Thursday, June 19, 2014

Report Shows Increase in Late Payments for NYS Contracts

Comptroller DiNapoli: Increase in Late Contracts with Nonprofits Impacts Those in Need  
In one of our recent newsletters we reported on Urban Institute's National Study on prompt contracting, which ranked New York State within the "Top Ten Worst" in Nonprofit contracting and payments.
Just this week, NYS Comptroller Thomas P. DiNapoli released a report with additional data proving, unfortunately, what we already suspected. New York State is getting worse at paying nonprofits what they are owed for services.

Key Findings: 
·         State agencies were late 87% of the time in approving contracts with nonprofit providers in 2013.This is an increase from 2012, when 78 percent of contracts were approved late.
·         Late approvals prompted interest payments, mandated under the Prompt Contracting Law, which cost the state $185,519. The bulk of the interest was paid by four agencies as seen in the below table: 
 % of NYS Interest Paid
Department of Health
Division of Criminal Justice Services
Office of Children and Family Services
State Education Department

"Every day, New Yorkers rely on not-for-profits to care for their children, improve their health, get housing and much more,"DiNapoli said. "Simply put, the state can't provide all of these basic services without the help of not-for-profit organizations. And when contracts and payments are late, it hurts people and providers, costing the state taxpayer dollars in interest payments

"We applaud Comptroller DiNapoli for tracking and highlighting this problem year after year,"said Doug Sauer, chief executive officer of the New York Council of Nonprofits Inc. "Unfortunately, facts do not create policy, they only inform it. The state of New York, despite best intentions, has taken its eye off the ball."  

Although there have been multiple attempts to fix the system, such as the NYS Grants Gateway, little has made any real substantial changes to improve the system. The Comptroller's report recommends that state agencies:
·         Make prompt contracting a priority to reduce costs to the state and nonprofits
·         Pay prompt contracting interest with the first payment due after the start of a late contract
·         Re-align contract start dates to reflect the time required for the procurement process. 
To download the Full Report click here, for a breakdown by nonprofit, region, and length of days for approval click here.

Want more information?
Please contact our Policy & Program Associate, Amber Vanderwarker.

Download the Prompt Contracting Annual Report 

Click here to download the Full Report, and click here for a breakdown by nonprofit, region, and length of days for approval.  

Updated on Prompt Payment Legislation:

It may be late in the legislative session, but you can still help us pass  A.9599/ S.7340.

It's passed in the Assembly, but has not moved in the Senate.

Send an email or call chairman Michael Ranzenhofer's office today to move the bill.  
NYCON News & Resources

Wednesday, June 11, 2014

National Council of Nonprofits: Nonprofit Knowledge Matters

Nonprofit Knowledge Matters banner
Building a better budget (even if you are allergic to numbers)
During an interview with staff members at the New York Council of Nonprofits, Jenny Chandler, Vice President at the National Council of Nonprofits, learned how to build a better budget:
sneezingIn an effort to get over my allergy to numbers, I spoke with the terrific team of Kelly Mathews (Chief Operating Officer), Michelle Jarvais (Chief Fiscal Officer), and Elizabeth Mathews (Senior Accountant), who shared with me their “6 P’s” approach to nonprofit budgets. See if you can find the “P’s” in their advice!
Jenny: When you work with nonprofits to build a “better” budget, what are your goals?
Michelle: We’re going for a strategic process that helps you plan – not just taking last year’s numbers and updating them. We encourage nonprofits to look a few years ahead and take a multi-year approach because that will result in a better budget.
Kelly: In my work with nonprofits I often see folks not thinking through the long-term effects of short-term decisions. An example would be a simple cost-of-living adjustment. It’s great in the year it’s given – it bumps up salaries and boosts morale. But has the nonprofit projected out the impact of that adjustment for the next few years? It’s going to change the revenue requirements for many years to come. That could be huge.
Michelle: We encourage nonprofits to think of their budget as a living, breathing, guiding document. Your budget is not something that’s approved by the Board of Directors and then locked in stone for the rest of the year. It’s never going to be static. It’s going to change month-to-month. It’s normal for the actual numbers to turn out differently than you projected when you drafted the budget, so a “better budget” is one that changes with the nonprofit’s experience.  
Jenny: It sounds as if you are suggesting that the board-approved budget should be formally amended throughout the year?
Michelle: Perhaps. Many organizations approve at least one budget revision annually. But sometimes adjustments are anticipated and reflected in the budget narrative so that a formal amendment isn’t necessary. If the narrative is thoughtfully drafted it will explain potential variances and alert the board to alternate scenarios.
Jenny: Wait a minute. You just said, “narrative” – You mean budgets aren’t just numbers on an Excel spreadsheet? 
Changing the Culture on Costs, One Community at a Time
Most nonprofits know the problems caused when governments, funders, and the public incorrectly assume that only program costs are well spent and that overhead costs are undesirable. Some nonprofit leaders in Napa Valley, California are doing something about those attitudes, and providing inspiration for the rest of the nonprofit community.
Subscribe here to receive your free copies of Nonprofit Advocacy Matters (every other Monday), where this article was originally published. 
And now for something fun: A summer celebration of charitable nonprofits!
NAM motion graphicSit back in your chair, let yourself relax for two minutes to enjoy this short “Motion Graphic” about how nonprofits are essential to the quality of life in our communities. Brought to you by our member State Association, the Nonprofit Association of the Midlands
Resources to help your nonprofit develop a budget
Financial management resources (National Council of Nonprofits)
NYCON’s Budget and Cash Flow Toolkits: Comprehensive, step-by-step guided & easy to use ● Take a tourInformation & Online Order Form ● Contact your state association of nonprofits to inquire about a discount.
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Worth Reading
Author Interview: A Board Member’s Easier Than You Think Guide To Nonprofit Finances (Andy Robinson and Nancy Wasserman) 
Your Voices
Last month, we asked how often your board reviews financial reports. Here's what you said:
Quick poll results
This month's poll:
What do you think of crowdfunding as a fundraising strategy?
Tell us in this quick, one-question poll and look for the results in next month's Nonprofit Knowledge Matters.
Worth Noting
Free program: Everything you always wanted to know about (June 25, 1 pm Eastern)
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