CT Nonprofits Policy Reports

The Economic Health and Impact of Nonprofits in Connecticut (2010)

Nonprofits are needed now more than ever to assist struggling Connecticut individuals and families as the state continues its economic recovery. To do so, there must be an honest recognition that nonprofits are an engine of economic growth and provide for the stability of our population across our social and economic landscape. The state must work with us, not against us, to ensure our continued viability.

This report examines the impact of the current economy on nonprofits in Connecticut, including data from a January 2010 survey of CT Nonprofits’ membership. It also looks at the role of nonprofits in the state’s economic recovery efforts, as well as the partnership between nonprofits and state government, specifically in three main areas: (1) contracting, (2) accountability / reporting, and (3) funding.

How Late Payments Harm Nonprofit Providers

In 2009 CT Nonprofits surveyed approximately 500 members to assess how nonprofits were faring in the midst of the financial crisis. The survey focused on government funding and timely contract payments, including how those contract payments relate to a provider’s cash flow and use of credit lines. The following data is derived from the responses of 119 nonprofit organizations. Here’s what we found:

• 88% of respondents receive government funding
• 42% of state-funded providers report receiving late contract payments from the state
• 84% received payments issued by DSS at 60 days late; 70% received payments issued by DCF at least 30 days late
• 66% of respondents have a line a credit which they access in case of emergencies, such as late payments by the state
• 39% of respondents report a decrease in cash flow over the past year, with 43% of those respondents beginning to decrease staff size and 37% reducing employee benefits

Survey results clearly demonstrate that a problem exists for Connecticut’s nonprofit providers. Late contract payments from state agencies create cash flow problems, which in turn require providers to access funds from lines of credits and budget reserves. Both options ultimately result in increased costs to the provider. All of this compounded by inadequate funding is seriously jeopardizing the services that nonprofits provide to their local communities.

Read the full report.