Bill would strengthen state-nonprofit partnerships by allowing advance grant payments.
DENVER – House Bill 26-1274: State Agency Payments to Grant Recipients passed out of the House of Representatives with bipartisan support today, marking an important step forward in efforts to modernize how Colorado partners with nonprofit organizations delivering essential public services.
The bill would allow – but not require – state agencies to provide a portion of grant funding in advance to nonprofit organizations awarded state grants. Currently, most state grants operate on a reimbursement basis, requiring nonprofits to front program costs and wait weeks or months for payment.
Supporters say this approach creates financial strain for many organizations, particularly small and community-rooted nonprofits, and can delay services to communities.
“Nonprofit leaders across Colorado have been clear about what it takes to deliver state-funded programs – and too often, that means fronting the money to start a state grant program and navigating long reimbursement delays while trying to keep services going,” said Marco Dorado, Managing Director of Communities Lead Communities Thrive. “We’ve heard stories of postponed hiring, strained budgets, and organizations taking on personal financial risk just to follow through on the work they’ve committed to due to reimbursement delays. This legislation responds to those realities by giving state agencies a more practical way to fund their partners, so programs can start when they’re supposed to, and communities don’t experience gaps in service.”
The amended version of the bill requires agencies to meet additional requirements during the application review process for grantees requesting advance payments, including a robust risk assessment. The amendments also eliminated a proposed 25 percent advance funding cap, instead allowing the “minimum amount of funding required in advance” to begin work related to the grant.
HB 26-1274 builds on authority already granted to the Colorado Department of Public Health and Environment through bipartisan legislation in 2021 and extends that flexibility across state government, while maintaining existing oversight and accountability requirements.
The bill now heads to the Senate for the next step in the legislative process. For more information, visit www.coclct.org.
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