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HARTFORD, CT, October 7, 2010 - Connecticut Association of Nonprofits (CT Nonprofits) released today the following analysis of the first national survey documenting the serious and widespread problems experienced by nonprofit human service providers under contract with governments at the local, state and national levels. Based on a report issued by the Urban Institute, the report “Human Service Nonprofits and Government Collaboration: Findings from the 2010 National Survey of Nonprofit Government Contracting and Grants” provides essential national and Connecticut-specificdata on contracting practices. It also ranks states from worst to best on several areas of concern to individuals in need of services, to taxpayers, and to entire communities.
“The news from the Urban Institute report confirms what nonprofits and the people we serve have known since well before the recession began: the contracting system is broken and all of us in the community are paying the price,” said Ron Cretaro, Executive Director. “Fixing the system for the benefit of the people of Connecticut must be an imperative of nonprofits and policymakers, including candidates for office, and we call on all parties to commit to working together for responsible solutions.”
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.
CT Nonprofits calls on the nonprofit community and policymakers to take action:
Partnering to support CT: Nonprofits and CT state government must establish a cooperative relationship through which we both, as partners, work through practical, procedural, and fiscal problems. Together we must develop solutions that ensure people get the services they need when they need them, that taxpayers receive full value for the programs they are funding, and that communities are strengthened. A 2010 CT Nonprofits’ economic report discusses several ways in which nonprofits and state government can strengthen our partnership.
Leadership: The residents of the State deserve a government that is held to the highest standards of accountability, efficiency, and compliance with the laws. The Governor and all constitutional officers of the State must commit to providing the leadership necessary to enforce the contracting laws already on the books, including prompt payment requirements, and to hold agency heads accountable for improving the performance of their agencies.
Integrated Procurement System: The State should consolidate the contracting, oversight and payment functions into an integrated procurement system. Designed correctly, an integrated system would enhance public transparency, cost effectiveness and time efficiency. An advanced model of a highly integrated system is being developed in Florida (MyFloridaMarketPlace) that automates the State’s order, approval, invoicing, and payment processes. Other successful models are being utilized in Virginia (eVA) and Wisconsin (VendorNet).
Further Reading: In conjunction with the release of the Urban Institute's survey results, the National Council of Nonprofits issued a Special Report that provides additional context to the Urban Institute findings, including identifying specific practices that contribute to the problems nonprofit human services providers have experienced. The National Council’s report also explains how the contracting problems affect people receiving services and entire communities, and proposes solutions that nonprofits and government officials can adopt to improve services for individuals, restore value for taxpayers, and strengthen communities.
Connecticut Association of Nonprofits (CT Nonprofits) is the largest membership organization in the state dedicated exclusively to working with nonprofits in Connecticut. As the voice of nonprofits, the association has advanced the social and economic impact of nonprofits for over 30 years. CT Nonprofits helps members focus their energy on the people and communities they serve by connecting organizations with information, education, advocacy and collaboration. For more information, please visit www.ctnonprofits.org.
Related story: Nonprofits skewer CT’s contracting record, Hartford Business Journal