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September 22, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

The Kennedy Center CEO criticizes regulatory burdens on nonprofits’ budgets

Connecticut’s long-simmering fiscal crisis is coming to a boil for nonprofits such as The Kennedy Center.

The nonprofit’s CEO, Rick Sebastian, said unfunded mandates and state budget cuts are proving costly.

Rick Sebastian speaking at the forum. Photo by Phil Hall

“We’re spending about $300,000 a year on four unfunded mandates,” Sebastian said. “These are mandates that do absolutely nothing for families. They don’t give any value. These are mandates that drive administrative costs. We have a system that is driving that administrative overhead and is taking away valuable resources for direct service and direct support for people who are currently in the system and people who are waiting to come into the system.”

Some of the regulations that The Kennedy Center must pay the full expense are a recertification trainings that cost $167,649 annually, a quality service review that costs $36,050, administrative billing requirements that total $46,683 annually and an electronic visit verification system that costs $65,000.

Sebastian’s comments came during a legislative breakfast held Feb. 28 at Chip’s in Trumbull.

Sebastian put particular focus on the recertification requirements, citing them as an example of a waste of time and money.

“We go through about 13 individual trainings that are mandated by the state on an annual, on a semiannual, and on a third-year basis,” he said. “When you get to years two and three, they are repetitive of what we had in the first year.”

Sebastian also said that regulatory mandates increase pressure on cash-strapped nonprofits to focus on back-office operations rather than public services. His Trumbull-based organization provides services for persons with disabilities and special needs from birth through senior years.

“We have to track how a dollar is spent and we have to add staff to our finance department to do billings,” he said. “Does that make sense in the overall theme of serving the most vulnerable in our community? Over the next three years, we could save $1 million. It’s not additional dollars that we have to raise from a revenue standpoint, and it’s not additional dollars that you have to take from some other worthy organizations across the state.”

Although the legislative breakfast focused on The Kennedy Center’s struggle, Sebastian said that his organization is not alone in this matter.

“If it is costing the Kennedy Center $300,000, what is it costing some other organization in New Haven or Waterbury or New Britain? When you put all of those costs together, you are looking at hundreds of millions of dollars in potential savings that could go back to being invested in the system.”

One of the legislative guests at the event, state Sen. Tony Hwang (R-Fairfield), challenged the attendees to become proactive citizen-lobbyists on behalf of nonprofits. Hwang conducted a quick poll of attendees to see how many could identify their state representatives, and his query was met with a conspicuous absence of raised hands. He pointed to this year’s statewide election and challenged people to make their voices heard in Hartford.

“They’re going to return phone calls when they realize they need you in November,” Hwang said about the state’s legislators. “For them, it’s self-preservation.”