Leaders of Indiana's nonprofit groups are expressing concern about how they'll be affected if Washington can't reach an agreement to avert the looming tax increases and spending cuts known as the "fiscal cliff."
Middle-income taxpayers could pay thousands more in taxes starting in January if Congress doesn't extend the Bush-era tax cuts. That could cause donations to nonprofits to drop at a time when the organizations are still struggling to recover from the recession, The Star Press reported.
"I don't think any of us know what this means or what's going to happen and that's the scary part," said Susan Kemp, executive director of Bridges Community Services, a transitional housing program in Muncie. "I think we each need to call our congressmen, tell them to get off their duffs and start talking to each other. This could be a major problem not only for this agency, but for the community."
The "fiscal cliff" would bring tax increases that would affect every worker who pays federal income tax. It also would involve spending cuts that would begin to bite defense and domestic programs. Economists say the combination could cause the nation to slip back into a recession at a time when the economy is still fragile.
Teresa Clemmons, executive director of A Better Way, which helps victims of domestic violence in Delaware County, said any additional drops in funding could significantly impact the agency's programs.
"Most of our donors are middle-class supporters who provide us with smaller gifts that we really need," Clemmons said.
Agencies say it's difficult to prepare for the worst because it isn't clear which programs would be affected, and how quickly. But they are concerned that programs that help the most vulnerable residents could be impacted.
"We don't know how everything will work, but hurting the people who are struggling the most isn't the way to go," said Tim Kean, executive director of Second Harvest Food Bank of East Central Indiana.
Nonprofits that rely on donations as well as federal assistance believe the rise in taxes will have an impact on everyone.
Kemp said she hopes a deal is worked out to avoid the cliff.
"This is too big of a problem to let happen. But we're preparing for the worst, but hoping for the best. We're driving toward the cliff, we know that. This is a new, complex problem, but it needs to get fixed."