September 7, 2010; Source: BusinessReport.com | Some organizations in Baton Rouge, LA that have been receiving stimulus grants under the Homelessness Prevention and Rapid Rehousing Program are ruing the day. Apparently, the money, totaling $3.2 million for Baton Rouge, comes with multiple layers of bureaucracy and its use has been plagued with administrative issues. These have led to a coupling of problems resulting in some nonprofits pulling out of the program even while they and their constituents need the funds. Apparently the grants require much more stringent reporting than is usual with other government grants and the money is reimbursable only after the services have been delivered and that extensive reporting done. The administering agency already had a reputation for late payments so all of this has resulted in payments that are months past due. This, say some of the nonprofits featured in the article, can pose real problems and has led some nonprofits to participate less and even pull out altogether. “We really thought about pulling out,” says Chris Nichols, who runs the Options Foundation, one of the participating agencies. “Nonprofits live hand-to-mouth, and if you’re $20,000 or $30,000 out and the reimbursements aren’t coming, what choice do you have?” Just one more story to prove that the “transaction costs” of grants and contracts must always be taken into consideration in accepting funding.– Ruth McCambridge
About The Author
Ruth is Editor in Chief of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at the Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.