Governments Shifting Costs to Not-for-Profits by “Fiscal Bullying”

According to a new survey sponsored by the Nonprofit Finance Fund, State and Federal agencies are dramatically shifting the costs of their services onto the not-for-profit sector, expecting organizations with tight budgets and minimal reserves to absorb the costs of chronic underfunding of social services and other programs:

Sponsored by the Bank of America Charitable Foundation, the survey . . . found that organizations dependent on public-sectorBully funding face particular challenges, with only 14 percent of the nonprofits that receive state and local funding reporting they were paid for the full cost of services and just 17 percent of federal fund recipients receiving full reimbursement. Moreover, even when government does reimburse nonprofits in full for services rendered, it is often late to pay. According to the survey, more than 60 percent of nonprofits receiving state or local funds reported overdue payments, while more than 50 percent who receive funds from the federal government reported late payments.

The Foundation Center has the story.  The full report is available here.  So rather than find ways to fully fund or support these services, government agencies appear to be participating in what amounts to fiscal bullying:  They contract with not-for-profits for services, deliberately underprice the services for which they are contracting and then are habitually delinquent in meeting their financial obligations to these agencies.  All of which works to the advantage of the government agencies and leaves many small not-for-profits hamstrung as they try to serve those in need in their communities.

Argghh. . . .

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