Nonprofits Cite Headaches in Government Contract Work

Nonprofits Cite Headaches in Government Contract Work

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State governments owed each nonprofit about $200,000 on average, the federal government owed $109,000, and local governments $85,000, the survey found.

The late payments have required groups to tap lines of credit and seek bridge funding from private donors and foundations, says Tim Delaney, president of the National Council of Nonprofits. Those donors, he says, should be outraged.

“They should be upset they are subsidizing government operations.”

Mr. Delaney says that in some instances, changes in policy can help minimize aggravation. For instance, he points to a federal Office of Management and Budget regulation that allows nonprofits to carve out at least 10 percent of government grants for overhead, such as rent and utilities. The change, which will begin in December, could lower the number of nonprofits (currently 75 percent) that say government payments don’t cover the full cost of contracted services, he says.

Source Name: 
The Chronicle of Philanthropy
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