Nevada nonprofits urge faster state payments amid federal funding uncertainty

Editor's note: Este artículo está traducido al español.

Nonprofit organizations in Nevada often go through a payment process in the opposite order of how the rest of the state does. They apply for a grant, complete whatever’s required of them and then get reimbursed for it afterward.

But even after the work is completed, how quickly the state transfers the money varies wildly. Samuel Rudd, president of the United Way of Southern Nevada, said local nonprofits can wait anywhere from 30 days to five months to receive their payment.

That’s why his organization has spent months pushing for legislation placing a 30-day maximum waiting period on payments and allowing some nonprofits to receive up to a 25% advance of a state grant’s value.

“The goal here is that we create a standardized response and expectation,” Rudd said. “It’s, in essence, not a fair practice to ask for any organization, whether it be nonprofit or for-profit organization, to spend funds up front without timely reimbursement.”

While not the original driver of the bill, Assemblymember Howard Watts III, D-Las Vegas — one of the legislation’s main sponsors — said recent federal program cuts make Assembly Bill 442’s passage even more urgent. The bill will be heard this morning during the Assembly’s Government Affairs Committee meeting.

“Nevada’s got one of the smallest and leanest state governments, both by funding and size, of any state in the country,” Watts said. “That makes the nonprofit organizations in our community even more important than they are in other states in helping fill some of those gaps.”

Despite its size, the United Way is one nonprofit feeling the heat of President Donald Trump’s reshaping of the federal government. The organization helps oversee the region’s Emergency Food and Shelter Program (ESFP), which Congress first created over 40 years ago.

In the latest round of funding, the Federal Emergency Management Agency allocated Clark County over $1.2 million to support the program here. Now the program is on an “indefinite hold,” Rudd said, after the Trump administration froze the funds.

It’s a popular and wide-reaching program: During the pandemic, ESFP provided over half a million meals in the county, according to the United Way.

In addition to the United Way, the pause in federal funding will affect other local nonprofits that carry out Emergency Food and Shelter Program initiatives across Clark County.

The suspension “is impacting dollars that would be coming up as early as April, and that’s specifically going to impact over 125,000 Nevadans” statewide, Rudd said. “These nonprofits have been providing those services with the anticipation of being reimbursed for those services for the last couple months.”

In an open letter to Congress posted online by the United Way Bay Area, the organization wrote that the program was “being reviewed within FEMA to ensure it complies” with Trump’s recent executive orders and guidance from the Department of Homeland Security.

“When the additional federal … funding is in question, it compounds the problem” of late state payments, Rudd said, “and that’s what’s really elevated this to be an even better, an even greater solution.”

Working with the Nevada GrantLab, a nonprofit helping other organizations maneuver the grant process, United Way officials said they brought together a coalition of over 100 community leaders to push for passage of the bill.

The group includes Future Smiles, which provides dental care in Clark County schools; Leaders in Training, which supports current and potential first-generation college students, and Under the Magic Pine Tree, a preschool and daycare operating upstate.

“Constant delays in grant reimbursements and the looming threat of funding cuts put our ability to serve families at risk,” Christine McNally, Under the Magic Pine Tree’s owner, wrote in a news release. “This legislation is a lifeline.”

Rudd said United Way was encouraging other nonprofits to evaluate their cash flow and reserves amid the federal funding uncertainty and plan accordingly. The organization is doing the same for itself.

“It’s a really hard balance as a nonprofit because you’re in this work to help people, but you also have to manage that work with sound business principles,” Rudd said.

Along with a series of Democrats joining Watts, the bill has support from Assemblymember Danielle Gallant, R-Las Vegas, and Senate Minority Leader Jeff Stone, R-Henderson.

Rudd said the United Way worked to speak with members of both parties in the Legislature for the bill and that they’ve gotten “a great response.”

Those conversations have led to some changes in the bill, such as ensuring that nonprofits have a valid reason to get an advance payment and that the money is used promptly and for the right purpose.

If signed into law, the bill would require nonprofits to submit a justification for the advance and what systems they have in place to monitor their spending. If the organization doesn’t spend the money within a specified time, it has to return it to the state.

The state would also be liable for interest on the amount due to nonprofits if it doesn’t make the 30-day deadline for payment.

“We would not expect to have businesses … enter into contracts with the state if they knew that they were not going to get paid for months on end, and we shouldn’t expect the same for our nonprofits,” Watts said.