Senate BillVetoedGovernment
SB 1240: Office of Nonprofit Empowerment.
What SB 1240 does, verified September 28, 2026
This bill creates the Office of Nonprofit Empowerment, which will oversee and coordinate state policy in support of California's nonprofit organizations. The office will provide guidance, resources, and technical assistance to nonprofits on procurement and grantmaking laws, regulations, and best practices. It will also develop and administer training and materials to state entities on advance payment and other strategies to reduce hurdles for nonprofits to access state funding. The office will be established within the state government and will be headed by a director appointed by the governor. The director will hire staff to assist in fulfilling the office's duties and responsibilities. The office will post its findings and recommendations on its website by July 1, 2028, to improve partnerships between nonprofits and the state. The bill will repeal these provisions on January 1, 2037.
Bill journey
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Last action: In Senate. Consideration of Governor's veto pending. (2026-09-27)Alert me
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| Sep. 27, 2026 | In Senate. Consideration of Governor's veto pending. |
| Sep. 27, 2026 | Vetoed by the Governor. |
| Sep. 03, 2026 | Enrolled and presented to the Governor at 3 p.m. |
| Aug. 27, 2026 | Assembly amendments concurred in. (Ayes 35. Noes 0.) Ordered to engrossing and enrolling. |
| Aug. 26, 2026 | Read third time. Passed. (Ayes 65. Noes 6. Page 6613.) Ordered to the Senate. |
Latest bill textEnrolled version, August 30, 2026 · 1,672 words
| Enrolled August 30, 2026 |
| Passed IN Senate August 27, 2026 |
| Passed IN Assembly August 26, 2026 |
| Amended IN Assembly August 20, 2026 |
| Amended IN Assembly August 13, 2026 |
| Amended IN Senate March 25, 2026 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Senate Bill
No. 1240
| Introduced by Senator McNerney (Principal coauthor: Assembly Member Hart) (Coauthors: Senators Richardson and Valladares) |
February 19, 2026 |
An act to add and repeal Section 12818 of the Government Code, relating to state government.
LEGISLATIVE COUNSEL'S DIGEST
SB 1240, McNerney. Office of Nonprofit Empowerment.
Existing law contains numerous provisions authorizing state agencies to award grants or contracts to nonprofit organizations to carry out various services and programs. Existing law authorizes a state agency that administers a grant program or contract to advance funds to a private nonprofit organization to which it has awarded a grant or contract, subject to certain limitations and requirements, as specified.
This bill, upon appropriation by the Legislature, would create the Office of Nonprofit Empowerment within the Government Operations Agency with the primary responsibility of overseeing and coordinating state-level policies and strategies that support California’s nonprofit organizations. The bill would specify various duties and functions of the office, including providing guidance, resources, and technical assistance to nonprofit organizations on procurement and grantmaking laws, regulations, and best practices. The bill would also require the office to develop and administer training and materials, in consultation with the appropriate control agency, for state entities on advance payment and other strategies to reduce hurdles for nonprofit organizations to access state funding and implement state projects, as specified. The bill would, upon appropriation by the Legislature, place the office under the control of a director who would be appointed by the Governor, as specified, and require the director to hire staff to assist in the fulfillment of the duties and responsibilities of the office. The bill would also require the office to post on its internet website, on or before July 1, 2028, opportunities to improve how nonprofits and the state partner, as specified. The bill would establish the Nonprofit Empowerment Fund in the State Treasury and would make moneys in the fund available, upon appropriation by the Legislature, to carry out the purposes of these provisions in support of the office. The bill would authorize the office, or the agency on behalf of the office, to collect and receive any gifts, bequests, grants, or donations from private, foundation, or nonstate sources to carry out the purposes of these provisions in support of the office, as specified. The bill would repeal these provisions on January 1, 2037. The bill would define various terms for these purposes and would include related legislative findings and declarations.
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares both of the following:(a) Nonprofit organizations are critical to the well-being of California’s communities, providing essential services and programs in the areas of education, health care, social services, the arts, natural resources, the environment, public safety, and more.
(b) The creation of a centralized voice for nonprofits in state government is necessary to foster collaboration and partnership between the two sectors, to improve access to resources and technical assistance for nonprofits for the ultimate benefit of program recipients, and to ensure more equity and fairness in service delivery and payment for those services.
SEC. 2.
Section 12818 is added to the Government Code, to read:12818.
(a) Upon appropriation by the Legislature, the Office of Nonprofit Empowerment is hereby established within the Government Operations Agency, with the primary responsibility of overseeing and coordinating state-level policies and strategies that support California’s nonprofit organizations.(b) Upon appropriation by the Legislature, a director of the Office of Nonprofit Empowerment shall be appointed by, and serve at the pleasure of, the Governor. The director shall be responsible for managing the affairs of the office and shall perform all duties, exercise all powers and jurisdiction, and assume and discharge all responsibilities necessary to carry out the purposes of this section.
(c) The duties and functions of the office shall include all of the following:
(1) Serve as the principal advocate and centralized point of contact in the state for nonprofit organizations and foster partnerships and collaboration between nonprofit organizations and state entities.
(2) Provide guidance, resources, and technical assistance to nonprofit organizations on procurement and grantmaking laws, regulations, and best practices.
(3) Conduct research and make policy recommendations on innovative best practices to promote greater accountability, efficiency, equity, and fairness in procurement and grantmaking processes and requirements, with a focus on reducing barriers for small grants, small nonprofits, and nonprofits working with disadvantaged, low-income, and underresourced communities.
(4) Conduct research and make policy recommendations on innovative best practices to ensure that state procurement and grantmaking support nonprofit organizational capacity to deliver programs, equitable compensation, and sustainable workforce practices, including, but not limited to, regional job quality standards and workforce retention strategies.
(5) Develop and administer training and materials, in consultation with the appropriate control agency, for state entities on advance payment as provided in Section 11019.3 and any other federal, state, or local law, and other strategies to reduce hurdles for nonprofit organizations to accessing state funding and implementing state projects while maintaining accountability to taxpayers. Training for state procurement professionals about how to apply advance payment provisions to transactions subject to the Department of General Services shall be administered by the Department of General Services.
(6) Strengthen coordination and alignment across state entities that have regular touchpoints with nonprofit organizations, especially during declared emergencies.
(7) Assist nonprofit organizations in identifying and applying for available state grants, funding opportunities, and technical assistance.
(8) Advocate to ensure that the nonprofit sector is properly represented in state policymaking, including by representing the views and interests of nonprofit organizations before other state entities whose policies and activities may impact nonprofit institutions.
(9) In implementing paragraphs (1) to (8), inclusive, regularly consult with nonprofit organizations and experts to ensure efforts are informed by the needs of nonprofit organizations.
(10) In implementing paragraph (4), in addition to paragraph (9), regularly consult with nonprofit organizations, relevant state agency and department leaders, public administration experts, and labor organizations and other worker representatives to ensure that efforts are informed by the needs of nonprofit workers and volunteers.
(d) Upon appropriation by the Legislature, the director shall hire staff to assist in the fulfillment of the duties and responsibilities of the office.
(e) The office may, subject to available resources and consistent with applicable laws and regulations, contract and consult with nonprofit organizations, external entities, and vendors to develop training, curricula, and other resources as determined appropriate by the office.
(f) On or before July 1, 2028, the office shall post on its internet website opportunities to improve the ways nonprofits and the state partner together while maintaining accountability to Californians and public resources. After the initial posting, the office shall review and update the information on the internet website regularly to ensure the contents remain current and reflective of evolving best practices. This internet website shall include, but not be limited to, policy recommendations, potential statutory and regulatory changes, and promising administrative best practices related to all of the following:
(1) Efforts to further encourage and expand use of advance payments.
(2) Mechanisms to reflect and compensate nonprofits for the true cost of doing business in contracts and grant programs.
(3) Reforms to ensure equitable, fair, and prompt payment to nonprofit institutions.
(4) Opportunities for greater consistency in grantmaking processes, application, and reporting across state entities.
(5) Other strategies to reduce complexity and barriers for nonprofits to enter into and implement contracts and grants with the State of California, with a focus on small grant programs, small nonprofits, and nonprofit institutions serving historically marginalized communities.
(6) Methods to facilitate communication and coordination with nonprofit organizations during emergencies.
(7) Protocols to ensure that state procurement and grantmaking promote high labor standards that support workforce sustainability and equitable compensation by nonprofits receiving state funding, including, but not limited to, both of the following:
(A) Promoting fair compensation practices that respect the administrative flexibility, regional variance, and operational constraints of the diverse nonprofit sector.
(B) Guidance on best practices to ensure consistency with applicable existing state law regarding prohibitions on using state funds for, or billing the state for, the costs of encouraging or discouraging union organizing activity.
(g) (1) The Nonprofit Empowerment Fund is hereby created as a fund in the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to carry out the purposes of this section in support of the office.
(2) The office, or the Government Operations Agency on behalf of the office, may collect and receive any gifts, bequests, grants, or donations from private, foundation, or nonstate sources to carry out the purposes of this section in support of the office. Subject to the approval of the Department of Finance, all moneys collected or received by the office or the agency from gifts, bequests, grants, or donations from private, foundation, or nonstate sources shall be deposited in the State Treasury to the credit of the fund in accordance with the terms of the gift, bequest, grant, or donation from which the moneys are derived and in accordance with Sections 8647, 11005, 11005.1, and 16302.
(h) For the purposes of this section, all of the following definitions apply:
(1) “Director” means the Director of the Office of Nonprofit Empowerment.
(2) “Nonprofit organization” means an organization that qualifies as an exempt organization under Section 501(c)(3) of the Internal Revenue Code or under Section 23701d of the Revenue and Taxation Code.
(3) “Office” means the Office of Nonprofit Empowerment.
(4) “State entity” means an entity within the executive branch that is under the direct authority of the Governor, including, but not limited to, all departments, boards, bureaus, commissions, councils, and agencies.
(i) This section shall remain in effect only until January 1, 2037, and as of that date is repealed.
Text of SB 1240 as enrolled, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions