Georgia prides itself on fiscal discipline. We maintain one of the strongest reserve funds in the nation — more than $10 billion set aside to protect against disruption and uncertainty.
Yet today, the very organizations that deliver critical public services on behalf of the state are being asked to shoulder financial risk they did not create and cannot sustain.
Nonprofit organizations are a backbone provider of Georgia’s housing, health, human services and workforce systems. They administer a number of services under contracts from the state, including housing vouchers, stabilization services for families at risk of homelessness, behavioral health and disability services, senior support and child safety and welfare services. In many communities — especially rural and high-need areas — they are the only providers available.
To be clear: The state does not operate philanthropic programs. Nonprofits provide those services for the state on a contract basis with designated public funding — no different from any other vendor. In many cases, the state has entered into binding agreements with the federal government to deliver these services and has delegated that work to nonprofit providers through subcontracts. When nonprofits deliver services under these agreements, they are acting as the state’s designated service providers.
Failing to act has real downstream costs
Credit: Georgia Center for Nonprofits
Credit: Georgia Center for Nonprofits
In 2025, federal shutdowns and funding disruptions delayed the flow of federal dollars that pass through the state and are then paid to nonprofits. Rather than advancing payment for services already delivered, the state has delayed reimbursement — forcing nonprofit providers to cover payroll, rent and program costs using private reserves, lines of credit or emergency fundraising.
The result has been immediate and damaging.
Nonprofits across Georgia are laying off staff, freezing hiring and draining hard-won reserves simply to keep state-funded services operating. Highly trained housing specialists, clinicians, case managers and family support workers — many of whom could earn more elsewhere — are leaving the sector altogether. (Echoed in provider testimony during Georgia House budget hearings, Dec. 18, 2025, and Jan. 12, 2026, where reimbursement lag, workforce strain and provider instability were discussed on record.)
To put it simply: This is nothing short of a system failure.
When the state contracts for services and those services are delivered, delayed payment effectively forces nonprofits to act as short-term lenders to the state — without interest, without protection and without the balance sheets to absorb prolonged delays. That is neither fair nor fiscally responsible.
It is also unnecessary.
Georgia’s reserve fund exists precisely for moments like this: to absorb temporary disruptions and ensure continuity of essential services. Using reserves or internal advances to stabilize nonprofit contractors during federal funding delays is prudent governance, plain and simple.
Failing to act has real downstream costs. For example, disruptions in family and behavioral health services place additional pressure on schools, courts and law enforcement. Housing instability increases emergency shelter use, hospitalizations and local government expenditures. Workforce turnover drives up long-term costs through recruitment, retraining and lost institutional knowledge.
In other words, delaying these payments is the opposite of fiscal discipline. It merely shifts costs — often while increasing them.
No new spending, just timely payment
The stakes are particularly high for human services. Nonprofits operating Department of Human Services contracts rely on consistent cash flow to function. When payments stall, the people most affected are those least able to absorb disruption: families on the brink of eviction, individuals with disabilities, seniors and children.
There is also a legal and fiscal reality the state cannot ignore: If services are interrupted, then the state will have failed to meet its contractual obligations to the federal government, putting it at risk of losing federal reimbursement. Nonprofits are the mechanism through which the state fulfills its obligations. Paying them on time is not discretionary — it is essential to compliance and continuity.
Georgia should act now.
Gov. Brian Kemp should order reserve funds be used to pay nonprofit contractors what is owed to them. State leaders should immediately release delayed payments for services already delivered, prioritize bridge funding for critical state programs experiencing shortfalls and make clear that nonprofit partners cannot be used as a stopgap financing mechanism during periods of federal uncertainty.
This is not a call for new spending. It is a call for timely payment, contract integrity and respect for the nonprofit sector as essential public infrastructure.
Nonprofits are not vendors of convenience. They are not reserves. And they are certainly not a line of credit.
If Georgia values fiscal responsibility, workforce stability and community well-being, the solution is straightforward: Honor contracts, use reserves as intended, and keep the systems that serve Georgians running — without forcing nonprofits to carry the state’s risk.
The cost of inaction will be far greater than the cost of doing the right thing now.
Karen Beavor is CEO of Georgia Center for Nonprofits.
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