Illinois Worst in Nation for Late Payments to Human Service Nonprofits

Oct 07, 2010, 00:00 ET from Donors Forum

In Bottom Five for Insufficient Contract Amounts and Contract Changes

CHICAGO, Oct. 7 /PRNewswire-USNewswire/ -- Illinois is the worst state in the nation for late payments to nonprofit human service providers, according to a new report released today by the Urban Institute. Illinois also ranks in the bottom nationally in two other key indicators of program quality: payments failing to cover the cost of services and unilateral changes by government to contract terms mid-stream.

"Illinois is failing its residents just at the time when they need high-quality services the most. Unfortunately, this is just further evidence that Illinois' system for human services is broken and needs to be fixed," said Laurel O'Sullivan, Vice President, Public Policy, at Chicago-based Donors Forum, a statewide membership organization working to strengthen philanthropy and the nonprofit sector.

According to the new report, Human Service Nonprofits and Government Collaboration, human service nonprofit organizations that are helping families and communities across the nation weather the recession are reporting "serious and widespread" problems with their government contracts and grants. These problems include government payments that do not cover the full cost of services, complex and time-consuming applications and reporting requirements, government changes to the terms of existing agreements, and paying contracts late.

Among the report's findings:

  • Nearly three in four (72 percent) Illinois nonprofit organizations report delays in state reimbursements for services rendered, compared to 41 percent of nonprofit providers nationally.
  • Almost two thirds (65 percent) of Illinois nonprofits report freezing or cutting salaries and more than half (54 percent) have cut jobs due to late payments.
  • Two thirds (59 percent) of Illinois nonprofits say that government reimbursements don't cover costs, earning the state the ranking of third worst in the nation.
  • Illinois was also third worst (72 percent) in governments changing the terms of contracts and grants midstream, which makes it difficult to prepare reliable budgets or service programs.

SOURCE Donors Forum