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

Abstract

This report explores the results of the 2010 National Survey of Nonprofit-Government Contracting and Grants, a study of human service organizations designed to document the extent of nonprofit-government contracting, processes and problems. It also examines the impact of the recession on these organizations and the cutbacks they have made to keep their programs operating. While contracting problems are not new, many are exacerbated by the deep recession that has reduced government budgets and private contributions. Nearly 33,000 human service nonprofits have government contracts and grants, and 9,000 organizations with expenditures over 100,000 were surveyed for this study.

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Introduction

The recession crippled the budgets of many nonprofits just as demand for their services rose. On top of shrinking revenue from donations and fees, many organizations struggled with ongoing payment problems from one of their biggest funders—government agencies. As a result, many were forced to cut services and staff or close program sites, hurting the communities they serve. While pain from the recession may have been unavoidable, better government management of contracts and grants can at least avoid adding to nonprofits’ financial stress.

Governments rely heavily on nonprofits to deliver a range of critical services, from homeless shelters to child care to job training, but little is known about the size and scale of these relationships—or how effective they are. This report offers a comprehensive look at the scope of government contracts and grants with human service nonprofits in the United States and documents the problems that arise. We also assess how these nonprofits were affected by the recession, how they responded to shrinking revenues, and how flaws in government contracting practices intensified their budget woes.

While donations and fees are crucial to human service nonprofits, many organizations rely heavily on revenues from government contracts and grants to expand their reach. Recent anecdotal press reports, regional studies, and small surveys describe a variety of problems related to government contracting: problems that are not new, but, for many nonprofits, were exacerbated by the recession, forcing them to make severe cutbacks in their staff and operations.

The findings reported here are based on a national study of human service nonprofits. We surveyed a random sample of human service organizations with more than $100,000 in expenses in eight human service program areas (table 1). All estimates are weighted to represent the entire U.S. human service nonprofit sector that had government contracts and grants in 2009. We explore the relationships between nonprofits and government contracting by program area, organization size, and level (federal, state, local) of government contracts. Context is important; policies and practices differ in each of these categories.

This study reveals how important government funding is to nonprofits, as well as how varied and often complex those relationships can be. We hope this information will help nonprofits and government agencies work together to solve the problems documented in this report and more effectively serve their communities.

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Publications on Human Service Nonprofit-Government Contracting

National Study of Nonprofit-Government Contracting: State Profiles

Contracts and Grants between Human Service Nonprofits and Governments

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