Human Service Nonprofits and Government Collaboration: Findings from the 2010 National Survey of Nonprofit Government Contracting and Grants

Hu manServiceNon profits andGovernment CollaborationFind in gs fro m the 20 10 Nat io na l Su rv ey ofNo np ro fit Go ver nment Con tracting an d Gran tsElizabethT. BorisErwin deLeonKatie L. RoegerMilenaNikolova2100 MStreet,NWWashington,DC20037ph202.833.7200fax 202.467.5775http://www.urban.orgHumanServiceNonprofitsandGovernmentCollaboration12306-00_C1-Spi-C4_rev2.qxd 10/4/10 9:07 PM Page 1 Human ServiceNonprofits andGovernmentCollaborationFindings from the 2010 NationalSurvey of Nonprofit GovernmentContracting and GrantsElizabeth T. BorisErwin de LeonKatie L. RoegerMilena NikolovaCenter on Nonprofits and PhilanthropyOctober 2010 Copyright © 2010. The Urban Institute. All rights reserved. Except for short quotes, no part of this reportmay be reproduced or used in any form or by any means, electronic or mechanical, including photo-copying, recording, or by information storage or retrieval system, without written permission from theUrban Institute.The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that exam-ines the social, economic, and governance problems facing the nation. The views expressed are those ofthe authors and should not be attributed to the Urban Institute, its trustees, or its funders. iiiContentsExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Human Service Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3A Detailed Look at Government Contracts and Grants with Nonprofits . . . . . . . . . . . . 5Payment Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Matching Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Program and Organizational Administrative Expense Limitations . . . . . . . . . . . . . . 9Feedback to Government on Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Contracting Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Failure to Cover Full Program Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Complex and Time-Consuming Reporting and Application Requirements . . . . . . 13Changes to Contracts and Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14The Recession’s Effect on Nonprofit Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Reduced Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Government Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Fee Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Coping with Reduced Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Contracting Problems Intensified Reduced Revenues . . . . . . . . . . . . . . . . . . . . . . 19How Contracting Experiences Have Changed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Appendix A: State Rankings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Appendix B: Survey Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 ivList of figuresFigure 1. Human Service Nonprofits with Government Contracts by Type of Organization and Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Figure