Ronald Waddell
Updated: 9 hours ago
Opinion
Viewpoint: Working without a contract? Nonprofits face impossible choices
By Ronald Waddell
Imagine running a business where you’re expected to deliver critical services for nearly six months without a contract. This is the reality for many nonprofits providing essential services to our communities. Public funding delays, caused by legislative processes and bureaucratic inefficiencies, force organizations to operate without signed agreements, jeopardizing their ability to meet the needs of those they serve.
For small nonprofits, this delay is a crisis. Organizations with annual budgets under $2 million often lack the financial reserves to weather these disruptions. At Legendary Legacies, we were fortunate to secure a line of credit to keep operations running during a delay. However, many community-based organizations do not have access to such resources. This system puts at risk program interruptions, staff uncertainty, and diminished services for vulnerable populations across sectors like health care, education, food security, and workforce development.
Some public funding for nonprofits operates on a reimbursement model. Organizations must spend upfront for salaries, programming, and operational costs and then wait, sometimes for months, for repayment, creating significant cash flow challenges. Smaller nonprofits are hit hardest. Without reserves to cover costs, they face impossible choices: delay services, halt programming, or absorb financial risks jeopardizing their stability.
Nonprofits are economic drivers. They partner with local businesses for supplies, catering, and transportation, supporting jobs and generating steady income for vendors and their employees. Nonprofits are businesses with a different tax code, yet they are often expected to operate under conditions no for-profit business would tolerate. The urgency of our work, whether it’s delivering food, housing support, health services, or youth programs, leaves us with little choice but to push forward.
To ensure nonprofits can continue providing critical services, we must: 1) streamline funding processes, expedite budget approvals and contract distribution to prevent operational delays; 2) increase funding flexibility, provide upfront payments or faster reimbursements to help smaller organizations maintain cash flow; and 3) treat nonprofits as essential partners, nonprofits deserve the same timeliness and professionalism in contracts and payments as any other business.
This is a community issue. Nonprofits form the backbone of our cities, supporting those in need, contributing to economic growth, and improving quality of life. Success depends on fixing this broken process so organizations can focus on their missions and communities can thrive.
Ronald Waddell is the executive director of Worcester nonprofit Legendary Legacies.
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