In communities across Colorado, nonprofits are on the frontlines addressing urgent needs in food security, health care, housing and more. These organizations provide vital services and often step in where government capacity falls short.
Despite the important role of nonprofits on behalf of the state, many struggle to access state funding meant to support their work, particularly organizations led by and serving historically marginalized communities.
That is why passing this legislative session is critical. This bill takes the necessary steps to make state grants more accessible to nonprofits by reforming the state’s reimbursement-based grant funding model. The bill would require at least a 35% upfront retainer for nonprofits awarded state grants, compared to the 100% reimbursement rule state agencies currently follow.
Communities Lead Communities Thrive, a coalition of small nonprofits across the state committed to removing barriers to state grant funding, supports the changes this legislation would make to the state grant-making process.
Our coalition led the charge to pass and help implement the Nonprofit Infrastructure Grant Program established in 2022 through , which distributed grants of up to $100,000 to organizations upfront. This has empowered organizations across the state to focus on achieving their mission and recovering from the pandemic rather than worrying about cash-flow challenges.
For too long, nonprofits awarded state grants have had to front costs for services provided on behalf of the state, creating cash-flow burdens that exclude many from applying for state grants altogether.
The challenges nonprofits face in securing state funding are well-documented. A recent by the Harvard Kennedy School Government Performance Lab, in collaboration with the Colorado Health Foundation, highlights how unclear processes, excessive administrative burdens and a decentralized system create significant barriers for small and new providers to access state grants. These inefficiencies create delays in reimbursement payments causing additional cash-flow strain on nonprofits that already operate with limited resources.
For nonprofits reliant on state funding, these challenges translate into real-world consequences. Delays in reimbursement hinder their ability to maintain essential services, forcing them to divert limited resources to cover upfront costs.
The state’s exacerbates inequities, favoring larger, well-resourced organizations while sidelining smaller, community-based providers that are deeply connected to the populations they serve. This system disproportionately impacts organizations working in communities of color and rural areas, where access to capital is already constrained.
The result? The organizations best positioned to serve their communities are often excluded from the funding process.
that 48% of Colorado nonprofits receive state grants. Streamlining the state’s grant funding processes through upfront disbursements would allow these nonprofits to focus on their missions rather than financial survival.
Grant flexibility is crucial to sustaining services that support families and young people. Delays in funding weaken the impact of these programs and reduce overall efficiency, limiting the return on investment for taxpayers and, in some cases, leaving people without essential services.
House Bill 1101 seeks to change the status quo by ensuring that grant dollars are distributed equitably, allowing nonprofits to receive funds upfront rather than waiting for reimbursement.
This shift is not just a bureaucratic adjustment, but a lifeline for organizations that lack the financial reserves to cover months of expenses while awaiting state reimbursement. By leveling the playing field, the bill would help ensure that resources reach the communities most in need.
Colorado prides itself on being a leader in innovation and equity. But, without immediate reforms to how state grants are distributed to nonprofit organizations, we risk perpetuating systemic barriers that keep vital funding out of reach for the very organizations supporting communities across the state.
Passing House Bill 1101 is a necessary step toward ensuring that all nonprofits, regardless of size or financial reserves, have an equal opportunity to access state resources.
The time to act is now. We urge our lawmakers to prioritize the passage of House Bill 1101 without delay, ensuring that state funding is truly accessible to the nonprofits that sustain and uplift Colorado’s communities.
Marco Dorado of Northglenn is the managing director of , a coalition of nonprofits founded in 2021 to advocate for equitable resource distribution for nonprofits serving historically excluded communities across Colorado.
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