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2013 Urban Institute Study on Nonprofit Contracts and Grants

Jan 2, 2014

In 2013, 56,000 nonprofit organizations nationwide had grants and contracts from federal, state, and local governments. These contracts accounted for nearly $81 billion in revenues for nonprofit organizations. Although nonprofits are vital partners in delivering public services, breakdowns in the contracting process can undermine the nonprofit-government partnership. When governments fail to pay the full costs of delivering public services or fail to make payments on time, nonprofits may experience strains on their finances that could impact their staff and the people they serve. Nonprofits are discouraged from working with governments by practices such as complex application and reporting requirements, and midstream changes to existing contracts.

National Study of Nonprofit-Government Contracts and Grants 2013: State Profiles

The Urban Institute released the nationwide findings of the survey on December 5, 2013. Click here to view the report. On May 15, 2014, the Urban Institute released state profiles for the 2013 report. The survey focused on nonprofits with over $100,000 of expenditures reported on Form 990. The survey included all categories of nonprofits except for hospitals and universities. Click on the following link to read the National Study of Nonprofit-Government Contracts and Grants 2013: State Profiles.

Colorado's profile

Although Colorado is doing “less worse” than many states in terms of problems with nonprofit-government contracts, the report indicates that most nonprofits are experiencing problems in contracting with local, state, and federal governments to serve our communities. (Please note that a lower number in terms of ranking means a higher percentage of problems reported compared to other states).

Here are some of the key findings:

  • 1,232 Colorado nonprofits have grants and contracts worth $1.681 billion from all levels of government.
  • Most Colorado nonprofits surveyed experienced problems with the complexity and time of applying for contracts and grants (66%) as well as reporting requirements (61%).
  • Although Colorado’s had the best ranking (51st) of states reporting that contracts don’t cover the full costs of delivering services, 28% of respondents reported problems.
  • 35% of Colorado nonprofits reported midstream changes to grants and contracts.
  • Many nonprofits reported limits on program (40%) and general administrative/overhead in their contracts (35%).
  • Many Colorado nonprofits experienced declines in revenue from the federal (47%), state (32%), and local governments (35%) in 2012.
  • Regarding actions taken to address declines in revenues, Colorado was below the national average in all categories except for freezing or reducing employee salaries (58% Colorado, 53% National).

In 2010, the Urban Institute issued the results of its first government and contracts survey, documenting contracting problems between human services nonprofits and governments at the local, state, and federal level.

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