California nonprofits can breathe a small sigh of financial relief, thanks to a bill that will cut wait times for state funding recently signed by Governor Gavin Newsom.
Assembly Bill 590, authored by Santa Barbara Assemblymember Gregg Hart, builds upon existing state law to allow state agencies to provide up-front payments to nonprofits, prioritizing organizations that support disadvantaged communities.
Nonprofits typically operate under a reimbursement model for expenses and often struggle with delays while awaiting payments from state grants and contracts. Many resort to loans that can rack up interest and chip away at already-limited funding.
AB 590 ensures that nonprofits receive 25 percent of contracted state funds in advance, easing some of the financial burden associated with a slow cash flow.
In Santa Barbara County, which ranks second in nonprofits per capita in the state with 2,029 nonprofits and 279 private foundations as of 2021, the impact is substantial.
It’s a game-changer in the eyes of Alana Walczak, president and CEO of CALM (Child Abuse Listening Mediation), a nonprofit based in Santa Barbara County. She views it as a safeguard for nonprofit organizations statewide, enabling them to provide crucial services for youth, seniors, the environment, arts, culture, and communities in need.
“By providing upfront funding on critical state grants and contracts, nonprofit organizations will have the financial strength to innovate new solutions to address the most complex challenges of our times,” said Walczak.