A Key Question About Government-Funded Nonprofits

Nonprofits in many cases provide us with feel-good stories. They do laudable work, often offering a helping hand to those whom society has left behind in some ways. Work many of us really don’t want to do, in other words.

But who pays for it?

Sure, donors to some extent. But much of the funding comes from government, which has neither the time nor the expertise to do the work itself. So, in a sense, we all pay for it.

How much are you willing to pay?

That’s the issue in Massachusetts, where Boston Globe columnist Yvonne Abraham wrote recently about Crossroads Clubhouse, which gets mentally ill people out of the house and into counseling and jobs. But under the Bay State’s nonexistent funding policies, Crossroads receives the exact same state funding as it did when it first signed a contract with Massachusetts — 16 years ago.

Think expenses have gone up since then?

Under the current system — which is no system at all — funding stays at whatever it was when a provider first signed its contract with the state. A 2005 contract pays more than one signed in 1995, even if they’re for exactly the same services. Individual providers can beg for increases from the state, but that’s a crapshoot. Nobody regularly reviews all of the contracts to bring them within spitting distance of inflation.

A bill in the Massachusetts legislature "would require the state to set uniform rates for all of its contractors, based on what it really costs to do the job, and to review those rates every couple of years," Abraham wrote, but some are worried — understandably — about what that would do to the state budget.

Which gets us back to the original question: How much are you, as a taxpayer, willing to spend to support nonprofits that do work everyone agrees is beneficial? | 501(c)