District of ColumbiaB26-0249Council Period 26 (2025-2026)House

Nonprofit Services Preservation Amendment Act of 2025

Sponsored By: Brianne K. Nadeau (Democratic)

Became Law

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 3 benefits, 0 costs, 0 mixed.

Higher overhead payments for District nonprofits

When funding is available, the District pays covered nonprofits for overhead costs in addition to direct service costs. These payments cannot replace any part of an awarded grant or contract. The basic overhead rate rises from 10% to 15% of direct costs. It adjusts yearly using a Washington-area consumer price index, with increases capped at 3% above the prior year's rate. Nonprofits must disclose their requested rate in their applications. Calculated rates last 3 years, and nonprofits may request renegotiation. A certified public accountant must calculate and certify rates using audited statements from a fiscal year ending within the past 3 years. Nonprofits with annual revenue under $250,000 that lack audited statements can instead use an independent bookkeeping or financial services firm. That firm uses the prior fiscal year's year-end statements. The law applies once its fiscal cost is included in an approved budget and financial plan. Coverage follows estimated solicitation costs: up to $500,000 in fiscal year 2027; above $500,000 through $1 million in 2028; above $1 million through $2 million in 2029; above $2 million through $5 million in 2030; above $5 million through $10 million in 2031; and above $10 million in 2032. Business improvement district tax payments are excluded.

Operating relief grants for community nonprofits

The law authorizes the Mayor to offer operating relief grants to nonprofits providing human services or community activities in the District. Grants can cover overhead and other operating expenses, including by matching money from private sources. Applicants must list District contracts or grants they hold or seek and detail eligible operating costs and salaries. They must explain their financial hardship and planned use of the money. Applications must include audit statements from the immediately preceding fiscal year. They must also include year-end income or activity statements from within the past 3 years showing revenue and spending. Applications may be accepted on a rolling basis. Grants depend on available funding; the law sets no grant amounts.

Stronger payment protections for District nonprofits

District agencies cannot deny, reduce, or end awards solely because of a nonprofit's current negotiated overhead rate request. The rate also cannot be the deciding factor. Agencies may screen applicants by rate only after checking whether they can meet service quality standards. Covered solicitations and awards must explain overhead payments, rate disclosure, award protections, and an agency contact for questions or appeals. Nonprofit subgrantees and subcontractors must receive the same rate the main nonprofit receives directly from the District. These award rules depend on approved budget coverage and follow the fiscal year 2027–2032 phase-in by solicitation size. Business improvement district tax payments are excluded. The Mayor must issue grant rules, and the Office of Contracting and Procurement must issue contract rules. Each set is due within 180 business days after its section's applicability date. Both offices must consult nonprofit groups and publish plain-language explanations. The Mayor must provide annual training, with completion required for staff directly handling nonprofit grants or contracts. Training must begin within 90 business days after the procurement office issues its rules. Agencies must add the required award clauses within 120 business days after the required rules are issued.

Sponsors & Cosponsors

Sponsor

Brianne K. Nadeau
Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 26 • No: 0

House vote • 6/2/2026

Final Reading, CC

Yes: 13 • No: 0

House vote • 5/5/2026

First Reading, CC