Government Has to Pull Its Weight in Partnership with Non-Profits
At various times over the past decade, I, as well as others, have talked about the importance of the public-private partnership that needs to exist between government entities and nonprofits. Government alone can't solve every problem and nonprofits need the funding and support to reach into those crevices of society where those most in need exist, ensuring the opportunity to demonstrate the value of the concept of philanthropy-love of mankind.
But partnership is the keyword.
When government partners with a nonprofit to help a segment of society, a large part of its responsibility is paying the nonprofit to execute on the agreed-upon terms.
Actually, paying is the key concept.
In a recent report from the New York Council of Nonprofits, followed up by several articles in the New York Times, as many as 2/3 of the nonprofits that partner with the state of New York are not “underfunded” but “delay-funded.” Basically, the state of New York is late on its required payments from one month to as much as one year, putting the nonprofits under immense financial pressure. As a result, several nonprofits have closed because they couldn't make payroll due to the late payments.
And it's expected, with 2/3 of the nonprofits experiencing delays, more nonprofits will close.
And this is not just a New York State problem. Believe it or not, Minnesota reported the lowest late payment issue from the government to nonprofits with 22% of the nonprofits reporting late payments. That was the best. And that is ridiculous.
I'm not immune to the problem. There are times I shake my head when I'm told it takes 60 to 90 days to pay an invoice that I submit to a client. Usually, the larger the organization I deal with, the longer it takes. But I'm a small company that can moderate my expenses and behavior to meet the financial challenge. What is a nonprofit to do, one with hundreds of employees providing mental health, food security, or housing security when the state is six months late on its payment? Unless they can get or have a line of credit, it means closing the doors.
The problem has gotten so bad that the state of California is considering a state law that would assign penalties to the state agencies and pay penalties to the nonprofits if payments are not made in a timely fashion. Similar bills are pending in Kentucky, Maryland, Michigan, North Carolina, and Vermont.
Bureaucracy has such a negative connotation to so many. This kind of situation and these kinds of stories just make it worse. And hurt the exact people the government is trying to help.
