Capital One, Perelman Stoke Charities As Government Shuts Down

One of the many results of partial government shutdown has been that charitable organizations that rely on government funding have had to furlough workers and suspend essential services to those in need. This funding gap has spurred individual and corporate philanthropists alike to step in and fill the funding gap.

Last week, Laura and John Arnold announced a donation of up to $10 million to the National Head Start Program in order to prevent 23 programs in 6 states serving more than 7,000 kids from closing their doors. (See Arnold Foundation: Grants for K-12 Education).

This week, it was investor and businessman Ronald O. Perelman making an emergency grant of $100,000 to the historic Ford’s Theatre, and Capital One donating $250,000 to the Latin American Youth Center.

Perelman’s donation allowed the theatre to reopen on Wednesday, and will fund operation for eight days, preventing the loss of additional revenue while Congress works on an agreement to reopen the government.

The donation from Capital One will enable the D.C. non-profit to return furloughed staff and reopen its doors while its essential funding source remains tied up as a result of the government shutdown. The Latin American Youth Center offers critical youth development services to 5,000 at-risk children per year, including job training, education and mentoring. Capital One also gave $100,000 in response to a United Way challenge grant to build an emergency assistance fund for food charities.

While these sorts of donations are greatly appreciated by the organizations, their employees, and the individuals that use their services, these are only temporary fixes. The organizations are generally in dire straights before they receive funding, and have often already had to suspend some or all of their operations.

Thankfully, Congress has restored funding to keep the federal government open at least through January 15, but with the political brinksmanship that has routinely plagued Washington lately, there is always the danger of another shutdown. And while these sorts of issues should be a wake-up call for Congress to get its act together to prevent interruption in these services, it should also be a wake-up call to charities and philanthropists alike that non-profits increasingly need sound financial plans with multiple revenue streams, and an emergency fund to temporarily support operations during crisis situations.