According to an article on a report published by the Urban Institute, over half of all nonprofits reported lower payments and difficulties with nonprofit/government funding partnerships in a survey conducted in 2013. Some reported that funding simply dried up while the programs were still ongoing.
Considering that government at all levels was funding over 56,000 nonprofits through over 350,000 grants and contracts and was spending over $137 billion dollars doing so, that has an impact.
Governments don't create wealth themselves. They collect wealth by means of the taxes they collect or the fees they charge, and redistribute it.
Without getting too far off into the political weeds, the simple answer is that there is less money available and the government has never been particularly good at working with the people they give it to at any level. Add in the bad publicity they have created through failed programs and scandal-plagued, sloppy accountability and the money supply is bound to get even tighter.
Governments are not going to stop handing out money. Not only is it the way they garner support (votes) for their initiatives, but they aren't supposed to just sit on the money they receive.
Still, with the national debt still rising, unemployment still a problem, and workers contributing less taxes due to working fewer hours, the money supply is going to get tighter.
The savvy nonprofit will have to tighten up their operations and their belts to get by, and consider diversifying their funding plans. Since late and reduced payments were a problem for many organizations, increasing cash on hand and developing alternate income strategies should be in the forefront of coping strategies.
In the aforementioned report it is noted that nonprofits coped with funding shortfalls by reducing staff, freezing wages or drawing down reserves. It may also behoove them to take a look at reducing the scope of their programs as well. If program and financial reporting can be tightened up to reflect greater oversight and increased effectiveness, now would certainly be the time to implement those new controls.
Basic business and strategic operational planning will be more important than ever in at least the next decade. Scaling back programs or accessing more foundation and corporate funding may have to figure more prominently in that planning that it has in the past.
If you haven't already done so, consider a re-assessment of your current business and funding plans. Better to help a little less than go out of business and help no one.
If you need help, either with research or program narratives and reporting, drop me a line at email@example.com