Government agencies in at least 19 states are delaying payments promised under existing grants or contracts to nonprofit agencies, according to a survey conducted by the Alliance for Children and Families and United Neighborhood Centers of America in April, 2009.
Delayed payments have forced many of these nonprofit agencies to tap existing lines of credit.
However, many report that these lines of credit have been cut back, or that it has become more xpensive to borrow against them. In some cases, resulting cash flow problems have led to job uts and reduced service provision for clients of these agencies.
The Washington office of the Alliance for Children and Families and United Neighborhood enters of America conducted a survey of member and non-member nonprofit organizations from pril 9 through April 28, 2009. The survey (see Appendix A) asked members about grants and ontracts that are either fully or partially federally funded.
The Alliance membership includes 360 nonprofit organizations across the nation that provide ervices and economic empowerment to children and families.2 The UNCA membership includes 46 nonprofit agencies that provide a variety of community-based services.
The survey was sent via email to members and allied non-member organizations subscribed to ublic policy email lists run by the Washington office. It was distributed through two separate istservs on April 9 and April 22 and was posted on the Alliance web site on April 15.
A total of 96 nonprofit agencies responded from 30 states. Some states had a much higher esponse rate than others. Responding organizations are all nonprofit social service providers rom the human services field, though because respondents are primarily member organizations f the Alliance or UNCA, they are not necessarily representative of the entire field. Responses ust be considered anecdotal and a starting point for further research.
1 For more information, contact Varina Winder, Policy Analyst, at (202) 429-0400 x16, at firstname.lastname@example.org or email@example.com.
2 For more member-specific information, please see the member directory on the Alliance
3 For more information on UNCA, please see the UNCA website at: http://www.unca.org/.
Nonprofit agencies in 19 states reported that their organizations have experienced late payments rom state or local governments, including AZ, CA, CT, FL, GA, HI, IL, IN, LA, MI, MN, NC, NV, WY, OR, PA, RI, TX and WI. Agencies in 11 states reported no delayed or missed payments, including AL, AR, IA, KY, MA, MO, NJ, OH, SC, TN and WA.
Agencies experiencing delayed payments all reported negative impacts on their organizational cash flow. For some, this has led to staff reductions and hampered program services. As one agency in Arizona described it, programming and service delivery have suffered because the agency has had to “[rob] Peter to pay Paul.”
Almost every agency experiencing late payments reported relying extensively on lines of credit to ake up for cash shortfalls. Many reported that those lines of credit have been reduced or that it has become more expensive to borrow against them. Some agencies have also taken out loans o cover staff salaries and keep programs operational.
Agencies in some states are struggling more than others; for example, in Michigan, late payments combined with the declining auto industry, decreased community donations and increased demand for agency services has led to a significant negative impact on agencies.
The following is a summary of survey results, grouped according to state. No responses were received in states not listed.
Texas: Both responding agencies in Texas reported experiencing delayed payments, although yne agency has already taken steps to fix the issue by meeting with the appropriate state department, whose delays seemed to have been caused by changes in personnel. One agency reported that the Texas Department of Family and Protective Services, the City of San Antonio, Bexar County and the Texas Health and Human Services Commission have all been delayed in their payments. Delays have ranged from 30 to 45 days and have affected Families & Schools together as well as some San Antonio city programs.
About the Alliance for Children and Families and United Neighborhood Centers of America
The Alliance for Children and Families, a nonprofit association, was formed by the 1998 merger
of Family Service America and the National Association of Homes and Services for Children. The
Alliance represents 360 nonprofit organizations across the nation that provide services and
economic empowerment to children and families. Alliance agencies cover a wide spectrum of
providers, including a diversity of faith-based organizations and nonsectarian agencies.
Together, these organizations deliver more than $2 billion annually in services to more than 8
million people in nearly 6,700 communities across the United States. More information about the
Alliance is available at www.alliance1.org.
United Neighborhood Centers of America (UNCA) is a voluntary, nonprofit, national organization
with neighborhood-based member agencies throughout the United States. Formerly known as
the National Federation of Settlements and Neighborhood Centers, it was founded in 1911 by
Jane Addams and other pioneers of the settlement movement. More information about UNCA is
available at www.unca.org.
For more information, contact the Washington office of the Alliance and UNCA at:
Alliance for Children and Families
United Neighborhood Centers of America
1001 Connecticut Ave., NW, Suite 601
Washington, DC 20036