Common Good Vermont urges state support as nonprofits face federal funding cuts

Martin Holland, director of Common Good Vermont, told the Economic Development, Housing & General Affairs committee on April 22 that the statewide nonprofit sector is large, mostly small, and under growing financial pressure from federal funding changes and rising costs.

Common Good Vermont is a statewide program of the United Way of Northwest Vermont, Holland said; the program provides training, board development and sector convenings aimed at helping nonprofit organizations manage finances, reporting and staffing.

Why it matters: Nonprofits provide services across housing, food security, childcare, health and education; Holland said many are small, operate on thin margins and perform work funded by state and federal contracts. Losses or interruptions in grant funding, he said, can directly affect service continuity for Vermont residents.

Holland outlined the sector’s scale and composition. He said there are about 6,400 registered nonprofits in Vermont, with roughly 60 percent reporting annual budgets of $50,000 or less. He said earned revenue represents about half of nonprofit receipts and government grants and contracts account for roughly 31 percent of revenue for many organizations. He also said a substantial share of nonprofit payrolls contributes to the state economy.

Holland listed Common Good Vermont’s core activities as (1) training and education for nonprofit management (including fundraising and compensation policy), (2) board and leadership development, and (3) convenings to coordinate cross-sector work such as community safety and philanthropic response.

On policy priorities, Holland said Common Good Vermont sought state general-fund support this session to help small nonprofits meet contract requirements, audits and reporting obligations when they deliver state-funded services. He said that effort was not successful during the current session and that the group would pursue additional approaches next year.

Holland also raised contract and grant administration as a priority. He said many state grants are paid on a reimbursement basis rather than as advances, and that timing of reimbursements can strain the cash flow of small providers. He identified reform of grant and contract practices as a priority and noted related language is in bill H.233 now before the House Government Operations committee.

Holland described other sector-level concerns: workforce (including health insurance cost pressures), cost-of-delivery increases, and the need for shared services (for example, pooled finance or HR functions) to reduce overhead for small organizations. He said Common Good Vermont plans workshops on mergers, fiscal sponsorship and shared-services models to help organizations consider consolidation or partnership where appropriate.

"We do education and training for our nonprofits on issues such as setting fair compensation policies," Holland said, describing the program’s day-to-day support work.

Committee members thanked Holland and then pivoted into a related conversation about workforce development; Holland’s presentation concluded without a committee vote or formal request beyond the policy discussion.

Two clarifying points Holland provided: Common Good Vermont is a statewide program of the United Way of Northwest Vermont, and Common Good Vermont convened the Vermont Nonprofit Summit and other cross-sector meetings to share capacity-building resources.

The committee did not take formal action on the presentation; the record shows the briefing closed and members moved on to other agenda items.