“Who Has the Time?” And Other Questions on Nonprofit Advocacy

By David L. Thompson  David L. Thompson

A nationally prominent nonprofit leader recently said this to an audience of people from public charities and private foundations: “Nonprofits have a duty to advocate on behalf of the people who have no voice, to demand social justice.” Many in the audience nodded in agreement; others waited politely for him to get past his warm-up comments to get to something they hadn’t heard before. One audience member was heard muttering under her breath, “yeah, but who has the time?”

To many of us, the “nonprofits ought to advocate” message, as delivered by the above leader and many others, is a mantra without meaning. Everyone says it – preaches it, actually – but not enough embrace advocacy as core to advancing their missions.

This is an article about nonprofit advocacy: not the “ought-to” variety, but instead, offering one powerful example of two bedrock principles that make the case for “everyday advocacy,” which virtually all of us are already doing.

Principle 1: We in the nonprofit community are driven by our mission, our values, and our impact. Stated simply, mission is our motivation.

Principle 2: People in nonprofits are, by and large, problem solvers, solutions-oriented people, optimists. We haven’t ended hunger and homelessness yet, but we keep at it, and we keep trying new ideas to get to the solutions that work. We know that a live performance of a classical work, or of a brand-new piece, will not only change a life, but also the world; we believe in the transformative power of art. And faith, and education, and community engagement, and more.

Based on those principles, the answer to the question “who has the time” is … each of us. This is partly because we are already advocating for our missions every day. And it’s partly because bad policies are already forcing us to divert scarce time away from our missions.

A nationwide survey of nonprofits with government contracts and grants from the Urban Institute in Washington, DC brings these points home. Responses indicated that 75 percent of nonprofits in New Jersey reported that governments are imposing needlessly complex and time-consuming reporting requirements, ranking the Garden State as the 12th worst in the nation. This means that the time and aggravation that New Jersey nonprofit employees spend on monitoring, reporting, and complying with overly burdensome contract conditions is greater than most many other places in the Unites States.Toward Common Sense Contracting - Cover

In this context, the question is less who has the time to advocate, but how much time could we save by working with governments to prevent duplicative audits, overlapping and inconsistent compliance procedures, retroactive imposition of reporting requirements, incompatible and inconsistent data collection, and a lack of standardization that inject vagaries into an already complex process.

In the same Urban Institute survey, New Jersey ranked as the worst state in the country in terms of governments failing to pay for the full costs of services. In addition, three out of five (61 percent) of New Jersey nonprofit respondents reported that governments impose limits on what they will reimburse for general administrative and overhead costs. Of those, 64 percent were reimbursed at a rate of 10 percent or less for these necessary expenses; fully one-fifth were paid zero for their overhead/administrative costs.

Studies reveal that the usual range of overhead rates for for-profit companies and nonprofit organizations alike is approximately 25 percent to 35 percent. Unrealistic limits on reimbursement of a nonprofit’s legitimate costs undermine its efficiency, effectiveness, and ability to perform vital services on behalf of the governments. Current policies on indirect costs force nonprofit employees to spend time raising funds to fill the gaps. Yet, governments have historically treated nonprofit organizations differently, imposing arbitrary restrictions on reimbursement rates that undercut the ability of their partners to succeed on behalf of taxpayers. Why? One answer is because nonprofits haven’t put enough emphasis on advocating for fairness. Instead, time has been consumed by fundraising to subsidize what governments demand, but don’t pay for.

Thanks to the ongoing advocacy efforts of the Center for Non-Profits and many other organizations across the country, important, groundbreaking progress has been made with the federal Office of Management and Budget’s adoption last December of Uniform Guidance that will require pass-through entities (typically states and local governments receiving federal grants) and all federal agencies to reimburse nonprofits for their indirect costs on these grants. If the nonprofit already has a federally negotiated indirect cost rate, that is what the states and localities are going to have to pay. Nonprofits that have never had such a negotiated rate will be entitled to elect an indirect cost rate equal to ten percent of their modified total direct costs rate. In all cases, nonprofits will have the opportunity to negotiate and get paid a rate based on the federal guidelines. (The Center for Non-Profits and its allies are advocating for reforms to address longstanding contracting problems in New Jersey.)

Here is what the National Council of Nonprofits said about the OMB Uniform Guidance when it came out: “The new guidance from the federal government means that nonprofits should be able to focus more on their missions and should be under less pressure to raise additional funds to essentially subsidize governments.” The benefits are not limited just to nonprofits that provide services on behalf of governments: “In turn, charities with no government contracts or grants could see less competition for scarce philanthropic dollars.”

The OMB Uniform Guidance is a major success story demonstrating the tangible value of nonprofit advocacy. It’s an important first step, and more remains to be done. But it would never have happened at all if nonprofit leaders focused solely on getting the duplicate forms filed and resubmitted, and spent any leftover time planning and engaging in fundraising activities. Many leaders over many conversations told their stories to colleagues, who recognized shared problems and did what nonprofit people do best – came up with solutions. That is the kind of everyday advocacy that is transforming nonprofits and their communities.

David L. Thompson is Vice President of Public Policy for the National Council of Nonprofits in Washington, DC. The Council of Nonprofits’ recent special report, Toward Common Sense Contracting: What Taxpayers Deserve, highlights ready-made solutions to problems New Jersey nonprofits are facing.

National Council of Nonprofits