Governments Delay Grant, Contract Payments

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Here’s another sign of how the recession is affecting youth services: About half of youth-oriented groups that responded to a recent survey reported that state and local governments are delaying their grant and contract payments.

The e-mail survey by the nonprofit Alliance for Children & Families, which has 360 member organizations, went to an estimated 1,000 youth-oriented nonprofits between April 9 and April 28.

Among the 96 groups in 30 states that responded, 44 groups in 19 states wrote that they have received delayed payments from their state or local governments. (It is not clear if organizations did not respond because they have not faced delayed payments.)

“You’ve got states that are passing on their short-term cash problems by paying their nonprofits late,” said Patrick Lester, senior vice president for public policy at the alliance, based in Milwaukee.

Many of the groups that have experienced delayed payments have tapped into lines of credit, and some have cut jobs and reduced services, according to alliance policy analyst Varina Winder.

Lester noted that U.S. Sen. Charles Grassley (R-Iowa) proposed language in the federal economic stimulus bill that would have required states to pay nonprofits on time, but that language was dropped from the final legislation.