government funding

Government contracts and nonprofit organizations: Problems and solutions

posted by
Jeremy Higbee,

Freelance Writer

There is a long history of nonprofit organizations partnering with the government, usually at the state level, through contracts to help provide for and respond to community needs. Through this powerful partnership, local services have improved, such as: enhanced human services, increased community development, greater economic development, and superior environmental protection.

Although these positive developments are possible, the Urban Institute Center on Nonprofits and Philanthropy and the National Council of Nonprofits are well aware that there are many challenges and problems that have wormed their way into the system. In 2010, the Urban Institute conducted the first comprehensive national survey of nonprofits to assess the problems with government contracts and nonprofits (view the full report here).

Here are the problems they found:

Research Friday: Government contracting in the new normal


posted by
Anjali Deshmukh,
Associate Director

Angela Francis,
Senior Associate
Nonprofit Finance Fund

Welcome to Research Friday! As part of a continuing series,we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Nonprofit Finance Fund’s (NFF) 2013 State of the Sector survey explored a variety of financial and management challenges facing organizations across the country. The core story, as told by nearly 6,000 respondents, is of a fragile balancing act between rising community need and shrinking or stagnant resources for social programs. Particularly in the last several years, in the wake of the financial crisis, organizations have struggled with a variety of challenges related to government support.

In the United States, we rely on government to provide key economic supports. We expect the federal, state, and local governments to play a role in educating our children, helping communities rebuild after natural disasters, and improving our collective quality of life. To deliver on this mandate, services like public education are administered by the government, while many other complementary programs - such as job training and placement - are outsourced to nonprofits. According to a 2010 Urban Institute study, nonprofit organizations (with records of income data) reported that nearly one-third of their revenue sources came from the government.