Human service nonprofits helping families and communities weather the recession report "serious and widespread" problems with their government contracts and grants, according to a new Urban Institute study.
Nearly 33,000 human service nonprofits had government contracts and grants last year, which provided the single largest source of revenue for 62% of them. The nearly 200,000 contracts totaled about $100 billion.
Government contracts with Wisconsin nonprofits are under-funded, difficult to apply for and sometimes paid late, according a new survey of nonprofits by the national Urban Institute. The think tank says government’s bad habits only make finances tougher at a time when demand for social services provided by nonprofits is expanding but funding is declining.
“While pain from the recession may have been avoidable, better government management of contracts and grants can at least avoid adding to nonprofits’ financial stress,” the report says. Its results, when compared to those of a recent Greater Milwaukee Foundation study, suggest that nonprofits in the Milwaukee metro area a faring better than those elsewhere in the state.
The District is routinely late in payments to nonprofit human services providers, and has the most complicated and lengthy grant process in the country, according to a new study that ranks D.C.'s among the worst contracting processes nationwide.
The Urban Institute examined more than a dozen aspects of the contracting process for nonprofit groups that provide human services in all 50 states and D.C. and found that the District consistently ranked among the most problematic in key categories. Maryland and Virginia fared far better than the District, ranking in the top half in most categories.
Problems with government grants and contracts have exacerbated the already-dire economic situation for human service organizations. A first-of-its-kind report from the Urban Institute reveals that a significant number of these non-profits are not getting paid on time. And that's just the beginning.
National Council of Nonprofits CEO Tim Delaney says the research project started after hearing about a number of non-profit leaders who had to borrow money against their own homes or take money from 401(k)s to make payroll because the government was not paying them on time. But it's not just non-profits with government contracts that are hurt by the problem. Taxpayers are sometimes paying for auditors at four or five state agencies to look at the exact same documents. Tim adds that when non-profit employees are laid off because government is not paying on time, that creates a drag on the broader community. For example, the state of Illinois owes nearly half a billion to more than 2,000 non-profits for the first six months of this year alone: "These are significant dollar amounts that are then not going through our economy."
There’s a popular urban myth that public funding directed at nonprofits is a source of great waste, fraud and abuse. In truth, of course, the vast majority of nonprofits do excellent, dedicated work at a bargain price. Unfortunately, as with so many other areas of the public policy debate, a few high profile bad apples can poison public perceptions. That’s been the case in North Carolina in this area in recent years.
Happily, a new report released this week by the Urban Institute and supplemented by the good folks at the N.C. Center for Nonprofits helps set the record straight. The truth? In most situations in which nonprofits are attempting to make use of public resources to do important work, it isn’t the nonprofit that’s the problem. In fact, problems are much more typically matters of government bureaucracy making things unnecessarily difficult.
Illinois is ranked first among states in late payments to charities that are struggling amid already shrinking government funds, according to a new report by the Urban Institute, writes the Chicago Tribune.
Laurel O'Sullivan, vice president of Donors Forum, in Chicago, said many human-service groups are struggling because of the Illinois’s financial woes. "The Land of Lincoln has really become the land of late payments," said Ms. O'Sullivan.
I have read dozens of stories about Illinois that go like this: nonprofit X hasn't gotten a payment for services from the state of Illinois in Y months, and will shut down in Z days if the state doesn't pay up.
Sound familiar? Well, it turns out these nonprofits aren't just being cry babies. Skinny state pocketbooks have meant late payments and deficits all over the nation. But in a study of nonprofits nationwide, Illinois is the worst when it comes to paying on time.
These nonprofits provide all kinds of important services - emergency heat assistance, medical clinics, child care, rehabilitation, elder care, mental health - to the state's most vulnerable residents. But 72 percent of Illinois nonprofits report late payments from the state, many as late as 90 days or more, says a study by the Urban Institute.
“The unfortunate reality is that we’ve got a broken system that needs fixing,” says Jane Kendall, president of the N.C. Center for Nonprofits. “It affects everyone in North Carolina – from people needing basic human services to all taxpayers. There’s also a trickle-down effect to other nonprofits that don’t receive state funding because foundations, corporations, and individuals who support nonprofits are being asked to pay for more of the essential services that human service organizations provide on the state’s behalf. The Center and our 1,500 member nonprofits want to work with state government to make needed improvements.”
The report provides national and North Carolina data on contracting practices between government and human services nonprofits in 2009. The report included 972 organizations in NC that provide a broad range of services, including: assistance for children, families, seniors, persons with disabilities, and victims of domestic violence; housing and shelter assistance; food and nutrition support; youth development; employment assistance; legal help; and community and economic development
Nonprofit groups are facing a growing wave of problems with the way the government processes and awards contracts that are supposed to help these groups provide services to the needy, according to a new report by the National Council of Nonprofits.
In the report—“Costs, Complexification, and Crisis: Government’s Human Services Contracting 'System’ Hurts Everyone”—the council says these problems have been exacerbated by the bad economy.
“That the 'system’ for contracting for human services is broken cannot be denied: Governments contract with nonprofits to deliver needed services but then don’t pay full costs, sometimes don’t pay at all, and too often use administrative processes that seem designed to exhaust rather than assist communities,” said Tim Delaney, chief executive of the National Council of Nonprofits.
The nonprofit sector gets shortchanged, underfunded, and sometimes undone by the broken system of government contracting and payments to nonprofits. So concludes two companion studies: An Urban Institute survey of some 3,500 nonprofit human service providers examining how they are faring—in many cases, suffering—with government contracts in 2009, and a report from the National Council of Nonprofits on the system of government contracting that NCN calls “an archaic, cobbled-together, patchwork arrangement” that has undone the nation’s social safety net. Both Urban and the NCN explain that the losers in the “nation’s long-ignored and severely broken system of government contracting are the communities that are supposed to be served by nonprofits and the taxpayers who end up footing the bill for the waste and inefficiency of government’s contracting with human services nonprofits.
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