Community Foundation President Weighs in on Government Contracts

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November 28, 2010; Source: Star Advertiser | On October 7th of this year, two reports were released to the press regarding the problems nonprofits are experiencing with government contracts. One was from the Urban Institute and one from the National Council of Nonprofits.

Both focused on a variety of problems, including contracts that do not pay full cost of service, late payment on contracts and overly complex regulations and reporting. All of these issues become more problematic of course as service organizations have less in their reserves pool and fewer administrative staff. As far as we know, philanthropy has had little to say on the topic even when, clearly, these public sector issues impact the value of private sector gifts.

But now, Kelvin Taketa, President of the Hawaii Community Foundation, has weighed in with a public statement about recent political changes in Hawaii presenting an opportunity to “forge a new compact between the nonprofit sector and government.”

He points out that nonprofits and government in Hawaii are joined at the hip in that nonprofits provide services that the government deems are needed but do not want to directly provide. Indeed, he says, 60% of the revenue flowing into the sector in Hawaii is from government yet, he adds, the system has become somewhat disconnected. Taketa calls for more inspired coordination and cooperation around social concerns but he also calls for reform, saying “The current system of contracts for services provided by nonprofit agencies often does not cover the full cost of services, nor does it provide for payment on a timely basis. We still hear stories from agencies that must wait months to receive payments for services rendered. Imagine if a contractor working on your house was required to purchase all the materials themselves and wait to get paid for 90-120 days into the job. Start-up payments, minimum-capacity payments and minimizing payment lags will all go a long way toward ensuring that nonprofit agencies can continue to provide the level and quality of services needed.”

We here at NPQ are happy to see a community foundation president extending himself on this critically important issue. We would love to hear any other instances of philanthropic leadership on this agenda.—Ruth McCambridge