NY State budget cuts imperil future of nonprofit logistics subcontracting firm

The New York legislature has cut $700,000 in state funding to The ReHabilitation Center, a nonprofit group that hires disabled individuals to work in various industries, notably the logistics field. The action will make it harder for the group to find work for severely disabled people, according to one of its top executives.

Brian Eddy, the Olean, N.Y.-based organization's general manager, business development and marketing, said the cuts, which are permanent, will reduce its budget by 4.5 percent. The cuts are part of $90 million in annual state budget reductions that will hit all nonprofits, Eddy said. The state had originally cut $120 million in annual funding to nonprofits. However, lawmakers voted to restore $30 million of the cuts.

One of the group's most visible divisions is SubCon Industries, which provides traditional forward and reverse logistics support services to large third-party providers that have overflow work that they would rather offload than do themselves. The unit, which employs approximately 200 people, was formed more than 50 years ago to provide forward logistics services. It expanded into reverse logistics in 2005.

Eddy said the budget cuts came as a shock to the organization. "We must adapt in order to survive," he said in an e-mail last week to DC Velocity.

Eddy said the organization will explore potential alliances with for-profit organizations that may be interested in collaborating to build what he termed "social enterprises" that could benefit the for-profit companies while still providing work for those who need and want it.

Since its founding, the group has been committed to not turn away any individual who wants to work. Many of the workers it places have disabilities of a profound nature. DC Velocity first reported on the group and its efforts in the fall of 2011.

"We are trying to see what we can do to maintain the quality of our services and to remain focused on our core mission to create brighter futures for people with disabilities," Eddy said last week.