Advocacy Testimony: The Non-Profit Reimbursement Fairness Act of 2019

The blog text below is from testimony presented by SOME’s Warren Corprew in front of the Committee on Facilities and Procurement regarding the Non-Profit Reimbursement Fairness Act of 2019.


“Good morning, Chairperson Robert White and members of the Committee.

My name is Warren Corprew, and I am the Director of Business Planning and Analysis at SOME, Inc. (also known as So Others Might Eat).

Thank you for the opportunity to testify on the Non-Profit Reimbursement Fairness Act of 2019. Thank you, Chairperson White and Council Members Gray and Cheh, for co-sponsoring this legislation. We have actively supported this bill for over a year, and we do so today. We do so on behalf of ourselves and our sister organizations.

SOME is an interfaith and non-profit organization. For 49 years, we have provided comprehensive services to District residents who are homeless or at risk of homelessness. Our services include day programs; food programs; medical, dental, and behavioral healthcare; housing; and workforce development.

SOME serves more than 10,000 unduplicated District residents every year. By treating each person with respect and dignity, we help each person move toward stability and self-sufficiency. We believe that our services cumulatively improve health. They enable extremely low-income residents to remain housed, get and keep jobs, and pay taxes. As a result, our services reduce the demand for costly emergency services, while improving community well-being.

SOME is here today to advocate for a more holistic approach to funding for nonprofits.  We encourage an approach that does not create a false choice in funding between direct program dollars and indirect expense or Core Mission Support, but that recognizes that both kinds of funding are required if the District is to have sustainable nonprofits.

In the view of SOME, the funding DC provides is not a charitable donation but is an investment in the welfare of the District and its citizens. The best way to make the most of your direct program investment is to ensure that proper infrastructure is in place to make the most efficient and effective use of those dollars. As nonprofit financial leaders, we want everyone to understand that we hold BOTH a deep passion for our respective missions and a sobering pragmatism about how financial management works.

If we want nonprofits to have solid accounting systems, strong boards, and the ability to evaluate and to share the impact of their good work, then we need the District to understand that we need our True (Full) Program costs funded.

While there are many factors to consider, it comes down to three components:

  1. First, and most important, is to deliver great programs that are effective and relevant for whoever or wherever the nonprofit works.
  2. Second, be attentive to maintaining the business model that works for the nonprofit. Business models are about much more than income:
    • What does it cost to deliver great programs?
    • What is the infrastructure required to support development, program, organizational health, accountability, and outcome transparency?
    • What resources are needed for maintenance (such as repairs, lights, and phones in the facilities where people receive services), for technology and working capital?
  3. Third, for nonprofits to be sustainable into the future, they must be ready and able to adapt to changing times in their community, in the economy, or in the policy environment.  This legislation could make our organizations and communities more robust and resilient.

Let me be more specific.

One of the factors that make it hard for a nonprofit to plan its programming effectively is the reality that there are inconsistent rates, even in contracts with the same District agency, and certainly between one District agency and another.

If you don’t get the indirect-cost rate you need, you face difficult choices: you may have to cut services, cut the number of clients, not provide that extra bed in a mental-health facility, reduce supplies, make changes in intake personnel, or not use the latest record-keeping tools.

It’s the community that bears those consequences. If you don’t receive even the modest rate you have requested, you might have to decline, for example, to accept a District rate for social services, because you don’t know if you can cover the costs.

This bill would help address these problems.

Thank you for the opportunity to testify. I am happy to do my best to answer any questions.”