Common Good Vermont tells commerce committee nonprofits face workforce, funding and safety strains

MONTPELIER, Vt. — Tanya, a policy-and-strategic-initiatives staffer with Common Good Vermont, told the Vermont House Committee on Commerce and Economic Development on Jan. 31 that the state's nonprofit sector is navigating "uncertain times" amid funding changes and rising costs.

Common Good Vermont, a statewide program affiliated with United Way Northwest, told the committee that more than 6,400 nonprofits operate in Vermont and that nonprofits now employ about one in five Vermonters, up from roughly one in seven in prior reports. Tanya said the sector is the state's second-largest industry after state government and pays roughly $3 billion in wages.

Committee members were briefed on three main areas the group identified for legislative attention: workforce supports; grant and contract reform for organizations that deliver state services; and help for nonprofits confronting growing security costs.

"Nonprofits are really navigating uncertain times right now," Tanya said, summarizing the sector's challenges. She described Common Good's three core services: education and training (including cohort certificate programs in nonprofit management and fundraising), advocacy, and connection-building across the sector.

Why it matters: committee members heard that many Vermont nonprofits are small and rely on mixed revenue streams. Common Good's 2024 wages-and-benefits survey, cited during the briefing, found 53% of participating organizations reported receiving federal funding (about one-quarter of their revenue on average) and that 94% of respondents reported rising health-care costs. The group said many organizations report difficulty recruiting and retaining staff because state grant and contract funding can be unpredictable or insufficient to cover competitive wages and benefits.

Tanya described an upcoming bill, still in legislative counsel, that would create a working group to study state grant and contract processes (including reimbursement strings, indirect rates, late payments and funding levels). She asked for the committee's consideration when the bill is released.

Common Good also requested state investment to expand its technical assistance and workforce-development work. Tanya said the organization currently operates as a fee-for-service program and receives no public funding; it has launched a membership program and reported more than 82 members and a newsletter with about 3,400 subscribers.

Committee members questioned speakers about specific topics raised in the briefing. One lawmaker asked whether Public Service Loan Forgiveness has been used as a recruitment or retention tool; Tanya said it is a factor for some individuals and that national partners are focusing on it. Members discussed fiscal sponsorship and consolidation as tools for smaller organizations; Tanya said Common Good promotes fiscal sponsorship and peer networks to reduce duplication and strengthen administrative capacity.

On unemployment insurance, committee members discussed a recent change that removed an exemption for very small nonprofits and made more organizations liable or required them to elect reimbursable-employer status. Tanya said she had worked with the Department of Labor and that about 500 nonprofits had newly registered as liable since the July 1 effective date, though she noted outreach is ongoing to organizations that still need to register or respond.

On safety, Common Good reported survey results showing nonprofits spending from thousands to hundreds of thousands of dollars on security measures and said organizations want collaborative, equity-centered approaches that also prioritize staff and client safety.

The committee did not take formal action during the session. Members asked for additional data from Common Good, including counts of organizations the group serves and further detail on rural-versus-urban distribution in the nonprofit landscape.

The hearing included multiple audience and committee questions; Common Good committed to follow up with requested membership and outreach data as it upgrades its database.

The committee recessed to return at 11:15 a.m. for the next presenter.