HB 1226 – How A Bill Doesn’t Become a Law (At Least For Now)

Image of a session in Annapolis
By Neil Bergsman

If you are my age, you remember School House Rock and “I’m just a bill on Capitol Hill.” Bill was sitting on the steps of the capitol building, hoping to one day become a law.

And that’s where the Nonprofit Sustainability Fund is (except in the State House Complex, not on Capitol Hill). That bill will not become law this year. In a typical year in Annapolis, legislators introduce about 2,500 to 3,000 bills for consideration. About 700 to 800 become laws. So for most bills the odds of passage are low.

Big changes usually take more than one session – especially if they involve a lot of money. The Nonprofit Sustainability Fund is a big change with a lot of money attached to it. We think it’s a good investment for the state, and we are going to try again next year.

Listening to Maryland Nonprofits Members

The Nonprofit Sustainability Fund concept grew out of the challenges Maryland Nonprofits was hearing from our members. We listened at member meetings, meetings of our “Think Big Think Tank,” sessions at our conferences, and through our one-on-one work with members.

Nonprofit managers need flexible funds to take care of basic business functions; to plan, to fundraise, and to be entrepreneurial. They are overburdened with administrative duties, excessively complex funding applications, and detailed reporting requirements. Smaller, newer, community-centered, and minority-led nonprofits were particularly strapped for unrestricted funding.

A modest source of flexible funding would be a big help

Learning from other states through our national association, The National Council of Nonprofits, we were in touch with the Minnesota Council of Nonprofits. In 2022, they were promoting a $200 million fund to provide general operating assistance for nonprofits in their state. (The Minnesota proposal was left out of their budget in the waning days of their 2022 session).

Drafting the Bill

We were able to draft a bill that combined many of the details that Minnesota had already worked out with the unique needs we were hearing from our Maryland Nonprofits members.

We proposed a mandatory funding level of $100 million. Our data on the number of small and mid-sized nonprofits registered in Maryland shows that the program demand could well be two or three times that amount. We thought that at least $100 million would be the scale needed to make a difference.

We presented the program as an economic development policy. We wrote into the bill the principles that nonprofits are a major employment sector in Maryland; that they provide services and benefits to communities, families, and individuals in the state that are in the public interest; and that well-resourced nonprofits help make Maryland a good place to live, work, and start or expand a business.

Signing On Support

We wanted to demonstrate broad support for the proposal from the nonprofit community across Maryland. So, we developed a sign-on letter. We announced the sign on campaign at our January “Legislative Preview” event. We got 200 signers that day!

Our Maryland Nonprofits communication team promoted the sign-on campaign through social media, and through all of our member communications and events. Our regional and sub-sector partners helped (like Nonprofit Montgomery and the Community Development Network of Maryland). Ultimately, we got over 800 nonprofit organizations and leaders to sign up in support.

Finding Our Sponsor

We needed a legislator to sponsor the bill. We were extremely honored that Delegate Anne Healey of Prince George’s County stepped up for us. Delegate Healey has served in the General Assembly for 32 years. She is the Chair of the House Rules Committee. Her sponsorship gave our proposal instant credibility.

In Committee

The bill was referred to the Appropriations Committee, and scheduled for a hearing in early March. Delegate Healey, Maryland Nonprofits’ president and CEO, Heather Iliff, and eleven other nonprofit leaders from across the state testified in support of the bill – most of them in person and a few via Zoom video.

The committee members heard about the important work that nonprofits are doing in every legislative district in Maryland, and about the challenges nonprofits face from the lack of flexible funding and from overly burdensome administrative requirements. The testimony on the bill certainly made an impression.

Cloudy Revenue Picture Rains on Our Bill

Sadly, at the same time we were presenting our testimony, the state Board of Revenue Estimates was down the street at the Treasury Building reducing the official revenue estimates. The March estimate provides an updated basis for the legislature to enact a balanced budget in April. The Board reduced their estimates by $477 million compared with the previous estimates.

That reduction effectively closed off the chances for any large, new spending bill. The Appropriations Committee has not taken any action on the bill, and we expect it will not advance this year.

Rays of Sunshine in the Forecast

Still, we should view the 2023 session as a net gain for a Nonprofit Sustainability Fund. Big new policies rarely become reality the first year they are proposed. We introduced the idea of a substantial source of unrestricted funding for small and mid-sized nonprofits. We have educated lawmakers about the need for unrestricted funds for community-based nonprofits. We have assembled a large group of supporters for the idea.

This year we have seen similar proposals in Delaware and Michigan.

Finally, the Moore-Miller Administration Transition Team Report has recently been released. In chapter after chapter, the Transition Team recommends that state agencies partner with and enable nonprofits to help advance agency missions. We think the Nonprofit Sustainability Fund is a natural fit with those recommendations.

So we’ll try again in 2024. We learned (or re-learned) some good lessons. In the coming months, we will engage our Policy Council and other Maryland Nonprofits members to refine and improve the details of the proposal.

We will work with our legislative sponsors and supporters earlier in the year (this past year we were somewhat constrained because 2022 was an election year). We’ll work with the Moore-Miller administration to make sure that our proposal harmonizes with their aspirations and priorities, including service and civic engagement, eliminating child poverty, and fighting climate change.

The idea of a Nonprofit Sustainability Fund is now part of the conversation. Policy-makers in state government are gaining an appreciation for the unique capacity and needs of Maryland’s Nonprofits. With your continued help, we can build on the momentum we generated this year.


Neil Bergsman is the Senior Policy Analyst at Maryland Nonprofits. His work focuses on fiscal affairs, nonprofit research, and economic policy.