Winston Churchill once said, “In times of great uncertainty, look for great opportunities.”
The Maryland state government has been and is operating in times of great uncertainty.
That is especially true when the general assembly and governor have a constitutional mandate to approve a balanced annual state budget and a new administration in Washington.
One great opportunity is the focus of a recent thought-provoking and impossible-to-ignore article in the Baltimore Sun.
The article headline was: “Maryland officials don’t know how much the state spends on nonprofits.”
The opening paragraph of the article says it all. “As Maryland funnels taxpayer dollars to nonprofits each year, neither state budget officials nor individual agencies can say exactly how much money is flowing, raising concerns about transparency and accountability.”
These concerns were affirmed by the chief of staff at the Maryland Department of Budget and Management when he told a Sun reporter, “Many nonprofits receive funds directly from agency grant programs, and we don’t track that centrally.”
Based on that reply, the Sun asked individual Maryland departments and agencies to provide details on the state money they send to nonprofits. The replies were varied and disturbing.
Some departments and agencies responded with specific dollar amounts, some responded that they needed time to determine the amounts and some large state departments responded that they could not provide the information. Those include the Departments of Health, Department of Labor, Department of Human Services and Department of Juvenile Services.
In January of this year, the governor’s director of communications told a Sun reporter that the state money allotted to nonprofits is “a miniscule amount of the budget every year.”
Is it really a minuscule amount?
David Brinkley was director of the Maryland Department of Budget and Management for eight years. Before that while serving in the state Senate, Brinkley was a member of the Senate Finance Committee and the Senate Budget and Taxation Committee.
Brinkley suggested to a Sun reporter that he wouldn’t be surprised if around $1 or $2 billion of the state’s annual budget goes directly to nonprofits.
That begs the question — Is there a way for the state government to be more transparent and accountable with greater details on the matter of providing state funds to nonprofits?
The answer is yes.
In fact, it is already being done at the Governor’s Office of Crime Prevention and Policy.
That office has a system in place to identify the nonprofit recipients and the amounts of state funding they receive from that office.
The system was launched by Dorothy Lennig, the office’s executive director, who previously served at the House of Ruth, a nonprofit organization that provides domestic violence programs.
About her experience at the House of Ruth, Lennig told a Sun reporter said, “There was always interest in the nonprofit community about who else was getting money. And so, I thought, you know, this is the public’s money, and it should not be a secret where the money goes.”
Indeed. The public has a right to know that information, and the government has an obligation to share it.
Earlier this year, a majority in the general assembly and Governor Moore agreed on new taxes, tax increases, fee increases, budget cuts, and rainy-day fund drawdowns to address a projected state budget deficit.
How many of these changes could have been mitigated or revised with a thorough evaluation of the effectiveness and efficiency of nonprofits that receive state funds?
Going forward, I am NOT suggesting cuts in state funds sent to nonprofits.
After serving as a nonprofit President and CEO in four state,s including Maryland, I fully understand and greatly appreciate their role and value in our society.
I do suggest there are ways to help ensure state funding for nonprofits is done in such a way that results in a maximum return on investment from that state funding.
To accomplish this, we need a commitment from the governor and every member of the General Assembly to take timely action on implementing the following policies and procedures.
- Use the Governor’s Office of Crime Prevention and Policy’s transparency and openness program as a model for every state department and agency that provides state funds (and perhaps passes through federal funds) to Maryland nonprofits.
- Regular evaluations of all nonprofits receiving state funds to affirm that their staff and volunteer leadership embrace and follow Peter F. Drucker’s observation: “Not-for-profit organizations need management even more than business. Good intentions are no substitute for organization and leadership, for accountability, performance, and results.”
We need these policies and procedures well before debates, deliberations, and decisions on a new state budget in the 2026 general assembly session.
David Reel is a public affairs consultant, public relations consultant, and a not-for-profit organizational governance, leadership and management consultant who lives in Easton.
