New law expands advance payment opportunities for eligible state grants, helping nonprofits deliver services more efficiently
August 12, 2026
DENVER – House Bill 26-1274: State Agency Payments to Grant Recipients officially takes effect today, representing an important milestone in Colorado’s efforts to strengthen partnerships between state government and nonprofit organizations.
The new law expands opportunities for advance payments on eligible state grants, providing all state agencies with greater flexibility to make upfront payments that can reduce cash flow barriers for nonprofits delivering critical services across Colorado.
The legislation builds on recommendations developed through Communities Lead Communities Thrive’s (CLCT) Funding the Frontlines Policy Agenda, which was informed by statewide listening sessions and conversations with nonprofit organizations about improving Colorado’s grantmaking system.
“House Bill 26-1274 recognizes a simple but important reality: nonprofits are essential partners in delivering services that strengthen communities across Colorado,” said Marco Dorado, Managing Director of Communities Lead Communities Thrive. “This law is an important step toward creating a grantmaking system that works better for both state agencies and the organizations they rely on to serve Coloradans.”
Across Colorado, nonprofit organizations provide services ranging from housing and behavioral health to workforce development, food assistance, education, environmental conservation, and support for older adults. Many have historically faced financial challenges associated with reimbursement-based grant structures that require organizations to begin work before receiving state funding.
House Bill 26-1274 builds on legislation from 2021 that exclusively allows the Colorado Department of Public Health and Environment to advance payments, giving all state agencies the ability to align funding best practices with the realities of nonprofit operations while maintaining flexibility and accountability for agencies to administer grants based on program needs.
CLCT applauds the bipartisan leadership, state agency collaboration, and advocacy from nonprofit organizations across Colorado that helped advance the legislation.
As the law takes effect, CLCT looks forward to continuing its partnership with state agencies and nonprofit organizations to support successful implementation and to strengthen Colorado’s nonprofit-government partnerships.
“Passing this legislation is an important milestone, but implementation is where meaningful change happens,” Dorado said. “We’re excited to work alongside state agencies and our coalition partners to help ensure this new law translates into stronger partnerships and better outcomes for Colorado communities.”
House Bill 26-1274 is one part of CLCT’s broader effort to improve how Colorado partners with nonprofits by making state grantmaking more accessible, transparent, and effective.