Community Services at Risk: House Appropriations Committee Blocks Bill that Would Improve Government-Nonprofit Partnerships

For decades, Vermont’s government has relied on nonprofits to provide vital services to communities including providing housing for vulnerable youth and families, responding to growing mental health needs, generating revenue for the State through the creative economy, protecting our natural environment, and creating opportunities for advancement.  

Yet, many nonprofits are on the verge of closing their doors or shutting down programs Vermonters rely on.  

H.140, An act relating to requirements for State-funded grants, presents us with an opportunity to improve delivery of services funded by the State of Vermont through nonprofit organizations and the efficiency and effectiveness of government-nonprofit partnerships.  

After being voted out of the House Government Operations and Military Affairs Committee unanimously, H.140 is now at risk of not advancing this session if the House Appropriations Committee refuses to hold a vote by Friday.

For most organizations, State funding has not kept up with rising costs, and many grant agreements require nonprofits to cover costs upfront before being reimbursed. Oftentimes these payments are late, sometimes leaving these non-profits to have to take out loans, paying interest, while awaiting late payments. Furthermore, complicated and restrictive reporting requirements take valuable capacity away from mission-critical work. 

H.140 would: 

  • Create a process and formula for nonprofits to request an indirect rate above the current standard of 10% to cover the true cost of nonprofit services.  
  • Report on how many grant payments to nonprofits are delayed by more than 30 days. 
  • Form a Working Group to consider needed reforms to the State’s grant and contracting system to make it more viable, predictable, and efficient. 

“As nonprofits struggle to meet an increasing demand for services — without an increase in funding — Vermont communities will continue to feel the direct impact of lower service capacities and a shrinking workforce,” United Way of Northwest Vermont CEO Jesse Bridges said. 

Ignoring this problem won’t go away. We must consider needed reforms to the State’s grant and contracting system to ensure taxpayers receive full value for the programs they fund, organizations can recruit and retain skilled employees to deliver vital services, and that community needs are met now and in the future. 


About Common Good Vermont 
Common Good Vermont, a statewide program of the United Way Northwest Vermont, is dedicated to uniting and strengthening Vermont’s nonprofit sector. Common Good Vermont is the go-to resource for Vermont’s nonprofit sector to share resources, gain skills, and build partnerships.Learn more at