New Jersey Government Grants Reform Legislation Reintroduced
Updated July 6, 2026
Legislation championed by the Center that would significantly improve the government grants process in New Jersey has been reintroduced in the State Legislature. A-3492 and A-3495, sponsored by Assemblywoman Yvonne Lopez, and S-3924 and S-2856, sponsored by Senator Angela McKnight, would implement a series of reforms to the processes that nonprofits undergo when they apply for or receive state government funds and would establish an ombudsperson to field inquiries and provide assistance to nonprofits that are experiencing problems.
Although the nonprofit community has a long tradition of working in partnership with government to identify and address critical public needs, nonprofit organizations have long decried the needless complexities associated with applying for and complying with government grants and contracts. Among the biggest problems: grants and contracts that don’t cover the nonprofit’s cost to provide services; excessive complexity in government grant and contract applications; payment delays; and duplicative reporting and monitoring requirements, to name just a few.
A-3492 would address these issues by:
- incentivizing the state to pay nonprofits on time by requiring the government to pay interest when payments to nonprofits are more than 30 days late;
- providing for a regular inflationary adjustment to grants and contracts;
- including at least 15 percent in indirect costs in grants and contracts with nonprofits;
- establishing a central repository for frequently-filed documents to reduce the need to resubmit the same materials for multiple contracts or reports; and
- directing government agencies to develop procedures to reduce redundant monitoring, and standardizing and integrating reporting procedures across government departments and agencies.
Although it cleared the Assembly State and Local Government Committee at the end of the last legislative session, because it did not advance further, it must start the legislative process again. The new version, A-3492, has been referred to the Assembly State and Local Government Committee.
More than 25 nonprofits joined the Center in registering support for the bill in the prior session.
A-3495 would establish an Office of the Nonprofit Ombudsperson to provide information and assistance to, and act as an advocate for, nonprofit organizations interacting with State agencies. It is awaiting consideration by the Assembly Community Development and Women’s Affairs Committee.
S-3924 and S-2856 are both awaiting consideration by the Senate State Government, Wagering, Tourism & Historic Preservation Committee.
The New Jersey Center for Nonprofits strongly supports these bills and continues to work vigorously for their passage. For more information or if you’d like to get involved, contact Linda Czipo at lczipo @ njnonprofits.org (remove spaces in the email address before sending).
Watch your email, our social media feeds, and this website for updates and action alerts.
Why this matters
Nonprofits are vital to a thriving New Jersey, employing 10% of the state’s private workforce, providing essential programs and services, and pumping billions of dollars into the economy. But nonprofits for years have been laboring under a significant capacity gap stemming from the dueling challenges of rising demand for services and lagging funding.
On top of this, the nonprofit community is increasingly under increasing strain from federal actions — executive orders, regulatory changes, funding and policy shifts — that create new compliance burdens, reduce available resources, and undermine nonprofits’ ability to serve effectively. The cumulative effect of these federal measures is to weaken organizations that are already stretched thin, with potentially dire consequences for the people and communities that nonprofits serve.
The nonprofit community has a long tradition of working in partnership with governments and philanthropy to identify and address public needs, as reliance on nonprofits to deliver vital programs and services continues to grow. This relationship depends upon the ability of all partners to exchange information, ideas and recommendations freely. When policies are enacted on a piecemeal basis or without sufficient input from nonprofits, from communities proximate to the issues, and/or from others with in-depth knowledge of these issues, or when grants and service contracts cross inappropriately into micromanagement, the result is inefficiency, ineffective policies, and wasted resources for nonprofits and the state alike.
The current state contracting system in New Jersey is also fraught with problems that have significant social, economic, and equity implications across the nonprofit sector.
- Inherent weaknesses in the process tend to favor larger, more experienced applicants who are in a position to subsidize the inefficiencies and funding inadequacies in the system.
- The process is cumbersome and requires significant resources and “insider knowledge” to successfully manage the contracting process.
- Inertia is a powerful force in the state’s renewals of grants and contracts, making it hard for historically excluded stakeholders to break in. With studies repeatedly showing inequitable in funding streams to nonprofits run by
or serving communities of color, the equity implications of this system are significant. Organizations that are better resourced are in a better position to navigate this
system, while those that are under-resourced will continue to be shut out.
A-3492/S-3924 and A-3495/S-2856 would provide important relief by addressing some of the most pressing problems with the current system, increasing access to government grant opportunities, streamlining processes, and improving efficiencies for nonprofits and government alike. The beneficial impact that it could have for resource-stretched charities, and all who rely on them, would be significant.
The nonprofit community is under increasing strain from federal actions — executive orders, regulatory changes, funding and policy shifts — that create new compliance burdens, reduce available resources, and undermine nonprofits’ ability to serve effectively. with potentially dire consequences for the people and communities that nonprofits serve.
The Center will continue to work to strengthen nonprofit/government partnerships by:
- fostering government policies and practices that reflect an awareness and appreciation of the vital economic and social importance of the nonprofit community;
- encouraging government and philanthropy to more systematically seek and incorporate nonprofit and equity concerns into their policies and procedures;
- promoting specific improvements to streamline regulations and grant and contracting requirements; and
- encouraging more cross-communication between and among government agencies, nonprofits and philanthropy
The Center’s advocacy, communications and education programs are made possible by Center members.
If your organization is a dues-paying member, thank you being part this network to strengthen the charitable community for all people of our state.
If you’re not a member yet, check out the many benefits of membership at njnonprofits.org/membership. Membership is a sound investment in your organization and in New Jersey’s nonprofit community for the people of our state.