Many nonprofits contract with government agencies to provide services, but they are struggling to fulfill this role. According to the National Study of Nonprofit-Government Contracts and Grants 2013 (just released by The Urban Institute), revenue from federal agencies declined in 2012 for almost half of those organizations. And, one in five of those nonprofits reported an uptick in problems with government contracting compared to prior years. Based on state-by-state profiles and rankings, Pennsylvania was fourth out of 50 states in the percentage of nonprofits reporting late government payments - increasing reliance on grants and private contributions as well as use of reserve funds or credit lines.
National Council of Nonprofits recently released another new report entitled Toward Common Sense Contracting: What Taxpayers Deserve. It documents similar problems and calls for changes that will help nonprofits deliver value for taxpayers' dollars. In its proposed solutions, NCN points out the implications of the new OMB Uniform Guidance, which goes into effect in late 2014 and will affect how local, state, and federal governments pay nonprofits for indirect costs.