How the SOS Proposal Would Impact Michigan Nonprofits

Defend Michigan Nonprofits: How the “SOS” Proposal Would Impact Michigan Nonprofits

Petitions are currently circulating for signatures to place the “Stop OverSpending” or “SOS” proposal on the November ballot. “SOS” is modeled on Colorado’s so-called “Taxpayers Bill of Rights” (TABOR) that was adopted in the state in 1992 and was recently suspended due to the state’s deteriorating public services and the prospect of more cuts. “SOS” would limit growth in government spending to a strict formula of population plus inflation and would require voter approval to override. Essentially, government spending would be so limited that drastic cuts would be made to critical services relied on by all Michigan families. “SOS” would also have a very negative impact on Michigan nonprofits, consequences for nonprofits would include:

Decreased funding and increased need for services Under TABOR, Colorado nonprofits saw a significant increase in the need for their services and a decline in funding from government. Many organizations were forced to make difficult cuts in their budgets, decrease programming and eliminate staff. Under “SOS,” Michigan nonprofits would face a similar dilemma. The state and Michigan’s nonprofit community have long been partners in providing health care, education, social services, culture and arts throughout the state. Although the need for the services of food banks, after-school activities, homeless shelters, health care facilities and more would most likely increase under “SOS”, the sector would be unable to fill the void left by decreased government services and funding.

Fundraising challenges As Colorado decreased its funding of education and public safety, local communities enhanced their fundraising efforts to appeal to individual donors to help fund some of the programs left unfunded by government. The Michigan nonprofit community relies heavily on individual donations. However, there is a limited amount of expendable income that individuals are able to donate to support nonprofits on an annual basis. If individuals are faced with the choice of either giving money to their local school to supply their children with textbooks or to give that same amount of money to a local charity, the local charity might find its fundraising efforts fall short.

Public services at jeopardy As either owners of property or as tenants nonprofit organizations rely heavily on local municipalities to provide them with public services. Organizations would have difficulty attracting employees and protecting those that visit or utilize their facilities if trash was not collected on a regular basis, if there were pot holes that ruined visitors’ tires or if they could not provide a safe place to work or visit because there weren’t enough police or emergency personnel to protect them.

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