This morning, Marian Conway, one of our volunteer newswire writers, passed along this advice from the CEO of the Child Center of New York, Traci Donnelly: Think carefully before you contract! Her organization has 111 contracts totaling about $34 million a year, but when it comes to government contracts, too much can be dangerous. These grants generally do not cover full costs and that can leave your organization severely unbalanced and frail.
In particular, she says, a budget built primarily on contracts at less than full cost reimbursement makes it almost impossible to innovate. And, as the organization grows, its appetite for other money even just for the basics increases, requiring more fundraising and leaving no money set aside for research and development. This is, of course, the brilliant business model that brought the $250 million-a-year New York social services mega-agency FEGS (Federation Employment & Guidance Service) to its knees.
Anyway, this newswire has prompted a number of comments including the following:
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When I took my current position I found out that we had a government contract that was costing us about $2,000/month, not figuring in the overhead costs. We’re a small org, so that was a huge deal! Three months before the contract ended I told the staff to let the beneficiaries of the program know that it was going to end so they needed to start planning for it. Everyone ended up addressing their issues in various ways so we did not have to figure out how to help them when it came time for the program to end. #worstgrantever
So we thought we’d ask you to join in on this hashtag. Please tweet at us and let us know your #worstgrantever. Let’s talk about it! And feel free to comment below!