It strikes me that when municipal governments start looking to local nonprofits for help with public sector financial problems the end of civilization cannot be far off. What’s next, the mayor standing in line at the soup kitchen?

This phenomenon reminds me of a story I heard from a client who worked for a tech company. He claimed he could track his company’s fortunes by the prices at the soda vending machine in the lunchroom. When he first started at the company the vending machine was left open and the sodas were free. As the economy tightened a modest charge was imposed at the vending machine, basically to cover the cost of the drinks. “But,” he told me, “when they raised the prices again and I figured out that the vending machine was now being viewed as a profit center, I knew the company was in trouble.”

Viewing nonprofits as a revenue source for local government strikes me as the “vending machine as profit center” way of thinking.  The entire tax system is off, yet we look to nonprofits rather than to tax reform. The U.S. has the highest corporate tax rate in the world – yet many large companies pay nothing at all. Let’s look to close those loopholes before we start asking the local community hospital to contribute to the city’s coffers.

Aside from the politics there are just no good choices for reducing our nation’s indebtedness. Raise taxes generally and you hurt the recovery.  Raise taxes on the rich and you incur their wrath and mobilize an onslaught of lobbyists. Cut spending and you hurt the recovery plus a lot of people who are in need of government services ranging from unemployment insurance to mental health care.

What’s the President to do?

One approach that is sure to be included in any agreement is to delay implementation until the economy improves. By the time that happens we will be a lot further in debt, but any draconian moves will be less damaging.

Another approach, recommended by economists, is to ignore the debt per se and focus instead on growing the economy so that the debt becomes a smaller percentage of GDP. This is how we have dealt with it in the past. Robust economic growth coupled with modest reforms could do the trick.

Lost in the debate over the deficit is the role our nation’s nonprofits can play in bringing about economic growth. If the engine of employment is small business, most nonprofits are local, community-based employers of anywhere from one to a couple dozen people. Increased funding for essential services such as homeless shelters, food banks, and counseling programs achieves a trifecta of economic benefits.

First, most of many local nonprofits’ budgets are devoted to human resources so any new money coming in is instantly translated into new jobs, and those workers pay taxes.

Second, newly hired nonprofit workers help their fellow Americans deal with the consequences of the poor economy. Whether it is finding a stable living situation or putting food on a family’s table, most nonprofit programs involve helping their clients through increased economic activity. Renting an apartment or providing a service enhances a community’s economic output.

And third, safety net services provided by nonprofits help government at all levels to avoid expenses.  For example, mentoring programs or other support services provided by nonprofits benefit adolescents  – who might have struggled with an unplanned pregnancy or juvenile detention in the absence of those nonprofit services – and save the state tens of thousands of dollars in related health, welfare, and police expenses.

Unspoken in my argument above, but equally important to our country’s well-being, is the alleviation of suffering nonprofits deliver to our society.

The bottom line: added investment in our nation’s nonprofit service providers will yield immediately increased employment and other economic activity plus long term reductions in cost. It is not the total solution to our economic mess but it is a step in the right direction.

Unlike American institutions such as Independent Sector or the various state nonprofit associations, members of ACEVO are chief executives, from every subsector and every size organization. With more than 2,000 members nationwide, ACEVO is a professional association of leaders, not an organization of organizations.

I marvel at the breadth of their work and the seriousness of their purpose. Most of the ACEVO people I have met are under 40, many closer to 30, and the energy in their crowded offices is palpable. I think the U.S. sector could learn from this group, and perhaps it is time we formed a similar sector-wide leadership association.

But the really interesting piece was a serious discussion of whether, if elected in the fall polls, David will take paid paternity pay, which is his right. Apparently, even Tony Blair took a paltry (by British standards) two weeks paid leave when he was prime minister, appointing someone else to hold the fort while he bonded with his family.

Can you imagine an American politician taking paternity leave – paid no less – right after winning the White House? “Sorry folks, I have to take the 4AM feeding, the world will have to wait.” The UK seems just a little bit more civilized than my own nation every day I am here, as things which would be anathema at home are a matter of course in Britain.

In another article, lauding Obama’s health reform success and trying to explain to a British reader just how strong opposition to it is, the paper writes “Europeans may struggle to grasp how health insurance subsidies could be seen as an assault on freedom. . .but they are part of a battle for the soul of America.”

When I heard this today, from colleagues at a meeting, the only thing I could think to say was, “My God, it sounds like socialism!” When the laughter died down, I discovered that my work here, with UK organizations ACEVO and Capacity Builders, is being financed out of this fund. I always did love socialism.

Seriously, it is inconceivable that America would allow its government to take such an active role in supporting a large portion of the nonprofit sector economy, or is it? Until recently, it was equally inconceivable that our government would bail out the private sector’s financial institutions.

The closest thing the US has to this arrangement is the IRS oversight function. But that is really a policing responsibility, ensuring our sector is obeying the law. There is no unified federal (or state for that matter) effort to ensure the health of our nonprofits.

I couldn’t help him, there is no defense. In the UK, health care is a right, and is not generally the political football we use it for in the US. Brits across the political spectrum support their national health insurance arrangement as the only sane manner to address a nation’s health needs. Everyone here is covered, and everyone pays in, along with their contributions to the UK equivalent of Social Security, charmingly referred to as Old Age Pensions. Premium amounts vary with income and circumstances, not age, gender and health condition.

As a part-time semi-retired cabbie, my new friend pays the equivalent of $20 a month for his coverage. As an American, it was both refreshing and embarrassing to compare health care systems. If health reform dies, it won’t get easier.

There are two principal reasons for this obvious solution not being embraced and implemented. The first is culture. An office-based culture finds it hard to define work as anything that can happen outside the four walls of the building. Work is both a job and a place. But large corporations and nonprofits of all sizes have long embraced this cultural change, enabling people to work from home or the road. The government can do it too.

The second reason is technology. Many government departments have old computer systems and high security concerns, which makes logging in remotely difficult, if not impossible. It is time for those system to be upgraded, allowing our public servants to do their work, without necessarily commuting, and even during a blizzard.

Does your organization have a “snowmaggedon” plan that the Feds could learn from?  How would your organization continue to provide vital services in the face of a commuting disaster?