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Not-For-Profits Worry about Funding Changes

Not-for-profits contracted by the state to provide human services are worried about the way lawmakers want to distribute funds for their work.

By Rose Hoban

A low-income family in Camden County receives a bag of groceries from the Food Bank of the Albemarle.

A young adult with autism goes to a therapeutic camp for a week in the summer, while his parents get a break from care.

KIds play in the pool at Camp Royall, a camp for people with autism of all ages run by the Autism Society of North Carolina. Photo: Kelsey Tsipis

KIds play in the pool at Camp Royall, a camp for people with autism of all ages run by the Autism Society of North Carolina. Photo: Kelsey Tsipis

A group of patients with brain injuries meet at a monthly support group.

These are all activities in North Carolina made possible by the work of not-for-profit groups that receive annual state funding.

For decades, several dozen private not-for-profits have administered programs to benefit North Carolina residents, performing health and human-service functions instead of having state employees do the work.

But people involved with those programs say changes in the way the Senate has budgeted for them mean those services could be delayed, or not delivered at all, in the coming fiscal year.

In the past, the state dollars that paid for services delivered by agencies such as food banks, the Autism Society of North Carolina and the Brain Injury Association of North Carolina were recurring funds, part of the state’s annual base budget, said Jennifer Mahan, vice-president for governmental affairs at the Autism Society.

“Then a few years ago, [the funding] became non-recurring funding,” Mahan said. “We were told that it was to ensure that we were accountable.”

She said her organization has been happy to send quarterly reports to the General Assembly and the state Department of Health and Human Services (DHHS).

“We like being accountable. We can show people how the money is being used, that our programs are worthwhile,” Mahan said. “We’re proud of the work we’re doing.

“When the auditor comes in, we have nothing to hide.”

But the budget proposed by the Senate would require not-for-profits to enter into a competitive bidding process handled by the DHHS.

Second Harvest Foodbank of Metrolina is one of the organizations receiving not-for-profit funds from the General Assembly. Photo USDA, courtesy flickr creative commons

Second Harvest Foodbank of Metrolina is one of the organizations receiving not-for-profit funds from the General Assembly. Photo USDA, courtesy flickr creative commons

A government bidding process can take three to six months to be completed, but the beginning of the fiscal year is just a little more than a month away.

Meanwhile, organizations like Mahan’s, which usually bill the state as they deliver services, stands to not get paid as the bidding process proceeds.

“Given we expect the budget to pass at the end of June, and they need three to six months to complete the [request for proposal] process, we’d be halfway into the coming year and the people we serve wouldn’t get services,” Mahan said. “No camp, no residential services, no advocacy, no training – no nothing.”

“The timing would create problems, logistically, for us,” said Alan Briggs, executive director of the North Carolina Association of Feeding America Food Banks. “Seventy percent of what we get is donated food, which drops off during the summer.

“We count on those state dollars during the crunch time, which is August and September, when kids get back to school,” he said. “Those funds allow us to make targeted purchases, like milk and eggs, for communities that can’t afford to get them and that we don’t get donated.”

“It’s going to be a push; I don’t deny that,” said Senate budget writer Sen. Ralph Hise (R-Spruce Pine).

The not-for-profit leaders said that if this is going to be the process, they would prefer it start a year from now, to give state bureaucrats time to get the process in place.

Politicized

“While they do great work, we thought there were better ways to oversee what they were doing,” said Hise, when asked why he and his colleagues proposed changing the way the state allocates the not-for-profit money.

Hise said the only oversight provided by legislative decision-makers is when the not-for-profits come annually to present their work to the Joint Legislative Oversight Committee on Health and Human Services.

The Food Bank of Central and Eastern North Carolina is one of the six food bank organizations funded by not-for-profit funding in the General Assembly's budget.

The Food Bank of Central and Eastern North Carolina is one of the six food bank organizations funded by not-for-profit funding in the General Assembly’s budget. Photo: Walmart Corporate, flickr creative commons

He said some of the not-for-profits were operating on a more local, rather than statewide, basis, and that the perception was that the decision to allocate money to certain organizations “may have been somewhat more political.”

But Briggs said he worried about a lack of transparency once the decisions about whether or not to fund organizations move into the DHHS bureaucracy.

“Frankly, the legislature is more transparent,” he said. “We have public hearings, public calendars; we report to them in public.

“In a bureaucratic setting, there will be none of that. The public won’t know where or how that decision is being made. There’s more accountability here at the legislature.”

Briggs said he and others have been able to press legislators for more funds when times have been bad. His organization saw allocations increase during the economic downturn, when more people needed food assistance.

“We’re the private-sector response to hunger,” Briggs said. “We’re supported by businesses and individuals in communities; the state can leverage a huge infrastructure and network.

“The private sector hasn’t been able to do it alone in the past; neither has government. You maximize what each sector can do. This little bit from the state makes a big difference.”

But many not-for-profits have seen their state grants whittled away in recent years. In last year’s budget, lawmakers added a requirement that organizations match 10 percent of the state allocation.

“We had to raise more money last year to keep the state contract,” said Farmer. She estimated the Brain Injury Association was able to bring in an additional $20,000 last year, but that it was tough in a down economy.

And while budget allocations have remained at the same level as last year, not-for-profit leaders worry about allocations being reduced – or eliminated – once they’re buried in the state bureaucracy and out of public view, at which point there’s no one to petition to keep them intact.

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  1. North Carolina Health News | North Carolina Health NewsJun 11, 2013 at 6:43 am

    […] Changes the process for providing funds to  not-for-profit agencies that provide health and human s…; new competitive bidding process starts in Fiscal Year 2014, allocates $12.5 million/year for 2013-15; details allocations to each agency for this FY […]

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