The city of Durango is considering axing hundreds of thousands of dollars in discretionary spending it usually gives to help local nonprofits as a result of shrinking revenue, city officials said.
The loss of city funds is a detriment to local nonprofits that have already seen declining revenues during the past five years, said Briggen Wrinkle, executive director of the Community Foundation Serving Southwest Colorado, which helps nonprofits in the region.
It has been a difficult year for local businesses because of the 416 Fire. That means businesses have less money to give. Nonprofits have also seen declining contributions from the oil and gas industry, a major funding source for charitable organizations, Wrinkle said.
“It’s not like nonprofits have another place to turn,” Wrinkle said. “You have to replace that income or we reduce services.”
The reduction in services could mean people who need support “fall through the cracks,” said Lynn Urban, president and CEO of United Way of Southwest Colorado. Some people rely on services provided by charitable organizations to get through challenging times.
Nonprofits often provide services that local governments can’t, like serving food, providing shelter or expanding educational opportunities, Urban said.
“I don’t think anyone would think that it would be a good thing not to have a place where someone who is experiencing domestic violence to escape that,” Urban said.
United Way contracts with the Durango to manage city contributions to local nonprofits.
City staff proposed a $140,000 contract with the nonprofit this year. In year’s past, that contract was for $220,000. United Way manages that money, deciding which organizations should receive city funding.
That reduction in funding may mean nonprofits that once received $5,000 from United Way may receive only $3,000, Urban said. It will likely mean fewer clients served.
Local nonprofits rely on city funds for 5 to 10 percent of their revenue, Urban said. Charitable organizations often have tight budgets, making a small loss in revenue a big problem, she said.
The loss of local funds can have a compounding effect. Nonprofits can use local donations to match grants from state or federal agencies. Losing city money may prevent nonprofits from being able to match those grants, she said.
That’s the scenario for Durango Adult Education Center, which uses contributions from the city to match a federal grant to pay for its English as a Second Language program, said Executive Director Elizabeth Helzey.
If the city funding doesn’t come, and Helzey can’t find other contributions, the program could see cuts, she said. Last year, the Adult Education Center received $24,000 from the city, Helzey said.
“If we don’t get a significant portion of that funding from the city, we will be really challenged to offer our English as a Second Language program,” she said.
The lack of funding may be a spark that encourages collaboration between nonprofits to explore how to more effectively deliver services, Helzey said.
“If we can find a way to work together more efficiently, then that’s a good thing,” Helzey said. “There has to be a catalyst for that to occur.”
Urban said Durango is one of the few municipalities in the region that offers the level of funding that it does. In 2017, the city contributed $112,850 in discretionary grants, according to the 2019 proposed budget.
The year before, the city spent $300,000 on block grants for nonprofits, according to the 2018 approved budget.
“The fact that they do it is wonderful, and we hope that next year, if the budget bounces back, that we can get to the levels we were at before,” Urban said.