Gas Prices Affecting Nonprofit Budgets

Charities that provide transportation or rely on the transporting of goods are beginning to prepare for budget cuts in response to rising gas prices. In the first week in March, gas prices jumped 15 cents per gallon. Rising to prices higher than $3.80. This steep jump in gas prices is being blamed on unrest in the Middle East and a booming economy in Asia.

While gas prices are beginning to worry school systems and transits, our nation's nonprofits are among the first of organizations to begin budgeting around the cost of gasoline. Specifically gas prices are affecting those charities that have a priority in their mission to provide travel to their clients, like The Center at Jenks Rest in Lafayette, IN, the Center provides a shuttle for handicapped people and senior citizens to numerous activities. According to Catherine Moran, the executive director of The Center, their budget is prepared to withstand up to $4 per gallon gas prices. "If it goes beyond $4, we'll have to make some decisions," she said. "We're looking for funding options."

Organizations that transport goods, like the Salvation Army in Atlanta, GA, which requires 15 trucks to travel to 13 counties in Metro Atlanta and pick up donations, are also just as affected. The Salvation Army executives say they expect their budget to increase by $50,000 just for gas prices.

An economics professor from Purdue University, David Hummels, says that the inflated gas prices are a case of supply and demand. Hummels explains that not only is unrest in the Middle East causing people to worry about supply, but also Asia's economy continues to surge, "they want to drive, to buy televisions, to do things that typically take oil." So, for these reasons, there is a rise in demand for oil. Which Hummel says leads to a "rapid price increase."

The effects of this issue are already starting to make an appearance in the budgets of individuals, businesses and maybe most increasingly, charities. Because of the significant dip in giving during the economic downturn, many nonprofits have already had to cut cost and revise budgets, and many feel they are running out of places to take from. Joe Micon, executive director of an after school program in Indiana that provides transportation from school to activities says, "We're not thinking about curtailing routes, but if prices go much further we'll have to put our heads together. "

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