Cooperative Purchasing Initiatives

Between Government Agencies and Nonprofits

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 take on the responsibility of serving this special customer group of users. This project establishes Charity Works as the facilitating administrative organization that helps to unite the common trading interests among and between 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 billion of dollars in annual savings for 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.

Two states--New York and Texas--have passed laws that recognize charities and certain nonprofits as eligible users under their respective purchasing systems. 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 is to help make Florida the first state in the United States to recognize its qualified nonprofits as eligible users of 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 renewed confidence in charitable spending.

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