Open Letter to Governor Hogan, Executive and Legislative Leaders Regarding State Budget Surplus

Maryland Philanthropy Network has joined Maryland Nonprofits and our colleagues across Maryland in responding to a call for ideas from the State for how the budget surplus should be allocated. MPN was part of a group of 170 practitioners and partners that came together to create a joint appeal the result of which is this letter to the Governor.

Together, we urge the State to dedicate $1 billion of the projected budget surplus for targeted relief, and that $500 million of this commitment should continue in future budgets to assure sustainability and for more equitable disbursement of state resources in partnership with the social purpose sector.

Sign-On Letter

Dear Governor Hogan, Lieutenant Governor Rutherford, Comptroller Franchot, Treasurer Kopp, President Ferguson, and Speaker Jones,

This letter sets out some of the priorities and proposals of Maryland Nonprofits and the state’s nonprofit sector at large. We want to applaud the state’s determination to use a portion of the state’s revenue surplus for targeted relief for Marylanders who are struggling to make ends meet.  

Maryland Nonprofits advocates that this targeted relief include extending services and benefits that address the human service needs of individual Marylanders, families, and communities that have been most burdened by the Covid pandemic and its economic consequences, in addition to direct cash stimulus payments. 

We urge that the State dedicate $1 billion of the projected budget surplus for targeted relief, and that $500 million of this commitment should continue in future budgets to assure sustainability. 

 As you have all noted, Maryland faces unprecedented challenges and opportunities this year.  Our highest priority should be to answer the urgent needs of Marylanders for the necessities of life. These include nutrition, rental relief, and income maintenance programs. In addition, the state should use the available resources to invest in resources that will strengthen our state’s economy in the coming years, including workforce development, housing, and childcare. 

Finally, Maryland Nonprofits recommends a series of improvements in the administration of benefit programs, grants, and contracts. These are not just best practices – they are urgently needed to provide help to the individuals, families, and communities that need it when they need it. All the programs should also be designed and implemented in ways to incorporate community input, and to prioritize equity and diversity. 

These proposals are drawn from a series of convenings of a diverse group over 170 nonprofit and community leaders from across the state as well as Maryland Nonprofits’ formal policy process, which represents the priorities of our 1300 members.

Putting People First

• The highest funding priority should be extending and providing benefits to people, families, and communities that have been harmed most seriously by the Covid pandemic and its economic effects. This includes, but is not limited to: food assistance; rental assistance and other housing supports; and behavioral health services, including bilingual mental health treatment. 
• Prior to Covid, the wage gap for direct care workers was a chronic obstacle to delivering quality, reliable care. In the current economic environment, it is an acute and urgent crisis. The shortages of direct care workers is a crisis in every sector of nonprofit human services: children’s services, developmental disabilities, behavioral health, and other fields. These workers are predominantly women and minorities. They are often the sole breadwinners for their families. A stop-gap program of premium pay for essential human services workers is needed immediately, along with a long-term, sustainable solution to the wage gap.  
• As the state looks forward to a post-pandemic economy, there is a big mismatch between workforce needs and the availability of skilled candidates. This will be exacerbated by large infusions of federal, state, local, and private funding for physical infrastructure. The state should make a major effort in workforce development, focusing on vocational education, apprenticeships, training programs, and other measures to ready our young people for the opportunities ahead. These investments will complement a boost for the state’s Historically Black Colleges and Universities, which is equally important. 
• Direct payments are an efficient and timely way to provide needed relief. It is important to carefully target direct payments to individuals and families who are most in need, and to avoid allocation processes that tend to discriminate against communities of color and immigrants. 
• Programs should be planned and implemented with transparency and with active input from the affected constituencies. They should intentionally emphasize equity, diversity, and restitution.

Partnering With the Nonprofit Sector

Maryland’s nonprofit sector is a major driver of the state’s economy. In the latest year for which data are available, Maryland’s 30,880 public-serving nonprofits—including hospitals, universities, day care centers, nursing homes, social service agencies, museums, theatre companies, environmental organizations, advocacy groups, clinics, and more—generated nearly $60 billion in revenue and supported more than 280,000 jobs. That represents more than one in every eight non-government workers in the state. That’s more workers than the manufacturing, construction, or hotel and restaurant industry employed. These nonprofit workers earned nearly $16 billion in wages—well ahead of any other major industry in the state. 

Nonprofits and government are natural partners, serving the same constituents in the same communities. Partnerships between our sectors allow for leveraging of resources, relationships, and strengths to serve those communities even better. Maryland’s nonprofits have close relationships and high levels of trust with those they serve. They are perfectly positioned to maximize public benefits with their deep knowledge of community needs, reach, and existing relationships, particularly in low-income and underserved or hard-to-reach populations.  Nonprofits can act quickly and nimbly to advance the state’s efforts in economic and human recovery. 

There are numerous ways that nonprofit organizations can help the state government in providing Covid-related programs.

• Assisting with gathering input from affected communities 
• Getting the word out about available benefits and assisting individuals in accessing critical benefits 
• Doing the actual work through contract and grant funding.

To make more effective use of these capabilities, though, the state needs to make dramatic improvements in grant and contract processes. For example:

• Adequate staffing in public granting and contracting agencies. 
• Delegate administration to nonprofit intermediaries. 
• Simplified applications and reports. 
• Timely payment.

Many of these reforms are already being planned by the MEGA Council and the Governor’s Grants Office. In the current emergency, though, the process needs to move much faster. 

Nonprofit organizations have been hit hard by the Covid pandemic and its economic effects. Nonprofits are on the front-line, providing services including health, mental health, food, and shelter.

 Nonprofits are businesses with similar pressures and losses due to Covid as other small businesses. Nonprofits have had to cancel fundraising events and cancel programs for which they charge fees. Childcare organizations, YMCA’s, day programs, programs for people with disabilities have had significant layoffs. Paycheck Protection Program and other relief programs are slated to lapse at the end of 2021. Grant programs for nonprofits through DHCD and county governments have received far more eligible applications that they have been able to fund. 

Maryland Nonprofits urges an additional round of nonprofit financial relief to be managed statewide by DHCD to address ongoing urgent needs. In the long term, the state should implement an array of economic development grant and loan programs specifically directed to nonprofits, analogous to the tools the Department of Commerce operates to support growth and innovation in the for-profit sector. 

Maryland Nonprofits is eager to work with state government leaders to discuss, refine, and help to implement these priorities. Please do not hesitate to contact me.