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Nonprofits struggle with ‘shackles’ of budget impasse


By Tara García Mathewson.-

 As goes the nonprofit sector, so goes the community. Eric Lugo, founder of nonprofit and philanthropic consulting firm Conciencia Ventures, says it’s virtually as simple as that.

Conciencia helps corporations and foundations make philanthropic investment decisions, and it guides nonprofits as they work to innovate and gain access to new capital. Before starting his business, Lugo was in charge of local implementation of JPMorgan Chase’s global philanthropic strategy and he raised more than $15 million in new private and public revenue as senior development officer at Instituto del Progreso Latino.

 Lugo’s work has given him a front row seat to the recent damage to the nonprofit sector. The state cut payments to human service organizations by $383 million from 2015 to 2016, thanks to an unprecedented budget impasse.

“We’ve got increased homelessness, increased violence, and those are a direct result, I think, of lack of access to mental health care, a lack of access to supportive programming in and outside of school,” Lugo said. When asked about the stakes of losing capacity in the nonprofit sector, Lugo’s response is quick: “We’re experiencing the risks in real time.”

But when Lugo thinks about the state of the nonprofit space in the Chicago area he sees a lot of good work being done. Organizations are stepping up in very real, and very important ways. These nonprofits are forging new partnerships and trying to leverage each other’s resources for maximum impact. And they are trying to fill gaping holes that public agencies are leaving open.

“There’s an element of hope and opportunity in the way organizations are rallying around each other to try to be more efficient and effective,” Lugo said. “At the same time, we are really shackled by the constraints of the current budget impasse.”

He likens it to a runner being asked to race while having two arms and a leg tied up.

That’s why it is so critical that nonprofit organizations tap into new revenue streams in the absence of government leadership. And the truth is, the region’s major foundations cannot fill the gaps alone. The entire civic community, he says, needs to think about investing in the nonprofit space.

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