Policymakers can help mitigate two major challenges facing nonprofits: disproportionately steep cuts in state funding and contracting practices that undercut t nonprofits' ability to effectively deliver services. The first step, however, is recognizing and acknowledging these dual problems.
Overall, North Carolina nonprofits experienced a 26 percent decline in state support last year. According to a recent report from the Urban Institute, North Carolina's decreased investment in nonprofits was the fourth-worst of any state.
The Urban Institute report and a new survey by the N.C. Center for Nonprofits highlight many systemic government contracting problems that nonprofits are experiencing.
Latest Government Contracting News
Posted: December 12, 2010
View the full story: The Herald-Sun
Posted: December 9, 2010
View the full story: Guidestar.org Blog
A new study underscores the vulnerability of state and local revenues and how it is beginning to impact nonprofit organizations. Released by the National Council of Nonprofits, the special report concludes that “The decisions to rely on nonprofits to provide services have sound policy, economic, and administrative justifications. Yet the convoluted, disjointed, and patch-worked laws and practices by which governments contract with nonprofits have led to nonpayment, underpayments, and late payments to nonprofits, in part because contracting and reporting processes have become excessively complex and irrational.”
The report lists a few of the problems occurring in many states:
- Government does not pay full cost of the services provided
- Contracts terminated mid-term
- Salaries frozen or reduced
- Jobs eliminated
- Late payments
- Benefits eliminated
- Burdensome contracting
- Excessive reporting requirements
Posted: December 5, 2010
View the full story: Honolulu Star Advertiser
Late payments are not the only contracting challenge for nonprofits. Two national organizations recently released studies on the widespread problems nonprofit providers experience with government contracts. In October, the Urban Institute released a report, "Contracts and Grants between Human Service Nonprofits and Governments." The National Council of Nonprofits released a companion special report, "Costs, Complexification, and Crisis: Government's Human Services Contracting 'System' Hurts Everyone." Both give a solid background to this nationwide issue.
The Urban Institute report ranks Hawaii as eighth in the nation for government midstream changes to contracts and 15th for late payments to nonprofit providers. Other problems include complex application and reporting processes and contract payments that don't fully cover costs.
HANO is committed to facilitating discussions around these issues and welcomes working with government colleagues and community partners to restore the essential government-nonprofit partnership to better serve Hawaii's people.
Posted: December 1, 2010
View the full story: The Nonprofit Times
More than half of nonprofit human service organizations encountered trouble during the past year with either government contracts or grants. Of the 33,000 human service providers nationally there were nearly 200,000 government contracts and grants in 2009.
According to a study by the Urban Institute in Washington, D.C., late payments, complicated applications and funding cuts are among the many problems human services nonprofits are facing in contracting with government at all levels.
In its report, National Study of Nonprofit-Government Contracting: State Profiles, organizations often had to take drastic measures to make up for these funding issues, with 42 percent reporting a budget deficit in 2009. Half of all organizations surveyed cut or froze employee salaries and approximately 40 percent of human services organizations drew on reserves or cut staff.
Posted: November 4, 2010
View the full story: Stanford Social Innovation Review
According to a groundbreaking new report out by the National Council of Nonprofits with data by the Urban Institute, they cite a national epidemic of government not living up to its end of the contracting relationship. The report highlights several areas; I will briefly outline two state government examples. The first is the Illinois’ Comptroller’s fifty-page list of more than two thousand nonprofits that the state has failed to pay almost half a billion dollars in just the first six months of 2010. The second example is the New York’s Comptroller’s findings that 92.5 percent of the state’s contracts with nonprofits were late and the state had delayed paying numerous nonprofits for multiple years.
Posted: October 27, 2010
View the full story: CAForward
Let me add one more broken California government system to those listed in Joe Mathews' blog posting on caforward.org on Oct. 18. His list included the state's initiative process, budget process, and election process, and I add the glaring inadequacies of the state's contracting system with the scores of nonprofits that partner with agencies year in and year out - on-time budget or not - to feed the hungry; teach our children; assist our seniors; and clean up our bays, rivers, and much more. Though not as headline-grabbing as declining donations and government funding cutbacks, the flaws in the contracting system drain our tax revenues as they divert and delay precious dollars needed to meet community needs.
A report from the National Council of Nonprofits released earlier this month highlights the nationwide scope of this problem, calling attention to research by The Urban Institute, which found that our current system of government contracting is “an archaic, cobbled-together, patchwork arrangement” that has undone the nation’s social safety net.
Posted: October 25, 2010
View the full story: Your News Now
NYCON, the New York Council of Non Profits, says it's a problem that can only get worse. Many of the non-profits are expected to fulfill their government contracts before they get renewed or paid out. A typical late payment is three to four months after the contract starts. This year, it's more like seven or eight months. And non-profits are paying the price.
"Programs are getting cut, staff laid off, people aren't getting paid and organizations are going out of business," said Doug Sauer, NYCON CEO.
NYCON is now working with several charities to figure out what programs may need to be cut or adapted just to keep their doors open.
Posted: October 21, 2010
View the full story: Philanthropy Daily
Husock’s report makes a good companion piece to the Urban Institute’s recently published “Human Service Nonprofits and Government Collaboration: Findings from the 2010 National Survey of Nonprofit and Government Contracting Grants.” Like most reports from the Urban Institute, there is a wealth of eye-popping data on the so-called independent sector. Husock’s essay and the Urban Institute’s report give readers two valuable perspectives on the problems inherent in a government-financed nonprofit sector. The inefficiencies of the government contracting process reported by the Urban Institute ought to be a cautionary tale for SIF enthusiasts.
Posted: October 18, 2010
View the full story: Philanthropy Journal
Human-service nonprofits reeling from the troubled economy are reporting "serious and widespread" problems with government contracts and grants, a new study says.
Forty-one percent of human-service nonprofits say government agencies made late payments in 2009, for example, while 24 percent say delinquent payments are a big problem, according to the study by the Urban Institute.
With over 40 percent of nonprofits saying they faced a deficit in 2009 as a result of the recession, 56 percent reported less revenue from state governments, 49 percent from local governments, and 31 percent from the federal government, says the study, Human Service Nonprofits and Government Collaboration: Findings from the 2010 National Survey of Nonprofit Government Contracting and Grants.
Posted: October 15, 2010
View the full story: Corridor Inc.
Since the 1970s, the state has leaned toward hiring nonprofits to deliver health and social services on behalf of state and local jurisdictions, according to Henry Bogdan, public policy head of the Maryland Association of Nonprofit Organizations. Services range from community health centers and domestic violence programs, to job training and child care.
Bogdan said the current procurement process is too complex. He cited ongoing concerns among the nonprofits, many of which are small organizations with limited resources and personnel. “You are using staff time at the provider level and at the state agency level,” he said.
On Oct. 7, the Urban Institute’s Center for Nonprofits and Philanthropy, in collaboration with the National Council of Nonprofits, issued a national survey on procurement. The study showed that procurement problems are widespread across the country.
That same day, the National Council of Nonprofits issued its own related report, which called the state and federal contracting systems “archaic” and characterized procurement issues as “a silent national crisis.”
In a state-by-state comparison in the National Council of Nonprofits report, Maryland ranked 32nd worst in the complexity of reporting requirements for state contracts.
Contact Us