Thank you Stanford Social Innovation Review for publishing our director of public funding Mary Kate Bacalao’s piece on how public funding not only falls short of meeting the needs of nonprofits, but can also create added costs. In the article, Mary Kate suggests ways nonprofits can avoid this cycle of under-investment.
Here is an excerpt:
“Nonprofits should also look for hidden costs in accounts receivable. Who owes the agency what, and how much? Managers must decide what’s material: If a single public funder accounts for more than 10 percent of the agency’s receivables, then staff should work with that funder to reduce the agency’s receivable days. The time spent analyzing receivables should then be added to the time study: How many hours do staff spend tracking submitted invoices and making ends meet until payments come through?”