SB 784: Flexibility in Nonprofit Contracting During a State of Emergency
Statewide
SB 784
SB 784 sought to remedy the limitations put on nonprofit organizations by providing flexibility during a declared state of emergency, as currently exists for the state’s own departments and workforce. This bill would help nonprofits stabilize more quickly during a crisis, avoid permanent closure, and leave services unaffected or adjusted to best accomplish the primary purpose of a contract. According to CalNonprofits, 86 percent of nonprofits contracted through the state reported needing changes in their contract deliverable requirements. Several counties eventually saw the value of this prioritization and implemented policies to grant nonprofits flexibility. SB 784 would ensure that similar flexibility is embedded into all of California’s nonprofit contracts during a declared emergency. With this new flexibility, nonprofits could alter the terms of their contract as long as they still meet the contract's goals. Finally, the bill would help nonprofits stabilize more quickly during a crisis, avoid permanent closure, and leave services unaffected. The bill was passed by the Assembly in September 2021 but was ordered inactive in the Senate.
Why It Matters
Nonprofits play a pivotal role in our state’s response and recovery. For example, nonprofits provided rapid response and essential services to California’s residents on behalf of the state throughout the entire pandemic. Many of the services nonprofits provided were a direct result of the contracts they held with California. Unfortunately, state contracts’ inflexibility during national emergencies often creates additional challenges for nonprofits to overcome. Traditionally, nonprofits have to grapple with various obstacles during crises, including a heightened demand for services, lack of financial resources, limited capacity, and more. However, during the pandemic, nonprofits also had to navigate additional restrictions imposed by the state’s emergency orders that prevented them from fulfilling their contractual obligations during the pandemic. For example, due to shelter in place requirements, nonprofits providing foster care services were unable to perform home visits to confirm the safety of foster children. California’s emergency orders also affected some nonprofit’s ability to provide services due to forced closures or limits on the number of people who could receive assistance. And yet, as a result of not carrying out their work, the state deemed many nonprofits as not meeting the requirements stipulated in their contracts.
SCG believes that it is essential to support the nonprofit ecosystem and sustainability, especially in times of crises where daily operations and contracting require major shifts. We recognize the tremendous work nonprofits carried throughout the pandemic and support the collective call for flexibility during emergencies to deliver quality services to all people of California. SCG collected over 620 signatures from nonprofit organizations throughout California in support of this bill.