The state of Colorado relies on nonprofits to deliver essential services that communities rely on every day — from housing and behavioral health to education, food access and economic mobility.
In the philanthropic community, we work closely with nonprofit partners across the state. We fund their work, learn from their experiences and hear directly from leaders navigating the realities of delivering services on the ground. What we consistently hear is not a lack of capacity or commitment, but a misalignment between how services are delivered and how state grant funding is structured.
One of the most persistent challenges nonprofits face when partnering with the state is the reimbursement-based structure of many state grants. Nonprofits operate in real time. They respond to immediate and evolving community needs, and funding structures should reflect that reality. When funding is delayed, the impact is not just administrative — it is felt in communities. Services are postponed. Opportunities are missed. Needs go unmet. A more flexible approach to funding helps close that gap.
That’s why we are coming together with community partners to support House Bill 1274 — a proposal grounded in the lived experiences of nonprofit leaders and a shared commitment to building systems that support, rather than hinder, the work happening in communities every day.
The bill would allow — but not require — state agencies to provide a portion of grant funding in advance to nonprofit recipients. It does not mandate changes across all programs, nor does it require new systems or infrastructure. Instead, it creates more consistency while preserving flexibility.
Under the current model, organizations must cover program costs upfront and then wait weeks or months to be reimbursed by the state. For some organizations, especially those without significant reserves, this creates real financial strain.
Nonprofit leaders across Colorado have described the consequences in clear terms. Hiring is delayed because payroll cannot be guaranteed. Programs are scaled back or postponed despite clear community need. Emergency reserves are depleted. In some cases, organizations take on high-interest loans or leaders assume personal financial risk just to keep services running.
These are organizations delivering work that the state has already approved and committed to fund. Yet the current system often shifts financial risk onto those same partners.
The prevalence of this challenge is so significant that last year, foundation partners created the Colorado Nonprofit Bridge Loan Fund to fill this gap and help organizations manage cash flow while waiting for delayed reimbursements. The need for such a fund speaks volumes.
While bridge loans can help organizations stay afloat in the short term, this is not a long-term solution. Nonprofits should not have to take on debt — even low-interest debt — to deliver services the state has already agreed to fund.
At the same time, we have seen a different, commonsense approach — one that works and gets to the root of this problem. State agencies can currently apply for waivers to provide funding in advance, and the Colorado Department of Public Health & Environment was granted legislative permissive authority to advance up to 25% of a grant amount in 2021.
When nonprofits receive a portion of funding upfront, they can begin work immediately. They can hire staff on time, secure resources and deliver services without interruption. Programs launch when they are supposed to, not weeks later. And organizations can focus on achieving outcomes rather than cash flow.
Providing funding in advance does not reduce accountability. Nonprofits remain subject to all existing reporting, monitoring and auditing requirements. In fact, when organizations have the resources they need at the outset, they are often better positioned to meet those expectations and deliver strong results.
House Bill 1274, which moved out of committee Friday morning and onto the House floor in the closing days of the legislative session, builds on these proven practices. From our perspective, this is a practical and necessary step. It also strengthens the partnership between the state and nonprofit organizations.
Nonprofits are not simply vendors; they are trusted partners with deep community relationships and expertise. They play a critical role in ensuring that public investments translate into real-world impact. When funding structures align with how this work actually happens, those partnerships become more effective and more efficient.
House Bill 1274 reflects what nonprofit leaders across Colorado have been saying for years, and what philanthropy has witnessed firsthand.
It is a measured, flexible policy grounded in real-world experience. It preserves accountability while addressing a clear and solvable barrier. And it helps ensure that public dollars reach communities when they are needed most.
Stronger partnerships lead to stronger outcomes. And stronger outcomes lead to stronger communities. This bill helps move Colorado in that direction.
Ray Barrie-Kivel, of Denver, is director of policy and advocacy for Rose Community Foundation.
Sarah Dutcher, of Denver, is senior philanthropy lead for Caring for Colorado Foundation.
Dace West, of Denver, is the chief impact officer for The Denver Foundation.
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