Strategies for Aligning Capacity, Expectations, and Needs

Robbinsville, NJ. Last year at the 2017 Mercer County Human Services Advisory Council (HSAC) Legislative Breakfast, we identified numerous bureaucratic, funding, and capacity obstacles nonprofits face in the delivery of health and human services. As a result, the participating legislators asked the Mercer County HSAC to come back to them with more actionable recommendations around funding and capacity they could act on. We subsequently formed a subcommittee focused on Nonprofit Contracts and Funding Reform. In our deliberations, the underlying theme that we kept coming across was that the extended underfunding of nonprofits and government combined with externally imposed and misaligned cost-management and accountability practices have threatened the long-term sustainability of nonprofits due to funding and capacity.

In fact, the prevalent theme that links all of the recommendations together is the immediate need to invest in building nonprofit and government funding and capacity. All participants recognized the importance of maximizing efficiencies, but they also expressed concern that the human service delivery infrastructure is increasingly compromised by underinvestment. Under-resourced public agencies and nonprofits have restructured and repurposed antiquated technology systems, managed growing workloads to the point of overextending staff, and implemented internal draconian cost-cutting measures for over 30 years. The “doing more with less” approach has been maxed out and is resulting in systemic, but preventable, inefficiencies that are threatening the quality of care.

Public agencies are then offloading tasks and transferring costs onto nonprofits with the hopes that the philanthropic community will make up for the shortfalls. However, giving trends point to the fact that funders are not funding long-term direct human and health services or nonprofit administrative costs. Unfortunately, most nonprofits cannot adequately absorb increased responsibilities without adequate funding and capacity to cover all costs of operation and program implementation in the long run.

In a time period of increased service demands and cutbacks in federal funding, policy brokers at all levels must reconfigure existing approaches to funding human services. An existing or newly created legislatively mandated Implementation Commission that partners with nonprofits and government agencies at all levels of government is needed to develop a 5-Year Public Management Plan for Health and Human Services. Recommendations should include long-term public funding and legislative and bureaucratic remedies. However, this commission should not be there to only re-examine all of those issues that have been widely examined for over 20 years and come up with recommendations in a 3-5-year period. It should be focused on implementing the funding and capacity solutions that everyone knows are needed. These include, but are not limited to:

• Permanent and predictable sources of nonprofit funding;

• Uniform budgeting standards;

• Aligning capacity, expectations, and tasks with funding;

• Overcoming legal, bureaucratic, and contracting obstacles;

• Diminishing duplication; and

• Upgrading and synchronizing technology systems.

Nonprofits and public agencies are at a breaking point now due to funding and capacity challenges, but things may worsen if policy brokers do not mobilize to develop comprehensive long-term strategies to support health and human services. The Congressional Budget Office (CBO) has estimated that the tax cuts from the Tax Reform and Jobs Act of 2017 will add an estimated $1.4467 trillion to the national debt in the next decade. Governments at the local, state, and federal levels will inevitably have to strategize on how to balance their budgets with less revenue. Unsurprisingly, when governments have less income, this means that they have to cut spending to balance their budgets. This usually translates into cutting funding for critical services provided by nonprofit organizations.

2018 HSAC Legislative Breakfast

During the 2018 Mercer County HSAC Legislative Breakfast held on March 27, 2018, HSAC invited the attending legislators to partner with nonprofits to take preemptive steps that will help to prevent or mitigate the impact of these cuts on funding and capacity.

The full report can be found below:

HSAC 2018 Legislative Breakfast Whitepaper Final

Thank You For the Opportunity to Serve!

The Capacity Building and Policy Experts, LLC team was absolutely thrilled to work with Mercer County HSAC on authoring this report!

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