Common Ground Project

Charity Works promotes a project called “Common Ground” that involves cooperative purchasing initiatives between government agencies and qualified nonprofit entities. The project is based on the theory that “charities” are instrumentalities of government and, as such, should have statutory access to competitively bid purchasing contracts that are negotiated and managed by federal, state, and/or local government agencies.

Today, a significant number of all nonprofits in the United States receive funding either in whole or part from one or more government agencies. Government officials tend to agree that it makes sense to allow qualified nonprofits access to government purchasing contracts. However, these government officials are generally reluctant to recognize and responsibly serve these special users. This project establishes Charity Works as the facilitating administrative organization that helps to unite the common trading interests among and between donors, government agencies, nonprofits, and vendors.

Common Ground is designed to leverage the purchasing power of IRS approved nonprofits throughout the United States. Based on our research, this project could generate billions of dollars of annual savings on goods and services purchased by the nonprofit sector. Even United States-based international relief organizations could benefit from having non-mandatory access to government-vendor contracts through an intermediary like Charity Works. This project helps to establish pricing parity with those limited number of nonprofits that already have legislative authority to use the United States General Services Administration’s Federal Supply Service Multiple Award Schedules program.

Three states--New York, Texas and Florida--have passed laws to include charities and other nonprofits under their respective purchasing systems. However, the level of recognition varies in each state. For example, in Florida the Department Management Services (“DMS”) redefined the term “eligible users” in 2004 and recanted on its earlier position to treat charities as such.

Although DMS has the legal authority to include charities and other nonprofits as eligible users, its vendors are “encouraged” to extend state term contract pricing to those entities that are recognized under Section 501 (c)(3) of the Internal Revenue Code. Of course, state approved vendors are under no legal obligation to pay user fees to DMS for their contract extension to and the purchases made by these entities. Thus IRS approved charities may negotiate even higher level of discounts from government-approved vendors based on their preferential customer classification and status.

Charity Works’ goal is to engage all levels of government in supporting cooperative purchasing through statutory changes that will effectively reduce the duplicative administrative functions and related expenses that each incur when contracting with vendors to acquire the same types of products and services. Our vision, although challenging, is to help make Florida the first state in the United States that recognizes its qualified nonprofits as eligible users of its competitively bid state, county and city purchasing contracts.
Also, the Common Ground project will establish and promote standards for responsible spending by nonprofits. By creating a base-line price ceiling derived from all levels of government-vendor contracts, nonprofits will be able to compare and gauge the effectiveness of their actual spending. Nonprofit trustees and directors in exercising their fiduciary duties could use these standards to reasonably measure nonprofit spending. This project is designed to increase the trust factor for donors, thereby strengthening the financial viability of the nonprofit sector due to the need for renewed confidence in charitable spending.