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March 4, 2013 / Christian Clansky

A Voice from Philanthropy: What sequestration means for philanthropy

By Tamara Copeland
President
Washington Regional Association of Grantmakers

When the sequestration proposal was made in August 2011, no one thought that it would ever happen. The consequences were simply too dire.

Well, the sky has fallen. The automatic cuts went into effect last Friday, March 1st. Now what?

The obvious answer is that unless a budget compromise is reached – and reached soon – we will see the ripple effects that we saw a few years ago with the recession. Some of the impact will be obvious: lost jobs, increased need for food support, more foreclosures, higher rates of homelessness, and a spike in crime. We have seen this before. You’re already expecting it.

I want to focus on the hidden issues. Much of the impact connected to sequestration will be far less overt. The social worker in me says that as already stressed individuals deal with this reality, mental health-related incidents will also increase. There may be increased incidences of domestic violence, more emergency room visits and falling school performance as home environments become tense. Consider this article about the recession’s impact on our region’s mental health, written when our local economy was actually faring better than the rest of the country.

Because of our region’s economic connection to the federal government, we have known that we will be hit especially hard by sequestration. Our region’s funders will have to help ensure that basic human needs are met. But it is critical that we keep in mind the less obvious needs. A failure to support those, particularly mental health care, can lead to dire consequences.

So when is this likely to be resolved? Like the rest of the country, I wish I had a crystal ball. Of course, no one knows, but it has been suggested that we could be in this budgetary free fall at least until March 27th. That is the date that the current continuing resolution, the vehicle that allows the government to pay bills, ends. Congress has to act by then or the government will shut down.

Even though its demands will weigh heavily on philanthropy, sequestration isn’t even the major issue for our sector. Tax reform discussions are. These proposals could change philanthropy in a way that will have consequences for decades. The middle of April is scheduled to be a critical time in these deliberations. Look for a future post in the Daily WRAG for an exploration of tax reform.

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