October 9, 2026 · Appropriations · 4,187 words · 2 speakers · 10 segments
Good afternoon. Welcome to the appropriations Committee. My name is rob clements. Frowood and represt legislative district two, which is cass county and eastern lancaster county. I serve as chair of the appropriations Committee. We'll start off by having the members do self-introductions, starting with my far right. Von lippincott. District number 34. Christie armendariz, district number 18. Myron dorn, district 30. Paul strommen. District 47. Son prokop, dict if you're testifying today, please fill out a green testifier sheet located in the entrances of the room and hand it to the clerk. When you come up to testify. And the clerk is coreyierbaum, our Committee tay. To better facilitate today's hearing, I ask that you abide by the following procedures. Please silence your cel when you come to testify, please state and spell your first and last name for the record before you testify. You will not be using the light system today. Written material may be distributed to the Committee members as exhibits only while testimony is being offered. Please be sure you have ten pies. Hd them to the clerk for distribution when you come up to testify. With that, we willeegin the. Open the hearing for lr for 75. Welcome, Senator andersen. Thank you sir. Clements good afternoon, chairman clements and members of the appropriations Committee.
I am Senator bob andersen, bobandersen, and I represent district 49, which includes northwest sarpy county in omaha throughout my two y I Legislature, iave been guided by the principle of good stewardship.s a farmer must be good sward of his lane legislators must be good stewards of the tax taxpayer resources. I introduced LR 475 in an attempt to. For a comprehensive review of state funding provided to nonprofit organizations. My aim is to promote transparency and accountability and oversight. Given the exceptionally broad nature of this study and the vast amounts of ever changing data, I view today's hearing is simply the beginning of an ongoing review. As members of the appropriations Committee, you are painfully aware of the funds flowing in and out of the state coffers. You're also aware of the challenges with providing oversight and determining the return on investment for taxpayer funds spent throughout the interim. My office is engaged with various state agencies and offices to begin to understand part of that process. Tracing state funds is a complex task. Have worked with the fiscal office who has has access to the accounting systems. Additionally, we pulled data from the state's conact information obtained over the interim indicates Nebraska dhhs had 258 service contract financial exchanges with probable nonprofit companies. The department of education had at least 37 exchanges, and department of economic development had 547 grants. Unfortunately, the data is.nd b that I mean some are single year contracts and others are multiyear s just started. They're not singularly focused. Even within each individual department, due to lack of coherency, it is virtually impossible to ascertain the value added by the contract or the grant. In some cases, we were able to compare contracts pulled from the state database website with receipts listed on the state spending website. The expenditures by fiscal year search function. Without determining the value of the service or product. We're not able to determine the aggregate return on investment for the taxpayer dollars. Wordone by nonprofits is not currently quantifiable or quantifiable numerical measures. That does not mean we should not carefully assess each contract and grant to at least establish an roi baseline. We do have testifiers here todayrom the nonprofit association reting nebska, who can offer some additio perspective. To reiterate, the intent of the studynot accusatory. The intentarency. I, my office has compiled all the data into a physical and digital file which has been shared with this Committee. I e off as wellse the various agencies, and compiling this data, and look forward to working with them further. Thank you, and I'm happy ttake any questio is time. Are there questions from the Committee? Senator dorn, this. Is whatdouts r this is, what state aid and grants that you're talking about that you are looking for or whatever we're talking about. That's one of them. I don't know if that's that one.
Looks like it's the one from the economic development that says state aid and grant programs appropriation expenditures. 2526 but it also lists the department of education on here ants or whatever, that 30 some department of education had 39 or something. I'm guessing that's at least that many here. Yes. So that's a compilation of departme of economicn development and dhhs. Okay. Of what they have announced or published as far as the different grants and financial obligations of what they have. They have contracts with and everything else. Okay. Thank you sir. Other questions? Senator strommen. Yeah. Where dou pul the information down from? Was this from the dhhs or just on where. Yea where did you. So I believe dhhs sent us the data. Okay. As well as economic development and education. The same. Okay. So from the state contract website. Gotcha. Great. Thank you. Ator okay. Good to see you, Senator andersen. Just a quick question on how you're defining nonprofits for the purpose of what you pulled for this for. Because I'm just looking at the very last page. For example, security equipment inc. Purchasing. I know ca is a company security company. How how did that end up on the list? I guess between like a private business and a nonprofit. How can you explain that a little bit to me so I understand that better. So to ask an individual company, you have a disadvantage. I know. I'm sorry. That's unfair. Unfair question. Yeah. But some of those are defined as a nonprofit or probable nonprofit by the generator, like from dhhs. It's a nonprofit. That's why they sanitize. Okay. Now, I went to some of the websites and it says that there are 501 c three or their website as a.org. Right. Which means they're nonprofit. Okay. So I didn't go to secretary of state for every single one. Yeah. Some of these I know them as businesses. So I'm just curious, like how that definition. Thank you. Other questions. I do actually on the page here, and this is actually pretty interesting stuff here. So under where it says like individualontractor and then has an individual on here, is that a contract that the state did? Did we actually enter contract with those people or plied for a grant and theny received a grant, or is it something else that's going on there? Because that seems pretty interesting. Good question. I don't know nswer to that question. But what when I did look at some of them, it just says that person was actually paid as an individrson wa paid certa amount of money, $7,500, 15,000 or whatever. It doesn't say doesn't articulate what the the process was, whether they applied for a grant or given thgrant or. Does it mean it does like when you get to education department, there's there's some people that just list individual and says individual conr. Okay.
Does it when you when you look that individual up, eithety was being used for or like, is there a traceability after that? Or we just know that they got money for something as far as I know, it was not articulated what the purpose was. Okahere's there's pa it where they do say for the company what it was it was used for. But like, for example, if you look at department of economic development, there is where we gave the state gave $2 million to john and the jet foundation, johnny rogs foundation.ht. So you can go to the website, you can go through and see what johnny rogers foundation is doing. So just a sheer numbers, I think. Economicelopme is 547 entities. So it's s jus yeah, tha part of, I think what at the end of the day, after reviewing the data that you're looking at now, it really drove me to that there needs to be a process to be good overseers of the taxpayer revenue, good stewards of taxpayer money. There needs to be a process that we can that is readily apparent what all oney a wasng to, what is being used for. And then in here ahat is retninges invement. So if I take, you ow, $1,000 from Senator strommen and I gave it to Senator prokop. So what was the value of the $1,000 that was exchanged between the two people, whether it's individuals orhe government to a person or government, to a foundation, government to. So you see, schools, there are contracts that are without a state organizations. Again, what's the return on the investment? And most of those quons can't answer for u now. And that really kind of highlights. The point is that I think oftentimes we don't have a coherent look at the money that's gone. We do in big chunks, right? Pretty ous. But when it gets down to, you know, under well,t is a big chunk of 10 million, 20 million, 30 million. You know, we don't I don't think we don't seem to have a good coherent view of where all the money is going and what the return on the investment of the taxpayer dollars. O questions. Go ahead. Go ahead. Chairman. Gary, did you did you was this total was there a total dollaralue that was totaled out o this? Do you h a idea? Econo oka t wasy question. Yeah. Yeah. Which one? If there was totalalue like what? The total is. I don't I don't have that. I think dhhs was like 220 million, go back to the exceld have spreadsheet and do some and some the column. Senator armendariz. Right. Yes, ma'am. So going over the list just on the department of ed and being on appropriations, some of these folks come us for appropriation. And I think it's obligatory like service unit. And the state does have to fund fund those.
And they are qualifying profits at the same time. So I think it would be helpful in your next iteration, is to peel out the obligations of the state of classifications that are classified under nonprofit. But there are also in statute that we fund them. So that would be legislation to don't fund service educational service units anymore, or the learning community. Sure. Right. That they're we're obligated at thish ute. So it'd be good to peel out every single organi t not an obligation. And then we get a better look at people that are coming grants and, and giving their story. Right. Yeah. And I think part of it gets back to our obligation these categories to find out. So average, give us an idea of how. Much impact there is with these different items. I saw peru state and wayne state would be examples of we have commitments to them. They're ongoing. But like the esu also. But they're.e are items that. In my ten years, I haven't seen a listing lik this. And I appreate y doing the research for that. Any other questions? Comment.asu look at each individual ry you some them are multi year contracts, single year contracts. So as I said in my opening, some already expired and some have just started. So it's a composite list of everything. So there really is a lot of siphoning a I could do a fantastic job with these website orse sprheets to bring them to have someind of something that is coherent and cognitive that we can actually articulate and understand and understand. Here's what we are spending money on. I mean, we do it at home, right? I mean, I know what my bills are at home, right? So these dollar amounts may not be just for one fiscal year. Correct. They'd be a 2 or 3 year. Yes. But in the total. So that makes the total a little t. This first page says fiscal year 2526. That's what it says. So that one. But the other ones maybe multiple years. Yeah. W you look at the start date of the contract, maybe 20, likeome of t ones for economic development. Some of the affordable that are multi year. So maybe from 2023 to 2027. Okay. Write that down. And that's why I said it. The if itself to not make it easily digestible and easily understandable. And that's really the over driving purpose, is the transpareandcountabili a, good sta, good information. And will you stay to close? Yes, sir. And most of the compilation was done by my le by katie keane. Okay. So she's a smart one that did all the hard work. Okay. Thank you. Thank you. Next hendry. Pl come good afternoon. Thank you. Chairman clements and members of the appropriations Committee. My name is anne hendry. A nnehindery, and I am the ceo for the nonprofit association of the midlands or nam.
First, I want to thank Senator andersen for taking the time to meet with nam and his willingness to have a conversation about LR 475. We appreciate the opportunity to provide our perspective and to testify here today. Nam, a membership organization, represents more than 800 nonprofit organizations across Nebraska and southwest iowa. We believe in transparency and accountability are essential for any organization that receives public dollars. Nebraska's nonprofit sector is a significant part of our state's economy. Our 2025 economic impact report found that Nebraska nonprofits generated 23.1 billion in revenue and spent approximately $20 billion in 2023. Nonprofits employ approximately 10% of Nebraska's workforce, or 100,000 individuals. Nonprofitst operating on thegins of our economy. They are majoremployers providinganervices, health care, education, excuse me. Childcare, arts, culture and workforce development, and other essential services across the state. The services provided by nonprofits statewide are essential and create that community fabric that helps make Nebraska the good life. At the same time, nonprofits already operate within significant accountability and reporting requirements externally and internally. Tax exempt organizations that receive government funds have federal and state reporting requirements, including financial reporting, program reporting, allowable allowable use requirements, and agency oversight. Nam practices transparency. Internally, wst o, independen auds, and irs 9990. N our website nam also offers the guidenes and principles assessment, which is available to all nonprofits, whether or not they're nam member. Guidelines and principles is a rigorous self-assessment tool for nonprofit governance. This assessment is designed to help identify organizational strengths and challenges to effectively plan for the future. The assessment is regularly, regularly updated to reflect legal requirements and current best practices across the sector, including practices that are required to receive external funding critical to demonstrate professional accountability to the public, stakeholders and prospective donors. Nam recornizations thatd beyond and commit themselves to nonprofit organional bt practice practices as a best practice partner. Our goal is to strengthen the nonprofit sector as a whole, and the essential programs andervices that it provides for all nebraskans. W rognize that a robust oversight frawork is essential while recognizing the already in place. Recommendthate nonprofits abilities to deliver programs and services vital to nebraskans, while ensurin tax a. We appreciate Senator anderson's engagement with nam and look forward to being a constructive resource throughout thistudy and beyond. And with that, I am happy to answer any questions. Thank you. Other questions. Sen. Strommen. Out of the 5483 organizations that operate and file nine 90s in Nebraska, how many? And maybe I didn't hear. But how many of those receive state dollars? Do we know that? I, I do not have that information. Senator thank you. Thank yr being here. Sog outth 10% of Nebraska's workforce, are you including all the nonprofit hospitals and education? Yes. Any 501 c three. Okay. Thank you. Oer questions. You mentioned website. What's the website? What is your web address? Our web address is nonprofit a like morning.org. Nonprofit a m correct.org. Yes.
All right. And we have a couple of handouts here. If you wanted to describe what really what what is in you? You bet. You have a copy of the economic impact report that we recently updated in partnership with the state data center in december, and we try to do that every few years as we can. And it really looks at how many people work for a nonprofit. We're a nonprofits located. What are their budgets? Most non-profits are small, $50,000 or less. Number of employees. What their area is the number? The largest service area for nonprofits are human service agencies. And then we also look at how much nonprofits pay in taxes, because there's this urban myth that non-profits don't pay you know, one corporate income tax, we do pay sales tax, payroll tax. And I'm pretty sure my landlord has property tax figured into my rent. So there's that. And then there's a summary briefly of what nam does. You can see where our members are across the state as we are a statewide organization. Any other questions. Yes. Go ahead. Thank you. So when I was talking to Senator andersen about some of these are obligatory. If we were to get you a list of those and they were members, would you be able to peel out and then be a little more granular? How many employees do they have and how much economic impact do those have compared to the whole? We could definitely look at that and see what we can do. Yeah, that'd be great. Yeah. Lng at the are there otherue looki at numr of non profits by county. There's 3 in my cou which is amazing. We have a county museum and I can't. And I know we have a foundation in elmwood that I'm a member of, but there's a lot more than I would have expected. 500 or more. Oh, that's douglas 1200 700 inancaster. Go thank you, Senator clements. Thank you for being here, do all 501 s are all non-profits automatically become a part of your organization? Or how or what? What's the criteria for that? Is there exactly this number throughout the state, or are there 50 that don't belong or what? How d they get to be a part of it? They thouldomend pay members. We have dues ranging that's based on budget size. So anywhere from $50 a year for small non-profits to $1,200 for larger non-profits. So of our 800 members, that's a small, it's a, you know, percentage based on overall non-profits and that 5000 or traditional, what we think of as 501 c three, it doesn't include like little leagues or those types of things. Yeah. There are certain ones that definitely include. Right. I mean, because they, when I call it their numbers, one, I call it be associated enough with us to qualify for some of this type reporting and stuff. Correct. Okay. So. Prokop.
Thank you, mr. Chairman. Question about something we talked about in during budget discussions is if non-profits receiving public money and if we're going to potentially make cuts there, what impacts that might make on kind private private match of that? How how common is that as far as any icollars at a c three is receiving to be matched by private dollars? Like, is that the norm? Is that doesn't happen very often. Can you speak to that a little bit if that matchingequirements. Because we're always thinking about, well, if you cut this, then you lose the private match. And so it's kind of a a two pa t really depends upon the match.here's a sayin who they if you've seen one foundation, ve seee fndation. A so it really just depends un the grants and how that is. I would say it's, it's pretty, very common. Common. Okay. Senator. Thank you. Thank you. As Senator durham was talking, it made me think of your membership. So are these numbers only your membership or is it all nonprofit numbers? Like, you know. That 5000 is is all nonprofits all iall not just our membership. Okay. That's yeah. That's good to know. Did you say your members are 800? We have 800 organizational members. Okay. Wow. Thank you for strommen.g that. Yes. Senat thank you. Chairman. What are the reporting requirements? I'm noticing that there's a five or a 990 easy. What are the reporting requirements ben 500 and 1ca 501 c three. And those different filings? It really a lotf it is sed on budget size. So a nine like a 990 easy. It's basically nonprofits t have veryns. 990, which is our tax return. Want to say it's 1 pages or. I something like that. It is requed by the irs that every nonprofit needs to submit something. That's when the easy postcard came into being. I want to say about a dozen years ago. Okay. Is the is there a donation threshold? So like something below like $50,000 or ishat work? It's yea below $50,000. You still have to do the 990 easy. I do or 3 nonprofits if they're under 50,000 of thens just the easyear, reporting. But they do have to file. Otherwise they'll be dissolved. It's just so irs got to a point where there are so many inactive and dormant ones. They said, we need to you need to solve something to let us know you're still alive, over 50,000, you have to go through more detailed contribution reports, what their activities are and itemize what kind of fundraising they did and so forth. Gotcha. Thank you. So yeah, 50,000 has been the cutoff for quite a long time. Any other questions? Seeing none. Thank you for coming. And thank you for your testimony. Thank you all very much. Those are all that was the only testifier we had on our agenda. So, Senator andersen, would you please close?
Thank you, chairman clements and members of the appropriations Committee for your time today. Just to reiterate, to clarify, but to reiterate, LR 425 isot accusatory in nature, and there's no indication of wrongdoing or anything else. And some people are going to want to demonize it as being that. And that's just not the case. It really is a investigatory into providing transparency and accountability. I think what it does is highlights a gap in our knowledge base on, on all the funds that are going to all the different places, other nonprofits and grants and everything else. I appreciate mrs. Henry for, from nam, f being here, for taking time out of her day, coming here to testify. And we'll certainly be following up with them. If there's any other questions, I'm happy to answer them at this time. Oth questions? Are you planning to pursue anything bend thi or after this date? Yeah, that's probably a very good discussion for us to have with the Committee is figure out is the most appropriate way forward. How do we you know, there's a website based on statute that the treasurer maintains based on statute 84.6 hundred two, the taxpayer transparency act. So we need to look and see everything supposed to be listed there. So what is the smartest way forward to be able to to gain the knowledge and insight I think that we all need as, as state representative so I wish I had I wish I had a good answer for that. Good question, but I don't. Any other questions? Go ahead. So are you've gone through dhhs and education. Will you be digging into all the other agencies as well to find out how they're spending? Because this is really fascinating information. Just being able to delineate out where these dollars are going, I think is extremely helpful. So regardless of whether they're going to nonprofits or not, it's just good to see how the money is being spent. Right? So what we did in preparation for the lr highlighted more gaps than it did provide answers. A that'sals going forward. You would think it would be our responsibility to provide that kind of oversight and have the knowledgef wre all the funds are going and what the return on investment is for taxpayer investment. Right. So you're highlighting the same thing that we've come up with. And now the question is, okay, so now that we understand that we have a problem, a gap and someing we need to work on, what is the way forward? And that's not for me to decide. That's for us as a body to decide. Okay. Thank you. I might point out that this first listing has agenc numbers.eah. We have agency numbers 27 through 78. And so there they have pulled together quite a few agencies besides education. And hhs. It's the tourism and corrections and quite a few. So any other questions?
Seeine, that concludes our on lr