An American survey: government funding trends

Over the Christmas period, the second iteration of the Non-profit – government contracts and grants survey findings was published in the US by Urban Institute and the National Council of Non-Profits. As with the original 2010 report it exposed striking similarities between the US and UK. Here’s a walk through some of the comparisons.

The big picture

US government agencies fund approximately 56,000 organisations through 350,000 grants and contracts. The total value of this funding in 2012 was $137 billion. At roughly £83.7 billion, that’s—unsurprisingly—substantially more than the £14.2 billion the UK sector received (in 2010/11). Relative to the size of each country’s non-profit sector, in both cases this funding makes up roughly a third of the sector’s overall income, giving it a similar level of importance and influence.

Fundee profile

The US government, like the UK government, varies the level of resourcing it provides to different segments of non-profit activity.  In the UK, 83% of government funding goes to 3,357 organisations with an income over £1 million. In the US, the picture isn’t as top-heavy, but still 47% of funding goes to those organisations over $1million. US organisations under $100k don’t receive any government funding—a  point of note.

Another peculiarity of US funding is often the grant-maker’s insistence on non-profits securing match-funding (funds are paid in equal amounts to those from other sources)—about half of surveyed organisations reported such obligations.

Cuts

The US non profit sector has also been pressed with funding cuts as a result of the recession and varied rates of economic recovery (from ‘dismal’ to ‘strong’). 50% of non-profits reported a decline in federal government funding, and 40% reported a drop in local and state funding in 2012.

Problems of process

Cuts have not helped an environment in which only 6% of the surveyed non-profits have experienced improvements in  bidding and contract management processes. 75% reported that the complexity and resources required in applying for funding was a problem, while 53% complained of late payments and 58% of changes to terms of delivery.

The burdens of unnecessary bureaucracy are persistently raised in the US. Central to this is the lack of meaningful and proportionate monitoring: 71% reported unhelpful formatting, and varied frequencies and changes to their reporting requirements, which only add to the load. Set against a funding context in which US government organisations are repeatedly reluctant to fund full costs of work (including overheads and administration) (54%), and the belt tightens further.

So it seems we face similar challenges to our transatlantic friends. And not to sound bleak—there are good signs too, with more charities taking on a greater role in delivering public services, and the UK and US remaining two of the most charitable nations in the world. The relationship between civil society and state is undoubtedly shifting; I wonder what it will look like in three years time?