s Executive Order governing lobbying of the executive branch of state government, 87% said they are not registered, only 3% have done so.  When it comes to registering under the current rules of the state Senate, again 87% said they are not registered, 2% have registered.

The new Pennsylvania lobbyist disclosure law is not well understood by the non-profit sector.  Sixteen percent said they have reviewed the law and understand its provisions, 74% said they do not understand the law or have not yet investigated how it will affect their organization.

In terms of actual lobbying activity, 19% of the non-profits responding to the survey said they have lobbied the federal government on a public policy issue during the past year, 29% have lobbied state government and 21% have lobbied county or municipal government.  Thirty percent said they plan to lobby government at some level in 2007.

Health Care

Just like any other type of business, non-profits are struggling to provide quality health care coverage to their employees.  Eighty-three percent of those responding to the Lincoln Institute/PANO poll said they provide health insurance coverage to their employees.  At 39% of the organizations the employer reports paying the full premium for health insurance coverage, less than 1% requires the employee to pay the full premium.  At 43% of the organizations premium payments are split between the organization and the employee.

Health insurance costs this year went up for a majority of the charities surveyed.  Fifty-one percent of the charities surveyed said their health insurance premiums had increased up to 25%; 7% said health insurance premiums went up between 25 and 50%.  In order to reduce costs, 18% of the non-profits organizations responded by changing insurance companies, another 10% began requiring employee contributions to the plan, 10% increased co-pays and 8% increased deductibles.

The high cost of medical malpractice insurance has caused a number of doctors and other health care professionals to either close their practices or to cease offering high risk care.  Ten percent of the non-profit organizations participating in the 2006 Pennsylvania Charitable Organizations Survey said they had any employee complain about being unable to receive medical care due to such cutting back of service as a result of medical malpractice insurance costs.

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