Nonprofits struggle to win back funding

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Nonprofits struggle to win back funding

It’s been five years since the recession hit, and nonprofits in Haywood County are still struggling to get by after losing their monetary contributions from the county.

Before the recession hit, Haywood County gave about $472,000 to nonprofits, among them the Good Samaritan Clinic, the Haywood County Fairgrounds, the Haywood County Arts Council, Folkmoot USA, Kids Advocacy Resource Effort and REACH, a domestic violence agency.

However, in 2009, the county pulled the plug on nonprofits that do anything from combating child abuse to provide health care for the poor — mirroring austerity measures enacted by local governments across the nation.

Although the economy continues to improve year after year, the Haywood County Board of Commissioners will not likely restore any funding to nonprofits in the coming fiscal year.

“I would not envision that occurring,” said Commission Chairman Mark Swanger. “It is up to the board, but I would not anticipate any changes from the past year. Revenue still has not recovered.”

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But with the budget process just kicking off, Swanger and other commissioners stated that nothing is a given until the board has a better idea of what the budget will actually look like.

Commissioner Bill Upton was not optimistic that the county will see a sudden turnaround, enabling it to restore nonprofit funding. But he said the nonprofits provide valuable services that benefit residents.

“If we can help them some to keep them going, we need to do so,” Upton said. “We need to keep our programs going.”

Supporting all nonprofits

News that county leaders may restore partial funding for the fairgrounds (see related story) has prompted other nonprofits to renew their requests with the county as well — but they are not holding their breath.

“The fact of the matter is receiving funding now is getting tighter and tighter,” said Julie Schroer, director of KARE.

To cover the $25,000 funding cut from the county in 2009, the nonprofit that works with abused children has reached out to community members, upped it fund-raising efforts and sought out more grants.

“The faith community has really been generous,” Schroer said.

Meanwhile, REACH of Haywood County, which offers emergency services to victims of abuse, opened a second thrift store in Hazelwood last year to help bolster its bottom line. Julia Freeman, executive director of REACH in Haywood County, said the additional thrift store has done well so far and helped during a time when county and state funding is still scarce.

Freeman remembered the struggle back in 2009 when the county slashed its funding. The nonprofit expected $25,000 from the county that year but only received about $12,500 when county leaders told them not to count on anymore.

“That was particularly difficult that year because it happened during that fiscal year when we expected that money,” Freeman said.

The money went toward basic operational expenses like paying the electric bill or salaries. Because most grant monies are dedicated for a specific use, nonprofits have to look elsewhere for funding to keep their doors open.

For the last few years, REACH has not even bothered to ask for funding from the county.

“We were kind of told, ‘There is no money, so don’t waste your time.’ Although not in those words,” Freeman added.

But this year, the nonprofit plans to apply for county help, particularly since the board of commissioners is contemplating allocating money to the fairgrounds.

“If they are going to support one nonprofit in our community, they need to support all the nonprofits,” Freeman said.

Schroer came on board with KARE just 18 months ago, and so she did not realize the nonprofit ever received money from the county. She plans to ask for an allocation for this coming fiscal year, even if the chance is slim.

Schroer said spreading around what discretionary funding the county does have, rather than selectively restoring funding, would ensure that everyone got at least a little help.

“I would rather see some sort of funding across the board for local nonprofits. It’s hard to see one agency get something and others not,” Schroer said.

Meanwhile, the Haywood County Arts Council, which previously got $15,000 from the county, has spoken to Waynesville leaders about possibly squeezing the organization into the town’s budget next year. While restored funding for the fairgrounds is justified in part as economic development, a flourishing arts community is also economic development.

“If it weren’t for the arts in Haywood County, the tourists aren’t coming,” said Libby Irwin, president of board of Haywood County Arts Council. “We are becoming a destination place for art. Most of the stores on Main Street have something to do with art.”

Similar to other nonprofits, the council has searched for new funding to cover what it lost from the county and elsewhere, but it’s still a strain.

“We are not nearly as financially stable as we were,” Irwin said.

Last year, the executive director of the arts council left, and the board has no plans to replace her anytime soon simply because it doesn’t have the money for the salary and benefits.

“We had to lose someone we really needed,” Irwin said.

The arts council has “an army of volunteers,” however, that have graciously stepped up, Irwin said. Some are even writing grant applications, a job previously done by the executive director.

“They have come through unbelievably,” Irwin said. “It’s our volunteers who are keeping us going for sure.”

Hard times for all

Commissioners have already said they don’t want to increase property taxes — their only true option for bringing in more money.

The county also gets a cut of the state sales tax, but the amount varies from year to year depending on consumer spending. Sales tax revenue projections for next year have yet to be issued by the state, but county leaders are not expecting a significant increase.

“We are all sitting around waiting for some growth to occur in the economy,” Upton said. “The money is not flowing like it did in the past.”

Without a meaningful rise in sales tax and property tax revenue, the county won’t have additional money to spend next year, leaving no room in the budget to restore funding to towns for recreation or nonprofits.

“I haven’t heard that this will be the year we are going to do that,” said County Finance Director Julie Davis, citing limited change in revenues for next fiscal year.

When preparing a budget, the county must first cover all the obligatory cost increases — like the higher cost of fuel and electricity or employee health insurance rates. Then it decides what nonessentials, if any, it has room for.

“The commissioners will make decisions on necessity,” Davis said. “It’s typically easier to cut out the non-required.”

However, when it comes to nonprofits, the question of whether something is necessary gets trickier.

Nonprofits provide vital public services. Some, such as KARE and REACH, help abused children and domestic violence victims. But the county is not required to give them anything, so nonprofits ended up on the chopping block during the recession.

Nonprofits were by no means alone on that chopping block, however. Funding cuts also took a toll on the school system, the community college, recreation contributions to towns, county employee pay and the number of county staff. From fiscal year 2009 to 2010, the county trimmed $5.4 million from its annual budget.

If and when recession-driven budget cuts can be restored depends on whether and when county revenues pick back up, from lagging sales tax to reduced state funding streams.

“It’s premature right now because we are not seeing numbers right now, except it’s flat,” said Commissioner Mike Sorrells. “I would like to say we would be able to help, but it’s premature for that.”

During the last two fiscal years, the county has reinstated a small portion of its nonprofit funds, however, on a case-by-case basis. This year, Haywood County gave $17,500 to community clubs around the county, which offer food distribution, senior activities and educational opportunities.

The county also restored funding to the to the foster grandparent program, which pairs grandparents with a child at need of a nurturing adult figure in their life, to the tune of $16,000.

One nonprofit in particular has been singled out by the county to get a sizeable chunk of funding during the past year. The Haywood County Senior Resources Center got $120,000 in funding for the current fiscal year for salaries, operations and programs.

Fairgrounds seeks lifeline from Haywood commissioners, again

Haywood County leaders made sweeping, across-the-board cuts to nonprofits during the height of the recession several years ago, but one nonprofit convinced the county to bail it out — and may soon do so again.

Like other nonprofits, the Haywood County Fairgrounds has struggled to make ends meet on its own without the money it previously received from the county. Haywood County used to give the fairgrounds $150,000 annually to chip away at a buildings and grounds master plan and to help cover some basic operational costs. But that funding was cut in 2009.

“The fairgrounds, the county was basically their budget,” said Commissioner Kevin Ensley, a member of the fairgrounds board.

The loss of county funds and insufficient profits nearly resulted in the fairgrounds defaulting on a bank loan in 2010. The loan was used to build a football field-sized covered arena and a second indoor exhibition hall. To keep it from foreclosure, county leaders agreed to pay $337,000 the nonprofit still owed.

But that wasn’t the end of its troubles. The next year, the county spent $400,000 to build restrooms in the covered arena to bring it into compliance with building codes. Otherwise, the fairgrounds would have closed.

Now, the fairgrounds is asking for more money — this time to help it sustain its operations.

“We can’t continue the way we are going without some type of funding from the county,” Ensley said.

No other nonprofits have received such treatment, but county commissioners said that is because of one big difference.

“The county, they own the property,” Commissioner Mike Sorrells said. “I think that trumps the other stuff.”

Ensley updated his fellow commissioners on the state of the fairgrounds at a meeting last month. The fairgrounds booked 52 events during the 2012 calendar year, down five from the previous year. So far this year, 43 events are scheduled, and the fairgrounds board expects more rentals to come.

But there are still event organizers who have no idea that the fairgrounds exist.

“Marketing is an ongoing issue,” said Nancy Davis, treasurer of fairgrounds board. “It just hasn’t been a very consistent effort.”

The fairgrounds board does not have the money to pay someone to actively market the venue for them, to act as a liaison at events and show people around the property. They don’t even have a maintenance man. A volunteer checks on the fairgrounds and does small repair jobs.

Ensley said the fairgrounds could eventually be profitable, but the board has not had money to spend on upgrades. Just this year, the sprinkler system has broken twice, a leak developed in the small exhibit hall, and the electronic sign was vandalized.

“Being able to just keep up with repairs and maintenance becomes an issue,” Davis said. “None of that’s cheap.”

Without money for improvements, the fairgrounds will keep fighting to stay afloat.

“They are still limping along because they don’t have the upgrades yet,” said Commissioner Kirk Kirkpatrick.

Another problem is the rental fees — they are too low. After looking at other fairgrounds facilities, the board realized its rates needed to be raised and increased it by 15 percent.

“We didn’t really want to go up, but we do know that we need to pay for the expenses and everything,” Ensley said.

The board will incrementally increase the rental fees each year until they are on par with other facilities.

On the table now is whether the county should own all of the fairgrounds — including the buildings and not just the property they sit on — and hire someone to advertise and book events. If the county owned everything, its facilities maintenance could take over care for the buildings.

Commissioners said the fairgrounds is still a worthy investment and offers a public service by bringing different events to the county.

“It does advance the quality of life of thousands of our residents,” said Commissioner Mark Swanger.

It is also a form of economic development. When the fairgrounds hosts a weekend-long event like the annual dog show or a horse show, people travel to Haywood County, sleep in its hotels and spend money at its establishments, Swanger said.

In a similar situation, Maggie Valley has a town-owned and operated festival grounds. The town subsidizes the festival grounds in the name of economic development since the venue brings in events and ultimately tourists and their wallets.

But, Swanger will not say yes or no to the proposal until further into the budget planning process this spring.

“I think as we go through the budget process we will have to see how it fits into our priorities,” Swanger said. “I am going to be noncommittal until we see the whole picture.”

— By Caitlin Bowling

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