Nonprofits Experience Delays in Public Funding

A new survey finds that some states are delaying payments to nonprofit grantees and contractors as they struggle with their own budgetary problems, the Foundation Center reported May 3.

Groups in 19 states reported that their payments from state or local governments have been delayed, while those in 11 other states said they had experienced no such problems. About 100 nonprofits were surveyed by the Alliance for Children and Families and United Neighborhood Centers of America.

In some instances, delays in payment have led to job cuts, service reductions, and the need to tap into reserve funds or lines of credit — a particular problem since creditors have tightened access to funding or raised the cost of borrowing. In states like Michigan, the delays have combined with declining donations and greater demand for services to create a crisis for local nonprofits.