Local governments prepare to cut nonprofits from budget

The Chronicle of Philanthropy followed up on their in-depth coverage of what a recession might mean for fundraising with a live chat yesterday.

Unfortunately, Michael Seltzer and Robert Sharpe, the guests for the chat addressed the impending diaster awaiting nonprofit groups that rely on local government funding. Not only has the collapsed of the real estate bubble reduced the size of tax revenue for many jurisdictions... but in case you missed it, we are about to face a major crisis with municipal bonds.

As a result, I expect to hear more about municipalities declaring bankruptcy. When that happens, expect to see more headlines like this from El Dorado County in California:

Museum and bookmobile services might be curtailed and a surcharge added to cell phone bills as part of El Dorado County's efforts to close a projected $15.6 million budget gap in the coming fiscal year.

Don't be surprised if other cash-strapped municipalities begin to do more than close the county Historical Museum or eliminate the library's bookmobile service.