2025 Legislative Wrap-up

Now that Governor Newsom has made his decisions on which bills to sign and which to veto, we’ve prepared a summary of our policy work for the 2025 legislative session. Our efforts this year – and the foundation for our work in the year ahead – were shaped by three central goals:

Mitigating Federal Threats

We were heartened whenGovernor Gavin Newsom signed Assembly Bill 1318. Authored by Assemblymember Mia Bonta (D-Oakland) and sponsored by CalNonprofits, the bill shields nonprofits from politically-motivated attacks at the federal level that could block access to state resources (e.g. threats to 501(c)(3) status)This new law, effective immediately, expands the definition of a “qualified nonprofit organization” for state grants and contracts to include either federal or state tax-exempt status.

Strengthening Government Partnership

Two sponsored bills from our CA Nonprofit Equity Initiative – AB 1039 (Hart) on advance payments and AB 880 (Bennett/Limón/Umberg) on indirect cost coverage and prompt payment – have been made two-year bills by the authors. This provides more time to build support, work on implementation strategies, and improve their chances of passage in the future.

We also advocated for AB 944 (Macedo), which supports nonprofits’ efforts to maintain services to their communities during state emergencies with much-needed contract flexibility. This bill did not clear the first house this legislative session.

AB 265 (Caloza) initially had our support but was amended in the Senate Appropriations Committee to eliminate nonprofit eligibility for grants to aid in fire recovery. Consequently, we dropped our support. The governor ultimately vetoed this bill.

CalNonprofits was also proud to sponsor SB 324 (Menjivar). This bill would have strengthened participation of community-based organizations (CBOs) as essential Medi-Cal (CalAIM) providers through adequate funding, reductions of red tape, and improved contracting. Locally-based nonprofits remain the most trusted, experienced providers to best serve Medi-Cal recipients. Unfortunately, this bill was held in suspense and did not move forward this year.

Finally, we opposed AB 339 (Ortega) due to concerns it would negatively impact nonprofit contracting with local agencies by creating additional barriers and delays. We successfully weakened the bill by shortening the notice requirement from 120 to 45 days and removing the meet-and-confer requirement. The governor signed this bill into law.

Building Sector Power

Growing the nonprofit sector’s political strength and advocacy capacity is measured by more than just the size of our membership. The depth of our relationships with legislators and their staff, as well as our role as a trusted, go-to resource on all matters affecting our sector is critical. To that end, CalNonprofits was proud to support a joint hearing of the CA Senate and Assembly Select Committees on the Nonprofit Sector in August, enabling legislators to hear directly from several nonprofit and foundation leaders about the pressing challenges they face. You can review the policy recommendations we made following that hearing.

We also regularly engaged with the Little Hoover Commission, a nonpartisan oversight agency. We focused on reducing unnecessary barriers to contracting with the state, including advance pay, prompt payment, flexibility in emergencies, covering the full cost of services, and reducing complexity in applications and reporting. A final report on this work will be available soon. This year also marked our first time hosting a legislative reception to keep the interests and concerns of the state’s nonprofit sector front-and-center with state representatives.

Thank you for your support during the past year. We will continue to prioritize advocacy that advances the health, stability, and effectiveness of our state’s nonprofits.

– Jeannette Brown, Director of Public Policy, CalNonprofits