Nonprofits and Government Contracting

FEDERAL
Congresswoman Betty McCollum (D-MN) introduced the Nonprofit Sector and Community Solutions Act (H.R.5533) on June 16, 2010 to provide a vehicle to study how nonprofit organizations and the federal government can work together more effectively and gather comprehensive data about the work of the nonprofit community. The Connecticut Council for Philanthropy has signed onto this bill. See the current list of co-sponsors of the Act. Read Congresswoman McCollum's blog on the Act. Learn more about H.R.5533.

STATE
The Commission on Non-Profit Health and Human Services was created by Special Act 10-5 to analyze the funding provided to non-profit providers of health and human services under purchase of service contracts. The Special Act calls for the Commission to issue a prelinary report of it's findings and recommendations by January 1, 2011 and a final report by April 1, 2011.

REPORTS
The Urban Institute’s report, Human Service Nonprofits and Government Collaboration: Findings from the 2010 National Survey of Nonprofit Government Contracting and Grants, demonstrates that CT is ranked in the top 10 worst states in three significant areas of government contracting. Access the report and related reports below.

Key Connecticut findings and what they mean:

• CT ranks as the 3rd worst state for problems and concerns with late contract payments (beyond contract specifications). This means that nonprofits are providing services under contract with the state and having to wait to get paid, which creates significant cash flow problems. A 2009 CT Nonprofits’ report shows that some providers wait upwards of 90 days to receive state payments.
• CT ranks as the 7th worst state for government payments not covering the full cost of contracted services. Three out of four nonprofits (75%) indicated that government contracts limit the amount of organizational indirect costs (e.g.: administrative costs, rent, utilities, etc.) that will be reimbursed; thus forcing the nonprofit to spend more time raising private donations and less time providing direct care.
• CT ranks as the 8th worst state for government making changes midstream to contracts/grants. Nonprofits in CT are well versed with signing a contract for one deliverable or amount of money and having that changed midway through the year.
• CT ranks in the top 10 best states for having simplified contracting and reporting procedures. While CT state government has taken positive steps towards creating some standard procedures, there is still work to be done to have consistent practices and adherence to those practices across all state agencies.

(from Ron Cretaro, Connecticut Association of Nonprofits)