Posted on May 3, 2009

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Some States Delaying Payments to Nonprofits, Survey Finds

Government agencies in some states are delaying payments promised to nonprofits under existing grants or contracts, a survey conducted by the Alliance for Children and Families and United Neighborhood Centers of America finds.

The survey of nearly a hundred nonprofit social service providers from thirty states found that respondents in nineteen states reported receiving late payments from state or local governments, while organizations in eleven states reported no such problems. Organizations that received delayed payments all reported negative impacts on their organizational cash flow, which for some has led to job cuts and reductions in services, while almost all reported relying extensively on lines of credit to make up for cash shortfalls. At the same time, many groups reported that their lines of credit have been reduced or that it has become more expensive to borrow against them.

The survey also found that nonprofits in some states are struggling more than in others. In Michigan, for instance, late payments combined with an auto industry in decline, fewer donations from members of the community, and increased demand for services have created a perfect storm for many nonprofits. Meanwhile, problems with Medicaid payments have been a headache for nonprofits in Wisconsin, though the problem may have more to do with new computer systems and software implementation than cash flow.

“Some States Are Delaying Payments to Nonprofits.” Alliance for Children and Families Press Release 5/30/09.

Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Economic Crisis
Location(s): National

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