Worcester Business Journal

wbjournal.com | January 13, 2025 | Worcester Business Journal 33 Working without a contract? Nonprofits face impossible choices BY RONALD WADDELL Special to WBJ I magine running a business where you're expected to deliver critical services for nearly six months without a contract. is is the reality for many nonprofits providing essential services to our communities. Public funding delays, caused by legislative processes and bureaucratic inefficiencies, force organizations to operate without signed agreements, jeop- ardizing their ability to meet the needs of those they serve. For small nonprofits, this delay is a crisis. Organizations with annual budgets under $2 million oen lack the financial reserves to weather these disruptions. At Legendary Legacies, we were fortunate to secure a line of credit to keep operations running during a delay. However, many com- munity-based organizations do not have access to such resources. is system puts at risk program interruptions, staff uncertainty, and diminished services for vulnerable populations across sectors like health care, education, food security, and workforce development. Some public funding for nonprofits operates on a re- imbursement model. Organizations must spend upfront for salaries, programming, and operational costs and then wait, sometimes for months, for repayment, creating significant cash flow challenges. Smaller nonprofits are hit hardest. Without reserves to cover costs, they face impossible choices: delay services, halt programming, or absorb financial risks jeopardizing their stability. Nonprofits are economic drivers. ey partner with local businesses for supplies, catering, and transportation, supporting jobs and generating steady income for ven- dors and their employees. Nonprofits are businesses with a different tax code, yet they are oen expected to operate under conditions no for-profit business would tolerate. e urgency of our work, whether it's delivering food, housing support, health services, or youth programs, leaves us with little choice but to push forward. To ensure nonprofits can continue providing critical services, we must: 1) streamline funding processes, expedite budget approvals and contract distribution to prevent operational delays; 2) increase funding flexibility, provide upfront payments or faster reimbursements to help smaller organizations maintain cash flow; and 3) treat nonprofits as essential partners, nonprofits deserve the same timeliness and professionalism in contracts and payments as any other business. is is a community issue. Nonprofits form the back- bone of our cities, supporting those in need, contributing to economic growth, and improving quality of life. Suc- cess depends on fixing this broken process so organiza- tions can focus on their missions and communities can thrive. Ronald Waddell is the executive director of Worcester nonprofit Legendary Legacies. Hospitals need more than increased oversight Ronald Waddell I n the closing moments of the 2024 legislative session, Gov. Maura Healey signed a healthcare reform bill, which will increase oversight of hos- pitals, spike penalties for non-compliance, and scrutinize and somewhat limit the role of pri- vate equity firms in the industry. e oversight bill is largely in response to the bankruptcy of Texas-based, for-profit Steward Health Care, which impacted its eight hospitals across Massachusetts, including the closure of Nashoba Valley Medical Center in Ayer and Carney Hospital in Dorchester. Healey's signing of the bill on Jan. 8 came days aer the release on Jan. 3 of State Auditor Diana DiZoglio's audit of the Massachusetts Center for Health Informa- tion and Analysis. While CHIA strongly refutes some of the findings, the audit said the watchdog agency failed to collect financial information and impose necessary penalties in 2021 and 2022 as hospital systems across the state were spiraling into financial distress, particularly Steward's hospitals and Heywood Healthcare's hospitals in Gardner and Athol. Heywood would later replace its CEO, declare bankruptcy in October 2023, halt a planned expan- sion, and eventual exit bankruptcy in a stronger finan- cial position in September 2024, all while keeping its hospitals operating. With Steward, on the other hand, state government officials didn't know enough about the extent of its problems until it was far too late. During the health system's bankruptcy and expedited closure of Nashoba Valley and Carney, Gov. Healey repeatedly said there was nothing she could do to pre- vent the closures or keep the facilities operating under a different owner or agency. While we applaud both the governor and the Mas- sachusetts Legislature on the new oversight bill, they should have noticed the alarm bells ringing well before Steward and Heywood declared bankruptcy. Many hospitals suffer under increased costs and low reim- bursement rates, particularly from government-run insurance programs, while finding themselves in the midst of a workforce crisis. Hospital executives have been sounding the alarm since the COVID pandem- ic, but it took the closure of key hospital facilities for state officials to stand up and do something. Now, the Nashoba Valley area has lost its emergency room and 77 hospital beds, and fire chiefs across the region are saying the emergency response system is on the verge of collapse, since first responders must drive much further to get patients to healthcare facilities. While hospitals are businesses, they also serve the public good. Just like communities need water, roads, police, and fire, they need hospitals. Local, state, and federal officials need to work hand-in-hand with our hospital systems to ensure their financial health and long-term viability. Increased oversight is part of this, but the most important part of this partnership is when healthcare executives ask for help, they should receive help. Just like any other industry, health- care has its mix of good and bad players. Whether operators are nonprofit or for-profit, they all provide a needed public service. Ensuring their success should be everyone's priority. The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. W W

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