Nonprofit-Government Contracting and Grants in Tough Times The Urban Institute Center on Nonprofits and Philanthropy Meeting and Webcast February 2, 2010 The National Grants Partnership

The Study The Urban Institute  First national survey on nonprofit human service providers and impact of government contracting and grant policies.  A collaborative project between the Urban Institute’s Center on Nonprofits and Philanthropy and the National Council on Nonprofits  Funded by the Bill and Melinda Gates Foundation.  The survey will be conducted by the Urban Institute with the assistance of the Social and Economic Sciences Research Center at Washington State University.

States and the Recession The Urban Institute In 2009, “the budgetary pressures that have led states to implement cuts are intensifying and are unlikely to recede any time soon.” Cuts enacted in at least 43 states plus the District of Columbia are occurring in all major areas of state services, including health care, services to the elderly and disabled, K-12 education, higher education and other areas. Source: Johnson, Nicholas, Phil Oliff and Erica Williams “An Update on State Budget Cuts.” Washington, DC: Center on Budget and Policy Priorities.

States and the Recession The Urban Institute  In Minnesota, Governor Pawlenty cut an additional $236 million out of health and social service programs and $300 million out of aid to municipal governments, after the legislature had already eliminated a billion in expenditures.  In New York, Governor Paterson decided to withhold aid to municipalities and schools in order to create a “necessary” $750 million state cash “cushion.” Source: Cohen, Rick “The Ghost of Christmas Future: State Budget Deficits in 2010.” The Nonprofit Quarterly (online).

States and the Recession The Urban Institute  In Louisiana, Governor Jindal has proposed cuts to the Department of Health and Hospitals and to higher education (the largest areas of government expenditures) to cover three-fourths of the projected FY2010 budget deficit in addition to across-the-board cuts laid on every state department. Source: Cohen, Rick “The Ghost of Christmas Future: State Budget Deficits in 2010.” The Nonprofit Quarterly (online).

Nonprofits and the Recession The Urban Institute  In Minnesota, 60% of organizations had an increase in demand for services in 2009 compared to 42% in  The ability to meet this need is undercut by the reduction in revenues.  To manage the effects of the recession, nonprofits are reducing their number of employees, implementing hiring and salary freezes, and reducing employee benefits.  Survey respondents predict an even gloomier Source: “2010 Nonprofit Outlook.” Minnesota Council of Nonprofits (online).

Nonprofits and the Recession The Urban Institute  In New York, 62% of nonprofits have had a decrease in public funding in 2009 with almost a quarter (22%) having seen cuts of over 20%.  73% have experienced reductions in their private funding.  75% lack financial reserves and have no endowments.  30% have no lines of credit.  53% have laid off staff. Source: Krauskopf, Jack, Micheline Blum, Romuald Litwin, Jennifer Hughes and Alexis Browne “The Helpers Need Help: New York City’s Nonprofit Human Service Organizations Persevering in Uncertain Times.” New York: Baruch College.

Nonprofits and the Recession The Urban Institute  In Louisiana, nonprofits experienced an 11.5% decrease in funding in 2009 compared to 2008 and the most significant decrease was from state government.  51% are cutting costs and 37% are deferring spending.  35% are cutting staff and 26.5% are cutting programs.  Organizations expect a 12.5% further decrease in funding from 2010 Source: “Louisiana Nonprofit Sector Fiscal Health Survey (2009).” Louisiana Association of Nonprofit Organizations.

Key Questions The Urban Institute  What has been the nonprofits sector’s experience with government funding agencies?  Have the recession and state budget cuts made working with the government worse, better, or have things remained pretty much the same?  In 2009, did government agencies alter already negotiated nonprofit contracts/grants?  In 2009, were they late in paying nonprofits?  What are the issues around contracts/grants application?

The Sample The Urban Institute Nonprofit human service providers will be surveyed from all 50 states and the District of Columbia (N=9,000). Included are nonprofits in the National Center for Charitable Statistics database and fall into these subcategories of Human Services: Crime & Legal-related; Employment; Food, Agriculture & Nutrition; Housing & Shelter; Public Safety, Disaster Preparedness & Relief; Youth Development; Human Services

Contact Information The Urban Institute Results and final report will be completed by June For more information: Erwin de Leon (202)