Nonprofits urge state to reimburse indirect costs on grants to preserve services
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Summary
Nonprofit leaders from UTech and others urged the committee to report H.3428/S.2203 to require state grants and contracts to reimburse indirect costs (rent, utilities, administrative overhead), saying current practice leaves organizations unable to cover necessary operating costs and threatens service continuity for vulnerable populations.
Representatives from UTech testified in support of H.3428 and S.2203, bills that would require state grants and contracts with nonprofit providers to include reimbursement for indirect (overhead) costs such as rent, technology, staff training, data systems and utilities.
What witnesses said: UTech leaders said nonprofits delivering services to justice‑involved youth and other vulnerable populations currently rely heavily on state funding but often cannot draw indirect cost reimbursements from contracts, forcing organizations to cover overhead from program dollars or other fundraising. They told the committee the practice reduces program capacity and threatens charitable organizations’ ability to sustain operations amid rising costs.
Why it matters: Witnesses argued reimbursing full costs would stabilize provider networks, permit better workforce retention, and ensure consistent service delivery to high‑need populations. They requested a favorable report and urged that policy be accompanied by clear administrative guidance to implement full‑cost funding.
Committee response: Members acknowledged nonprofit financial pressures and asked questions about implementation. No recorded committee vote on the bills appears in the hearing transcript.
