I am struck by this paragraph of yours Nancy:
“Three nonprofits in my sector went out of business in the past two years and left a void with no services in parts of the state. They had no cushion to weather the ups and downs of Covid or the cash flow problems of late government payments, We can afford to do business in New York City where the government routinely takes a year to register a contract and then expects us to bill for 12 months of service that we already provided. Charities that need to take out bank loans with interest to meet their cash flow obligations will never catch up and default and/or bankruptcy always loom.”
and think that it is worthwhile to highlight the degree to which funders can affect what is necessary for good financial management. In the case of New York agencies contracted with the state, the contracting problems are long term, legend, terrifically resistant to reform and sometimes fatal to community based organizations.
It makes me think that there should be a movement to force the state to capitalize nonprofits sufficiently to allow for the state’s incompetence if contract problems are at all chronic.
That said, the advocacy in New York on this issue has been amazing. The system is just stubbornly set on disrespect of the sector and that needs to change in more than word and intention.