Vermont nonprofit sector grows to support 1 in 5 workers amid funding and safety challenges

The Vermont House Commerce Committee convened on January 31, 2025, to discuss the critical role of the nonprofit sector in the state’s economy and workforce. The meeting highlighted the significant contributions of over 6,400 nonprofits, which employ one in five Vermont workers, making it the second largest industry after state government.

The session began with a presentation from a representative of Common Good Vermont, who outlined the organization’s mission to support the nonprofit sector through advocacy, data collection, and peer learning. The representative emphasized the importance of nonprofits in addressing community needs, including food, shelter, healthcare, and education, while also contributing to the local economy through job creation and service provision.

Key topics discussed included the challenges facing nonprofits, particularly in workforce recruitment and retention. The representative noted that rising healthcare costs and housing affordability are major barriers, with 94% of surveyed organizations reporting increased healthcare expenses. Additionally, the need for competitive wages and benefits was underscored, as many nonprofits struggle to attract skilled workers due to limited funding and unpredictable grant cycles.

The meeting also addressed the launch of a new membership program aimed at fostering connections among nonprofits and enhancing their capacity to serve the community. The representative shared insights from a recent statewide summit that brought together over 200 nonprofit leaders to discuss pressing issues, including community safety and funding challenges.

A significant portion of the discussion focused on the need for legislative support to reform grant and contracting processes, which currently hinder nonprofits' ability to operate effectively. The proposed legislation aims to create a working group to explore funding stability and administrative efficiency, ensuring that nonprofits can continue to provide essential services.

The representative concluded by stressing the importance of government-nonprofit partnerships, particularly in light of recent federal policy changes that threaten funding sources. The committee was encouraged to consider state funding for technical assistance and workforce development to bolster the nonprofit sector's capacity.

The meeting wrapped up with a Q&A session, where committee members expressed interest in the Public Service Loan Forgiveness program as a potential recruitment tool for nonprofit careers. The representative acknowledged the program's relevance but noted that it is not widely utilized as a selling point for attracting talent.

Overall, the meeting underscored the vital role of nonprofits in Vermont's economy and the urgent need for support to address workforce challenges and funding instability. The committee's engagement with these issues will be crucial in shaping the future of the nonprofit sector in the state.