Systematic underfunding causes turmoil and instability in human services organizations resulting in financial distress, high level of staff turnover, and sub-optimal outcomes. Many of these problems are accentuated and organizations have been permanently closing their doors. Impacts are most severe on smaller nonprofits, many of which are led by members of the population these organizations aim to serve.
The Campaign for 20 is asking that government contracts with human service organizations in Washington State cover the full cost of the services we are asked to deliver.
We are currently asking that state governments move toward a performance-based, lowest responsible bidder approach, the approach used in contracting with most other vendors.
- Washington State and other governmental entities rely on human service organizations to deliver critical services on their behalf.
- Current contracting processes artificially constrain trade and prevent payment of full cost of services. Government funding currently covers about 70% of direct expenses, and between 30% and 44% of indirect expenses for government contracts.
- Human service providers are unable to make up the difference from other resources, including donors, and the pace of growth in demand from the government has outstripped the nonprofit sector’s ability to fundraise.
- Nearly 1 in 8 human service organizations are technically insolvent.
- 8% to 25% of nonprofits are expected to fail at a time of increasing demand for services.
- Limits at a line-item level cause human service providers to constrain wages at artificially low rates. This reinforces the long tradition of sub-market pay to employees who care for others, and who are primarily women and people of color.
- Agencies have insufficient funding to pay for critical resources, including financial services (such as audits), technology, and human resource staff.
- The current contracting system also drives inefficiency by forcing organizations to choose more expensive or less effective options because of contract restrictions.
- If the sector fails, rebuilding the sector will be time consuming and expensive.
- Human service organizations should bid on services on a performance-based, lowest responsible bidder basis, just as other vendors do.
- This will allow human service providers to provide services at cost, without artificial constraints, and enable Washington State to hold providers accountable for outcomes.
- Our coalition is not asking for more funding. We are simply asking for contracting reform and the associated right-sizing of contracts.
Who We Are Brave Commitments is a collaboration of providers serving children, youth and families in King County. The Campaign for 20% was started by Brave Commitments, but also includes human service organizations serving other vulnerable and marginalized populations across the State.