City Non-Profit Contracting Task Force
Non-profits are imprisoned by weight of paperwork
By John Boudreau
Mercury News
To understand the difficulties non-profits endure when applying for government grants, a process that requires countless hours filling out antiquated paperwork, one need look no further than the Community Association for Rehabilitation in Palo Alto.
On a small desk against a wall sits an IBM Wheelwriter electric typewriter. The mid-sized non-profit, which serves people with disabilities, spends $300 a year to maintain the machine. Why? Because some state government departments still require grant proposals be filled out with a typewriter.
``It's important to retain your humor in all this,'' said executive director Lynda Steele.
Non-profits throughout California are feeling squeezed by a drop in private donations and recession-triggered government cutbacks while the demand for services increases. Now, the agencies are launching a crusade to make the grants process more efficient. They want to reduce and streamline the mounds of paperwork they must shuffle. They want to apply for grants online, or at least be able to download forms from the Internet. And, yes, they'd like to chuck their old typewriters.
In short, those who do good works for a living say they are hogtied by red tape. Agencies hold red-tape meetings to keep staff members abreast of the latest requirements. They hire workers whose primary duties are to wade through piles of redundant documentation.
``The paperwork goes on and on and on,'' observed Patricia Gardner, executive director of the Silicon Valley Council of Nonprofits. ``It is beyond belief.''
It's a touchy topic. In these tough economic times, non-profit executives are hesitant to criticize specific government departments for fear of losing support. The state of California, facing an estimated budget shortfall of at least $15 billion, is experiencing its worst deficit in a decade. ``We can't offend anybody we are going to for funding,'' said one worried non-profit official.
However, some are starting to speak out in hopes of freeing up resources. In March, non-profit executives pleaded with legislators to cut bureaucracy during a San Jose meeting about looming state cutbacks.
``We could serve 25 to 50 percent more clients without the amount of paperwork we have to do,'' said Jeanne Labozetta, president and chief executive of Family & Children Services. Her agency, with a $4.5 million annual budget, is based in Palo Alto and San Jose and provides mental health services to about 15,000 individuals every year.
``The paperwork is supposed to prove you did the work,'' Labozetta added. ``But you can do less paperwork and still prove that.''
Not long ago, the Bill Wilson Center in Santa Clara, which provides everything from housing to counseling, turned away a Santa Clara County grant because the cost of filling out the required forms outweighed the $3,500 it would have received. ``We don't want to say to the government, `We don't need the money,' '' said executive director Sparky Harlan. But, she added, ``The amount of paperwork we would have had to do wipes out the grant.''
The California Council of Community Mental Health Agencies recently conducted a survey of its member agencies and found they spent 30 percent of their time completing required government progress reports and grant applications.
While private foundations also mandate reports, non-profit executives say that paperwork is dramatically less onerous. There are a lot of things government officials are evaluating ``that have nothing to do with the quality of service being delivered,'' Labozetta said.
Government agencies don't dispute the non-profits' assertions. Indeed, there is a growing understanding among government workers, from city hall to Washington, D.C., that the paperwork has gotten out of hand.
Assemblyman Joe Simitian, D-Palo Alto, is sponsoring a bill to simplify reporting requirements for non-profit mental health agencies. His measure is before the Assembly Appropriations Committee.
``It's like a death by 1,000 cuts,'' Simitian said. ``People who should be doing work in the community are spending their time on accounting and reporting requests.''
Simitian's bill, though, could run into trouble because of the costs of implementing it. He estimates it will cost the state about $200,000. ``The bill has good intentions and merit,'' said Nora Romero, a spokeswoman for the Department of Mental Health. ``But it comes at a time when we've got real fiscal problems.''
Santa Clara County officials, meanwhile, hope to implement a more streamlined process for some aspects of its grants process. In particular, the county is creating a CD database to store ``contracting principles'' -- documents detailing a non-profit's workforce, wage and benefit information -- that must be submitted for each grant proposal. If all goes as planned, in the new fiscal year that starts in July non-profits will only have to update this information every 12 months -- instead of repeatedly filling out new forms for each grant proposal, an arduous ordeal. For the following fiscal year, county officials plan to have an online database.
Non-profit executives, while encouraged, say more needs to be done. Some would like procedural shortcuts for non-profits that win government contracts year after year. Agencies would also like to see multi-year contracts so they don't have to re-apply annually. And they'd like to see more standardized forms at all levels.
``There is no pattern or rule,'' said Diane Saign, chief executive of Catholic Charities of Santa Clara County. Her agency, which has an annual budget of $14 million and assists 30,000 low-income individuals and families every year, estimates that the time required to manage contracts ranges from 15 percent to 40 percent of a staff member's work week.
The paperwork, though, is often the only way government officials can ensure that the money is well spent and those in need get the best help. The problem is that what seems to be incremental increases in red tape over the years eventually becomes a ``mountain of paperwork'' at all governmental levels -- city, county, state and federal, Simitian said.
``I am absolutely committed to accountability for every tax dollar,'' the assemblyman said. ``But in this digital age, we should be able to do that with less paperwork.''
Steele would be willing to call it a victory -- no matter how small -- if her typewriter could be retired.
``Then we might be able to put it in a museum,'' she said