THE FEDERAL BUDGET AND THE NONPROFIT SECTOR: FY 1993
Despite pressure to relieve economic hardships and spend the peace dividend, the Bush administration submitted a fiscal year (FY) 1993 budget that abides by the 1990 budget agreement and holds the line on domestic spending. As a consequence, for the thousands of social service agencies, day care centers, clinics, hospitals, universities, nursing homes, and other organizations that comprise the nation's nonprofit sector, the Bush budget proposal offers little in the way of relief from the financial strains many of these organizations experienced in the decade of the 1980s.
The purpose of this report is to examine the potential impact of the president's proposed budget for FY 1993 on federal spending in programs of interest to nonprofit organizations and on federal support of nonprofit organizations. It also seeks to put the projected changes in context by examining what has happened since FY 1980 to federal spending, to federal support of nonprofit organizations, and to private giving. Congressional action to date on the FY 1993 budget will also be considered. To accomplish these purposes, we first examine the record of federal outlays in six budget functions of interest to nonprofit organizations in the years between FY 1980 and FY 1992 and assess the implications this has had for federal support of nonprofit organizations. We then turn to President Bush's FY 1993 proposal, which was submitted to Congress in January 1992, and examine what it would do to federal spending in these same fields and to nonprofit revenues from federal sources. Next, we consider how Congress has modified the president's FY 1993 proposals as of this writing. Finally, we compare the reductions in federal support of nonprofit organizations to the increases in private charitable giving these organizations have received over the same period.
Throughout this analysis, spending figures have been adjusted to take into account the effects of inflation and are expressed in terms of "constant FY 1980 dollars." The conversion to a uniform base allows spending from different years to be compared in the same terms. In addition, the analysis focuses on spending in a number of broad, "functional" areas of interest to nonprofit organizations, rather than spending on individual programs. This differs somewhat from our original work on this topic, which utilized program-level detail. Although we focus on the six budget functions that we believe have the greatest relevance to nonprofit organizations, it is important to recognize that these functions include some programs that have little relationship to the nonprofit sector, and that there are individual programs of considerable relevance to nonprofit organizations that are not covered in this analysis because they are buried in other budget functions that are not included here. The picture presented here is therefore necessarily somewhat imprecise. Care must consequently be taken in interpreting the detailed numbers resulting from this analysis.
