NCN compiles worst government contracting abuses
The National Council of Nonprofits is now conducting wide-reaching research into the many ways local, state and federal governments are making it difficult for nonprofits to deliver high-quality services in local communities.
Governments and nonprofits serve the same constituents in the same communities and therefore have a natural partnership. In times of disasters, through grants or via contracts, nonprofit organizations do the work of governments to address the most pressing needs in our communities.
In recent years, however, many governments have adopted practices that erode, cripple or shortchange the ability of their nonprofit partners to do the work they have called them to do. Some states have delayed payments more than a year. Others have imposed hidden taxes and fees. In addition, some State governments have kept for themselves federal money dedicated to programs and services.
While not all states are abusing nonprofits, the trend is heading in the wrong direction. The Council has compiled a list of the Five Worst Government Contracting Abuses that have been documented so far:
- Late Payments, Forced Loans – Governments failing to make contract payments, even when the nonprofit had fully performed, sometimes withholding payments for more than a year, thus effectively forcing nonprofits to bankroll government operations.
- Profiting from Nonprofits – Governments taking for their own use a significant percentage of federal grant funding from nonprofits and requiring nonprofits to raise and pay for part of the costs.
- Using False, Out-of-Date Rates – Governments using reimbursement rates that haven’t been adjusted for years and don’t come close to covering actual costs.
- Waive Rights, or Else! – Governments requiring nonprofits to waive their statutory rights to receive prompt payments – or lose the contracts.
- Shortchanging Nonprofits – Governments charging nonprofits a fee for administering contracts and demanding discounts for making contract payments on time.
Click here to read more or to share your story. Together, nonprofits can find solutions and restore the nonprofit-government partnership.
