Delaware’s 2026 legislative session brought important progress on several issues affecting the nonprofit sector. The most significant development was the General Assembly’s passage of House Bill 190, which updates the state’s Grant-in-Aid requirements. The bill is currently awaiting action by Governor Meyer. 

Grant-in-Aid provides critical support to nonprofit organizations serving communities across Delaware. HB 190 changed considerably during the legislative process, but the final version establishes clearer requirements related to eligibility, governance, financial documentation, accountability, and the use of Grant-in-Aid funding. 

One of the most consequential developments involved Senate Amendment 1. The amendment would have required nonprofit organizations to receive less than half of their operating revenue from all state funding sources, excluding Medicaid. This was a significant departure from the existing standard, which requires organizations to fund at least half of their operations through sources other than Grant-in-Aid. 

Counting state contract revenue against an organization’s Grant-in-Aid eligibility could have penalized nonprofits for doing business with the state. 

Thanks to DANA’s advocacy and direct outreach from the alliance and our members, the amendment was struck, and a new, more amenable amendment was introduced and adopted. It restored the narrower standard by requiring organizations to fund at least half of their operations through sources other than Grant-in-Aid, rather than sources other than all state funding. 

The final version of HB 190 requires nonprofit applicants to have operated for at least two years, maintain an active and community-represented volunteer board, and adopt conflict-of-interest and whistleblower policies. It also establishes additional financial documentation and disclosure requirements, clarifies restrictions on Grant-in-Aid spending, and strengthens the Controller General’s authority to address misuse or noncompliance. 

Once signed by the governor, HB 190 will take effect on July 1, 2028. The delayed effective date is intended to give nonprofits and state officials time to understand the requirements and prepare for implementation. 

DANA also championed House Bill 392, the Delaware Nonprofit Nonpartisanship Protection Act. The bill was designed to reinforce the longstanding federal prohibition against 501(c)(3) organizations supporting or opposing political candidates. Its purpose was to protect nonprofit independence, preserve public trust, and ensure charitable resources are not redirected toward partisan activity. 

Although there was support for the bill’s broader goal, it did not receive final approval. Its introduction nevertheless elevated the importance of nonprofit nonpartisanship, and DANA intends to continue working with legislators and sector partners to codify these protections next year. 

House Joint Resolution 12 was another important priority. The resolution proposed establishing a task force to study and modernize Delaware’s procurement, grantmaking, and contracting relationships with service providers. The task force would have examined contract and payment timelines, reimbursement rates, indirect costs, administrative requirements, transparency, and provider sustainability. 

Although there was broad agreement that these issues deserve further study, HJR 12 did not advance. Even so, filing the resolution created a framework for continued discussion and brought greater attention to the challenges nonprofits experience when delivering services through state agreements. 

DANA plans to pursue contracting reform in the new General Assembly and work with policymakers, the executive branch, and nonprofit service providers to identify a productive path forward. We will also continue monitoring HB 190 as it awaits gubernatorial action and support members in preparing for its potential implementation.