Join The NonProfit Times: or Become a member

Subscribe: Print Publication or Newsletter

Stay connected.
Stay informed.

Government Doesn’t Pay

By Mark Hrywna - May 30, 2014

Despite the improving economy since 2009, it’s the same story for nonprofits with government contracts and grants: Governments pay organizations late, do not pay the full cost and impose arbitrary caps on reimbursement and indirect costs.

“Government-nonprofit contracting problems first documented in the Urban Institute’s 2010 landmark study were not an anomaly of the Great Recession,” according to the National Council of Nonprofits, which recently released its own data proposing solutions to address contracting problems. The 56-page report, Toward Common Sense Contracting: What Taxpayers Deserve, was a companion of sorts to The Urban Institute’s release of state profiles of its Nonprofit-Government Contracts and Grants: Findings from the 2013 National Survey.

The National Council suggested more than a dozen “common sense solutions,” including prompt payment and contracting laws; reducing redundancy in the application process through an electronic repository or “document vault;” standardized monitoring and reporting and language, and government-nonprofit task forces.

The Urban Institute’s 192-page report breaks out by state the data presented nationally earlier this year. “These state profiles and state rankings can help nonprofits assess their experiences with government contracts and grants and compare their state with other states,” according to the report. Nonprofit-government contracts and grants reached approximately 56,000 nonprofits and totaled $137 billion, and the effects of the recession were still evident.

Problems reported with government contracts and grants in 2009 are not confined to human services nonprofits, although problems are less pronounced for grants than contracts.

Nonprofits in 2012 were still dealing with many of the same issues as in 2009:

  • Nationally, one in five nonprofits reported that the experience with government contracts and grants was worse in 2012 than in previous years, led by 44 percent in Georgia and 40 percent in Utah; the lowest reported was 10 percent in both Massachusetts and Colorado.
  • More than half of nonprofit officials (54 percent) reported a problem with government not paying the full cost of contracted services. The biggest problems were in New Jersey (75 percent) and Rhode Island (74 percent), while the lows were in Colorado (28 percent) and Alaska (31 percent).
  • Officials at almost three in four organizations reported a problem with the complexity of or time required by the government application processes for contracts and grants. The high was reported in Rhode Island (87 percent) while the low was in Mississippi (49 percent).
  • Approximately 44 percent of nonprofits reported a problem with changes to government contracts or grants midstream, once again led by Rhode Island (67 percent) while the fewest problems were reported in Delaware (24 percent) and Washington, D.C. (23 percent).
  • Rhode Island again led the nation (81 percent) when it came to nonprofits reporting problems with governments making late payments on contracts and grants, compared with 45 percent nationally. New Hampshire reported the lowest percentage (14 percent).
  • Precisely half of nonprofits nationwide reported their government contracts and grants limit program administrative or overhead costs. The highest percentage was found in Hawaii (62 percent) while the lowest was Massachusetts (31 percent).
  • Some 53 percent nationwide reported their government contracts and grants limit general administrative or overhead costs, with Hawaii again the highest (72 percent) but this time Nebraska was lowest (33 percent).
  • More than a quarter of organizations (26 percent) reported that government contracts required them to share costs, led by North Carolina (48 percent) and Georgia (47 percent), compared with the fewest in Louisiana (5 percent) and Alaska (9 percent). NPT

Sponsored Podcasts

Welcome to the Raise & Engage podcast, a filters-off series for nonprofit professionals hosted by Blackbaud's straight-shooting expert Danielle Johnson Vermenton. During this open-mic session, you’ll hear honest advice to help YOU do more for your cause.

Episode 6: The Power of ‘No’ at Work|| daniellejohnson-76

You have a job description, but on any given day, you're probably doing dozens of things outside the scope of that description. Combine that with the challenge of a fast-paced environment and the shifting priorities of funders, colleagues, and board members and it’s easy to fall short of doing your best. By being mindful of your limitations and capacity—and saying “no” when your plate is full—you can actually do more for your cause. In the sixth installment of the Raise and Engage podcast Danielle Johnson and Robin Anderson discuss the power of saying “no” at work.

Episode 5: Professional Development: Getting Un-Stuck|| daniellejohnson-76

In the most recent episode of Raise + Engage, Danielle is back with Brian Reich from little m media to discuss how nonprofit professionals can stay motivated and energized in their day-to-day roles. Brian shares his experience working with nonprofits and the lessons and tips he's learn from and shared with them over the years, including tips for avoiding a professional rut, creating forward momentum in your career and pushing yourself outside of your comfort zone. If you're considering making a career move or want to ensure you're on the right path, you won't want to miss this inspo-packed episode!

Episode 4: Apps and Hacks to Stay (Mostly) Sane || daniellejohnson-76

Episode 4: Apps and Hacks to Stay (Mostly) Sane, is all about tips, tricks and tools for sanity. Blackbaud’s own interactive product marketer, Julia Lenz, joins host Danielle Johnson to share some high tech. (and no tech.) productivity tips to help nonprofit professionals stay sane in the crazy world of philanthropy.

Tune in to hear:

  • Tips for how to spend the first 30 minutes of your day
  • The benefits of 15 minute meetings
  • Why notebooks are still relevant to a successful organization
  • Ideas for better managing your inbox
  • Why you should take lunch outside the box
  • ...and much more!
Don’t forget to visit the #NoFilterNonprofit Hub afterwards to download our newest tip sheet10 Productivity Hacks for Nonprofits.

Episode 3: Tech. Connection: Solutions, Strategy, and Staff || daniellejohnson-76

Episode 3: Tech. Connection: Solutions, Strategy, and Staff In episode 3 of the Raise + Engage podcast, Danielle Johnson is joined by Chris Geady and William DaSilva, two IT experts in the nonprofit space, to talk technology integration for NPOs: when you need it, when you don’t, and how to do it successfully.

Tune in to hear:

  • When to say NO to integration
  • How to set your strategic plan before even looking at technologies
  • Ways to get your entire team on board
  • The importance of identifying a project lead
  • The RFP process - how it should and should not go
And William shares a story about a nonprofit that may or may not have still been using a typewriter. You don't want to miss this one!

Episode 2: From Socially Awkward to Socially Awesome! || daniellejohnson-76

According to Danielle Johnson, straight-shooting host of the Raise + Engage podcast series, if your staff members aren’t the number one advocates for your cause on social media, you’re failing. In the most recent episode, Danielle is joined by Blackbaud’s own social media guru Madeline Turner to discuss overcoming social struggles and creating a social ambassador program at your organization. This entertaining and insightful duo dishes on the importance of making your social media presence human, making the case for a formal social program to leadership, how University of Michigan turned a one time social media campaign into a long term social program, and how Madeline's mom unknowingly became a social ambassador on #GivingTuesday.

Episode 1: Corporate Culture & Development: Shake It Up! || daniellejohnson-76

In the premiere episode of Raise & Engage, Danielle is joined by three straight-shooting nonprofit rock-stars: Jodi Smith of Sanford Health Systems, Veronica Brown of Chicago Public Library Foundation and Ali Burke of Southlake Regional Health Centre Foundation. The group talks organizational culture, problem employees, why its important to celebrate and how to shake things up this year and build a better more authentic team that gets stuff done!


Stay informed, catch latest trends in the nonprofit space.

Subscribe to Our Free Newsletter

No obligation, unsubscribe at anytime.

Success! Check your email inbox.

Follow Us On Twitter

NPT 2016 Buyers' Guide

Newsletter Sign-up

click here to return to the previous page