Nonprofits Can't Fix Paul Ryan's Poverty Plan

Nonprofits Can't Fix Paul Ryan's Poverty Plan

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“Governments are offloading their responsibilities, expecting nonprofits to fill the void,” said Tim Delaney, president and CEO of the National Council of NonProfits, the country’s largest network of nonprofit groups. And it’s a mistake to think that any charity can just rely on volunteerism and good will to support its activities.

“Churches and faith-based groups — it’s not through magic they perform miracles either. They have to have the wherewithal to get things done. The notion that any organization or any individual can do it on a sustainable basis without required basic resources, it just doesn’t fly in the face of reality,” said Delaney. 

In fact, nonprofits rely heavily on government grants and contracts to keep afloat in the first place. About 33% of all U.S. nonprofit revenue comes from the government, according to 2011 data from theUrban Institute. By comparison, private charitable giving made up only 13% of all revenue. (Most of the remainder comes from fees for private goods and services like tuition, ticket sales, hospital fees, etc.) 

Even Catholic Charities USA, which Ryan celebrates as an alternative to the federal bureaucracy, relies heavily on federal dollars: More than half of Catholic Charities USA’s annual funding comes from the federal government, Manhattan Institute senior fellow James Piereson writes in The Wall Street Journal,. That totaled $554 million in 2010. (Catholic Charities USA did not respond a request for comment.)

Oftentimes, those dollars don’t cover the full cost of administering social services, furthering exhausting nonprofit resources. More than 50% of nonprofits said that government payments don’t cover the full cost of contracted services, particularly in terms of administrative and overhead costs, according to a 2013 national survey conducted by the Urban Institute. “They still don’t pay the full cost and expect us to deliver miracles,” says Delaney.

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