by Natalie Jones, Director of Advocacy and Research, Tennessee Nonprofit Network
Tennessee nonprofits, we know you’re the heart and soul of our communities, but it takes more than spirit to move your mission forward. Let’s be real—securing funds to keep your operations running can be a real headache. That’s why we’re excited to share an initiative that we’ve been working on in collaboration with you and your peers. Read our new report entitled State Grants in Tennessee: Making Grants Work for Nonprofits below.
The Struggles We All Know Too Well
Since the middle of 2023, TNN has been engaging with you on the challenges you face in your work. From these conversations, we heard a resounding need to take a closer look at the policies and processes governing state grants – especially reimbursement style contracts. So, we did!
You may remember that TNN launched a statewide survey in April 2024 to get feedback on your experience with the reimbursement process for grants with the state. As you may have guessed, the results weren’t pretty, but they were VERY consistent. The main challenges you shared were:
- Waiting for Reimbursements: ~80% of you said delays in reimbursements are a huge issue. These delays force you to take out loans or rely on uncertain donations just to keep going.
- Drowning in Paperwork: Another 80% highlighted the complexity and inconsistency of reporting requirements as a major headache. It’s hard to focus on your mission when you’re buried in paperwork.
- Not Enough Coverage for Overhead Costs: 78% of you pointed out that restrictions on overhead costs do not cover essential expenses like rent, utilities, or even staff salaries. This makes it hard to keep the lights on, let alone innovate and expand your services.
How We Can Make Things Better
So, we knew what was keeping you up at night, but what’s a nonprofit to do? Thankfully quite a lot. A group of your peers and colleagues met during the month of May to work through actionable solutions to present to our public partners on how to best address these struggles that you (and they) are having to juggle, while also meeting the pressing needs of your community.
We proposed the following:
- State Provide Upfront Funding for Grant Contracts: Providing upfront funding can ease cash flow problems, so you’re not always waiting for reimbursements.
- Consider Alternative Payment/Contract Models: Moving away from reimbursement-only models can ensure you get timely and predictable funding.
- Consistency and Standardization in Grant Administration: Streamlining and standardizing reporting requirements across state agencies can reduce the administrative burden on both nonprofit and state personnel.
- Increase Public Investment in Nonprofit Operations: Allowing more flexible use of grant funds for overhead and administrative costs can strengthen your infrastructure and support innovation.
- Form a Collaborative Working Group: Establishing a working group with representatives from Tennessee nonprofits and state agencies can help develop and implement practical solutions.
Let’s Move Forward Together
We know the challenges can be daunting, but there’s hope for a better system. Let’s work together to advocate for these changes so we can focus more on serving our communities and less on dealing with financial and administrative roadblocks.
For more detailed insights, be sure to check out the full TNN report. Let’s continue the conversation and push for improvements that will benefit all of us. Together, we can make a difference!