Nonprofits & Government

As we have seen locally, many nonprofits that have become dependent on government funding are struggling, some even having all their funding cut off.

This new report from The Urban Institute examines the situation in relation to human service nonprofits.

An excerpt.

“The recession crippled the budgets of many nonprofits just as demand for their services rose. On top of shrinking revenue from donations and fees, many organizations struggled with ongoing payment problems from one of their biggest funders—government agencies. As a result, many were forced to cut services and staff or close program sites, hurting the communities they serve. While pain from the recession may have been unavoidable, better government management of contracts and grants can at least avoid adding to nonprofits’ financial stress.

“Goodwill, Boys & Girls Clubs of America, the American Red Cross, homeless shelters, food banks, and child care centers—these are just a few examples of human service organizations that Americans count on every day. Although human service nonprofits are heavily funded by government, which extends their reach, little is known about the size and scale of these contracting relationships or how effective they are. This study aims to provide a comprehensive look at the scope of governments’ contracts and grants with human service organizations in the United States and document the problems that arise. We also assess how these nonprofits were affected by the recession, how they responded to shrinking revenues, and how flaws in government contracting practices intensified their budget woes.”