The YWCA in Metropolitan Chicago
The YWCA in Metropolitan Chicago - 
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BILL RADKE: States are leaning on nonprofits more and more in this economy. For all kinds of services -- public safety, housing, food assistance. But a report out today says cash-strapped states aren't paying those nonprofits on time.

Marketplace's Nancy Marshall Genzer reports.

NANCY MARSHALL GENZER: The Urban Institute surveyed nonprofits across the country, and found that 41 percent had problems with late payments from government agencies.

Elizabeth Boris conducted the survey. She says nonprofits are in bad shape.

ELIZABETH BORIS: About 40 percent, at the end of 2009, were in the red. They're in pretty weak financial shape going forward.

Boris says some nonprofits are cutting overhead and staff. That's what Christine Bork is doing. She heads the Chicago YWCA. The state of Illinois pays the Y to run programs for victims of sexual violence. But the state is about $400,000 behind in payments. Bork is cutting costs -- trying to keep the programs going.

CHRISTINE BORK: We're probably serving close to 20,000-30,000 people every year. If we stop, what happens to those people?

Other nonprofits are asking the same question. The Urban Institute says 82 percent of them are scaling back their programs. Half have frozen or cut salaries. Some, might fold.

In Washington, I'm Nancy Marshall Genzer for Marketplace.