Nonprofits seek ways to serve more people with less funding

Correction: A previous version of this story mislabeled one reference to Medicaid

Even as nonprofits that provide human services see demand increasing, public funding to help those groups is dropping.

What are the nonprofits to do?

Merge. Close shop. Search for more private funding. Cut costs by sharing such things as accounting, purchasing and human resources.

Those were some of the possibilities and topics discussed Tuesday as about 50 area organizations and a panel discussed the financial difficulties during the semiannual nonprofit policy summit sponsored by Wichita State University’s Hugo Wall School of Urban and Public Affairs.

“It’s depressing and hard news to hear,” Sedgwick County Manager William Buchanan, one of the three panelists, said during the meeting at WSU’s Hughes Metropolitan Complex.

The county provides $32.1 million annually to 68 nonprofits that deal with human services, Buchanan said. Even so, the county has had to say no to other agencies or reduce the amount to those it does help.

But the amount of state money the county has received to distribute to nonprofits has also been sliced.

From 2008 to 2011, Buchanan said, what was then known as the Department of Social and Rehabilitation Services cut its funding to the county by 27 percent, or $1.75 million. Medicaid waiver money for that period was reduced 32 percent, or $3 million.

And that’s only a start.

The 35 nonprofits that the United Way of the Plains helps fund will be hit with a 6.3 percent cut – or about $3.2 million – in public money in 2012, said Beth Oaks, vice president of community planning and resources for the organization.

“You’re going to have to constantly evaluate your effectiveness,” Oaks told the group. “Prioritize programs that are being done. Look at how you can collaborate with others.”

She noted there are more than 2.2 million nonprofits in the United States, excluding religious and educational groups. There are more than 18,000 in Kansas.

“Some of you are going to have to look at mergers or potential closures,” Oaks said. “I know that’s not what you wanted to hear.”

Sharing the cost of such expenses as information technology services, accounting, purchasing and human resources could also go a long way to help some smaller agencies save money, she said.

Robert Roswurm, developmental director for the Kansas Masonic Home, said churches are a “huge untapped funding source.”

He said it’s important for nonprofits to build relationships with churches and others in the faith community because they may be very interested in helping a particular agency’s mission.

Financial ramifications of Medicaid expansion and whether it’s allowed to happen in Kansas also was a hot topic.

The Affordable Care Act calls for Medicaid to cover an additional 16 million people nationwide in January 2014. The expansion eligibility requirements would mean about 141,000 Kansans would be able to join Medicaid.

The U.S. Supreme Court in June ruled that states have the option whether to take part in that expansion. Gov. Sam Brownback has said he’ll wait until after the Nov. 6 elections before deciding.

The state’s new KanCare program, which will use three private companies to manage the care of Medicaid recipients after Jan. 1, calls for slowing the growth of the state’s Medicaid expenses from 7.4 percent to 6.6 percent.

“As we know, once someone gets something, it’s very difficult to pull back,” Lea Stueve, legislative and policy director for the Kansas Department for Aging and Disability Services, told the group. “We’re trying to slow the growth of the program. If we add all these additional folks, it will be very difficult to slow that growth.”

Dave Sanford, CEO of GraceMed, a community health clinic, said, “I would like someone to do an objective evaluation from an economic perspective on what the cost is going to be by not expanding Medicaid. If we don’t expand Medicaid, our ERs will continue to be overrun with people that should be there for nonemergency services.

“I understand we have to be careful about what happens downstream in five, 10 years, but someone owes it to Kansans to come up with a very objective format for what the advantages and disadvantages would be for expanding. We need to get out of the political, illogical and insane conversations that we’ve heard over this election period.”