Original article published on Linkedin by Dustin Lanier, CPPO and if you prefer to listen, access the podcast here.
Recently, we started a conversation about the significant similarities between government and nonprofit organizations, particularly in the realm of procurement and contract management, where we have the honor of serving both sectors.
This week we had a kickoff article on how both sectors share a mission-driven focus, face budget constraints, and transparency and accountability focus.
I also posted an infographic yesterday that up to 32 percent of the funding for the almost 1.5 million non-profits in the US comes from government grants and government contracts.
So here's my take on where the common ground exists:
Shared Mission and Goals
Both government and nonprofit organizations are driven by a fundamental commitment to serve the public good. This mission-driven approach shapes their objectives, operational strategies, and the procurement of the goods and services necessary to achieve those priorities.
In a complementary way, government provides broad public services and infrastructure, and nonprofits tend to focus on very specific community needs, and targeted execution on grant opportunities through subawards and recipient oversight.
Government Grants are Often Empowered through a Network of Non-Profits
The National Council of Nonprofits highlights that “Governments and nonprofits are natural partners, serving the same constituents in the same communities.” This partnership is essential in extending the reach and impact of government programs through this diverse network of non-profits that are already embedded in the community.
Of course, with government funding comes specific regulations on the management and use of these funds. The rules and processes that are core for government operations, and day-to-day activities of contract managers at federal and state levels, naturally flow to the operations of non-profits that receive these funds - where they may not have a similar level of infrastructure but they will need to operate in a consistent style.
So non-profits must have a strong understanding of how to navigate these regulations - effectively and efficiently - in order to meet the goals of the programs that were the sources of these funds.
Upholding the Public Trust
Trust is a critical asset - maintaining that trust drives transparency and accountability. These are critical components of procurement processes in both sectors. Governments and nonprofits are accountable to their stakeholders and must ensure that resources are used effectively, ethically, and in alignment with their missions. This includes conducting procurement processes with clear documentation, justifying purchasing decisions, following market research requirements, and adhering to ethical standards such as avoiding conflicts of interest and ensuring fair treatment of vendors.
Vendor Selection and Contract Management
The process of selecting vendors or contractors involves careful consideration of factors such as price, quality, risk, and compliance. Both sectors require fair vendor selection and contract management processes to meet their operational needs and ensure the best value for their stakeholders. And if the nature of the grant program involves distribution to sub-awardees, this creates an additional need to understand processes associated with sub-awards, and ensuring that the federal expectations flow up and down, which adds an additional level of complexity.
Impact Measurement and Continuous Improvement
Measuring impact and outcomes is a shared responsibility of both governments and nonprofits. Both sectors use metrics and evaluation methods to assess the effectiveness of their programs. For non-profits their grants often have specific impact requirements related to outcomes and outputs that is a component of the reporting process back to federal partners. So this focus on measurement and continuous improvement is crucial for achieving the long-term goals of both entities.
We have seen the connection of these two sectors firsthand, and are excited at the opportunity to help build bridges for the success of both sides!
