Rock bottom was September 2008 for Alliance for Children and Families member Family Service Agency of San Mateo County, San Mateo, Calif. Because of the deadlocked state budget, the ag ency had been waiting longer than 60 days for more than $1 million from government service contracts; and payroll was due.
“I went to the bank and signed a line of credit and a mortgage on our building,” recalls Laurie Wishard, president of Family Service. “That afternoon, the check from the state arrived just three hours before we would have had to borrow just to pay our staff.”
Delays in payment for contracted services are nothing new in the nonprofit human services field; neither are reimbursement rates that only partially cover the full cost of providing services.
What is new is the perfect storm created by the recession, state budget deadlocks, longer waits for payments, declining endowments, and poor donor giving. Continue reading.
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