(WASHINGTON,  MARCH 2, 2010) -- Independent Sector submitted a statement for the record this morning to the Senate Banking, Housing, and Urban Affairs Committee to reiterate the urgency nonprofits - like small businesses - face in securing lines of credit to keep them afloat during these tough economic times. A similar statement was filed last Friday to a joint hearing of the House Financial Services and Small Business Committees.
 
Charitable nonprofit organizations, whose work is critical to meeting the increased demands of the millions of Americans seeking assistance, have been devastated by this credit crisis. Large numbers of community organizations have encountered extreme difficulties in obtaining capital investments and short-term funding needed to sustain and expand their services in response to the considerable needs of communities throughout the nation. Without access to short-term funding, these nonprofits are forced to cut services and staff and in the worst case scenarios shut down altogether.

With Congress moving to assist Main Street America, it is important to remember the nonprofit health and human service agencies that work with government to provide the services that Main Street America needs now more than ever.  Due to the severe budget shortfalls facing most state and local governments, these organizations are experiencing significant delays in receiving reimbursement payments for contracted services. For instance, much of the $3.8 billion deficit in Illinois is owed to partner nonprofit agencies that provide critical services throughout the state. This is a strain experienced by similar partnerships throughout the nation. Nonprofits have already made significant cost reductions and many have exhausted available financial reserves and lines of credit.

The problem is compounded as many banks refuse to accept government contracts as collateral, leaving many nonprofits with little hope for meeting their most basic needs. With donations significantly down at the present time, credit has become even more crucial if people in need are to continue to receive vital services.

As Congress considers proposals to assist small businesses, Independent Sector strongly urges them to work with our sector to develop banking incentives that will open up lines of credit for nonprofits.

Click here to read Independent Sector's statements to Congress and more about the Nonprofit Credit Crisis.

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Independent Sector is a nonprofit, nonpartisan coalition of approximately 550 charities, foundations, and corporate giving programs, collectively representing tens of thousands of charitable groups in every state across the nation. Its mission is to advance the common good by leading, strengthening, and mobilizing the nonprofit and philanthropic community.