Vermont Legislature SmartTranscripts:

[Rep. Michael Marcotte (Chair)]: Five. Hey. Good morning, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Wednesday, 01/07/2026 at 09:05 in the morning. Starting our our day off here to speak with and and with. We have both CEOs with us this morning. Appreciate your coming in. Well, it's not the greatest today for driving, but I think just to tee it up for everyone, last session, we spoke with with Vita and the the HFA about the possibility of Vita being able to assist in some financing for housing in the commercial realm. And I think we're blessed to send the letter to then director, as in Bohemia, sent to Warren Collins, BHFA, STEM, and I think transition changed. And Joan now is executive director PETA. So I think Joan and Mark have been working and talking and just asked them to come in and update us on how those discussions are going. Joan, welcome.

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: Great, thanks.

[Rep. Michael Marcotte (Chair)]: You joining us.

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: Thank you so much for welcoming me to the committee. Happy New Year. I'm Joan Goldstein, CEO of Vermont Economic Development Authority. I have a little slideshow. I don't know, Mary Grace, if you I didn't wanna make any assumptions that anyone knew, that everyone knew what VITA did. I I understand some people were newish to the committee last year, so I just thought I'd do a a summary. We were created by the General Assembly in 1974, so last year was fifty years in business. Our whole mission is to contribute to the economic vitality of the state by providing a broad array of financing to eligible business that create jobs and advance the public policy goals of the state. Since that founding, we've provided about $2,600,000,000 in financing to thousands of small businesses, entrepreneurs, agricultural enterprises to enhance that vitality. So, yeah, where does Vida's money come from? We borrow money and then we lend it. So in that sense, we very much resemble a bank. There are instances where we do get appropriations, but we're not dependent upon appropriations in order to lend funds. So as an example, we have $285,000,000 worth of loans on our books and there's $230,000,000 worth of debt. So we really wanna make sure that those loans get paid back. So if we're looking at Yeah, there's sometimes other sources, like we do apply for federal intermediary relending program,

[Rep. Jonathan Cooper (Member)]: which

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: is we borrow money at a very low rate and then lend it out to small business. And then the state, at time to time, like last year, was a disaster recovery loan fund that we were able to receive an appropriation for. This

[Rep. Michael Marcotte (Chair)]: is

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: just a picture from our fiscal year twenty five annual report of what we accomplished in fiscal year twenty five, 173 loans, 60,000,000 worth of value, 38,000,000 on the commercial side, and 17,000,000 on the agricultural side. And when you look at the next page, and you'll see of the current portfolio, about 30% of our portfolio is agriculture and commercial. On the agricultural side, what we do is direct lending, so that we are the primary, in many cases, the only lender to agricultural enterprises, and those include expansions or acquisition of land, equipment purchases, working capital, housing actually for farmers and for farm workers. And occasionally, we fund projects alongside other lenders, but primarily, we are the only lender in the deal. Contrary to the commercial lending side, where we're only 70% of the portfolio is we are with a bank or a credit union. So in many cases, we're subordinated, we're the junior lender in the deal, the bank takes the primary position. Some cases we rank senior together with a participation. The only other direct loans we do on commercial side is the broadband portfolio and the energy portfolio, which up until recently was pretty significant, but we see that dying back a little. The projects on the commercial side include downtown development, hotels, manufacturing, expansions, land acquisitions, equipment purchases. Here are some examples of some of the transactions we've been in recently. I think we're at the next page, has some more historical names, just to give you a flavor of what we've been involved with. Okay, so why do we want to get into housing? It's been well documented. Everyone is talking about a housing shortage, and everyone is talking about how housing is economic development. Back when I was economic development commissioner, there was very few meetings where housing did not come up as one of the major impediments to growth, major impediments to workforce development, and there was very little that we could talk about. So here at VIDA, I'm thinking, well, on the commercial banking side, multiunit housing is within the commercial real estate portfolio of banks. I'm talking about like five plus family. And we're right now prohibited from even participating in those. So our ask is that in order to play a role to help assuage some of the issue, why not add VIDA, give VIDA that capability to do to expand the commercial real estate capabilities with the banks and credit unions. Only when they need us, we're not directly going out and soliciting that interest. It's really whether or not the bank needs us in the deal. Yeah, so we make ourselves available, if they don't need us, they don't need us. There are plenty of larger banks that usually don't ask us into participations even on the commercial side. So we would anticipate that would probably be the same on the housing side. Yeah, when I went on a tour, back in July, I just met with just about every bank, they all were inquiring, like, why can't veto lend to housing? I'm like, it's statutes. So, yeah, the current limitations are that even though the letter was very, very good, the fact of the matter is, we're not brought into those discussions. There are some exceptions where people do reach out to us, and we say, well, we can't currently lend to housing. But it was tough to get the lenders on the team to start talking about housing transactions when they're not gonna play a role. So it was tough for us to really gather up all the transactions. Having said that, we're aware of a few that need all the help they can get. I'm thinking about the Hula Housing Project, the housing project in Rutland that's affiliated with the hotel. We've learned a Brattleboro deal that Winston Crowley that's putting together their capital structure. So the letter, it was just hard to come up with a gap analysis. Maybe Maura has more information since she's in much more frequent contact with the housing developers that are out there looking for funding. And the way Mora and I have talked over the last few months just about proposed housing language, so that we're not encroaching on anything that VHFA would do, and we're not duplicating anything, it's basically with deference to VHFA if they don't wanna be in it, or even if they wanna share exposure. We give them deference about whether or not they wanna be in the transaction. So we thought that changing the statute to allow us to lend doesn't force anybody to work with us. It doesn't you know, it's just the same it's really treating it the same as the other commercial real estate, the other commercial portfolio transactions that banks would do on a day to day basis. You know, Multi unit housing is sometimes a very large percentage of that portfolio, and we'd like to have the permission to participate in that. Yeah, so that's the And then just adding more liquidity, it really can't hurt adding another lender to the mix. There's numerous cases where it's so expensive now that you do have to put together multiple funding sources. And again, since we're the Economic Development Authority, we'd like to play a role in that solution. That's kind of all I have. I mean, we do currently have economic development rates at the authority that if it's meeting the public policy goals of the state, we are reducing rates. And that's just by virtue of the fact that we were able to receive a significant influx of capital from the state's small business credit initiative, which was ARPA money. And so we're able to then bring that back and bring that benefit down to the borrowers. So again, with that blended rate with commercial banks, that could help make a deal happen that may not otherwise happen.

[Rep. Michael Marcotte (Chair)]: Shouldn't you go?

[Rep. Jonathan Cooper (Member)]: Thanks very much. Good good old feeling. Happy happy to see

[Rep. Michael Marcotte (Chair)]: you come back with you know, the proposal. I'm curious,

[Rep. Jonathan Cooper (Member)]: the language of private compact multiunit, I'm assuming plus five. Yes. Do you think that that encompasses housing such as manufactured home communities, that kind of thing?

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: It could. There's no in other words, we wouldn't wanna put any type of, you know, requirement on the you know, whether it's stick built or manufactured. Like, we would not want to put that type of parameter on it.

[Rep. Jonathan Cooper (Member)]: Where where I am is that it's a candy. Yeah. I mean, some of the larger villages, you know, can they can handle so what you usually think

[Rep. Michael Marcotte (Chair)]: of in terms of multi units.

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: Right. You're thinking about one character.

[Rep. Jonathan Cooper (Member)]: Most of the county, you know, manufactured home communities are the affordable, multi developed rural space, rural counties like ours.

[Rep. Michael Marcotte (Chair)]: I have one other question.

[Rep. Jonathan Cooper (Member)]: I can't remember whether you are participating in the land bank discussions, and I'm curious as to how that all fits in.

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: Yeah. I I have participated, not in all of them. I wasn't on the official committee, but got asked in, and I think it's a very interesting concept. Yeah, if VITA could play a role in that, that would be ideal. We know that there's lots of contaminated properties out there that aren't doing anything. And so I don't know, I know someone sent me the final report, but I did not get to review it. Not sure what their recommendation is, but there are so many different entities around the state, rather than creating a brand new entity, is there an opportunity to sort of add that type of capability, which I don't think would require necessarily legislative action? I think that it can't be all things to all people. I think we have to cover kind of Well, not let scope creep get the better of us, and just try to focus, let's say, on contaminated or things that could be rehabbed into housing or economic development. But I I very much think that's a it's a very good idea. I know that municipalities have it all over the country. Vermont is so small. Maybe it has to

[Rep. Edye Graning (Vice Chair)]: be a statewide actually. Thank you. You

[Rep. Emily Carris Duncan (Member)]: had mentioned just quickly that your energy portfolio had gone down. Do you see any particular reason for that? Also just what does the energy portfolio encompass?

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: Well, most of it was solar developments, and it was as a byproduct of the federal tax credit, and that went away. So many of them were tax credit driven deals, and so we're seeing less of that activity. What we're hoping for is that there would be battery storage or other types of deals, but so far, we have not seen that.

[Rep. Edye Graning (Vice Chair)]: Question? So I have just clarification. I think, if my memory serves, that you've done housing for agriculture.

[Rep. Michael Marcotte (Chair)]: Yes, we

[Rep. Edye Graning (Vice Chair)]: do. And you still do that.

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: We still do.

[Rep. Edye Graning (Vice Chair)]: And it's a small percentage of the agriculture portfolio.

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: Happens is it's intertwined with farm because the farm is a kind of one parcel thing and the house is on it and the farmer typically lives there. And then there might be other buildings where farm workers work. So we're allowed to do that by virtue of statute. I don't think we're excluded. That happens very continually. It's not even I don't think we separate it out like that's housing. It's part of the agricultural loan.

[Rep. Edye Graning (Vice Chair)]: Okay, so there's no monitoring of how that's working or not working or anything because it's just part of

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: Yeah, it's almost like they need to provide housing for the farm workers and they need a house as well for themselves.

[Rep. Edye Graning (Vice Chair)]: So that was one. And then my other question, totally different. This makes a lot of sense to me. So the question is, why haven't we done it already? What's the downside?

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: That's precisely my question. I don't know. It just may have been it's the way it's always been, and no one really questioned it. Can't answer that. I have the same question. I don't think there's downside to this any time of the marketplace, and particularly now when there's a shortage of supply. Let's see. If it's not needed, we won't be asked into transactions. If it is needed, we will.

[Rep. Edye Graning (Vice Chair)]: And my only thinking is, is there concern that there won't be money for other things, that all the money will go to housing?

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: So we would have to manage our balance sheet to ensure that that doesn't happen. We wanna be available to business and we're not gonna say, okay, we're gonna do every single housing deal that comes in. We're probably going to have a set amount, so that we're not going to go overzealous and crowd out some of the capability. But we have capacity to do this. We right now have sufficient capacity.

[Rep. Emily Carris Duncan (Member)]: When it comes to your source funding, do you does VITA and BHFA do compete at all for that source funding? Or are you on some different tracks?

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: I think we're on different tracks. Mean, Mark could speak more about it, but we issue commercial paper. That's a floating variable rate funding from JPMorgan. We also have a line of credit. We have term loan from TD Bank. For the agricultural portfolio, we have a line of credit with CoBank, which is this national agricultural financial institution. So I don't think those are the sources, I'm not sure. And then when

[Rep. Emily Carris Duncan (Member)]: it comes to federal grants or anything like that, are you in competition at all? Or is it also possible to collaborate?

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: I think collaboration would be the better way to go about it. So far, our federal grants have Well, not really grants, but the intermediary relending program is we borrow and then lend it. I'm not sure they're in that, because that's really business oriented. Have another federal program, we're waiting to hear, we're still waiting, it's been held up on energy efficiency borrowing. And so, I'm not sure if other people went for it, but I don't envision that since we kind of really are pretty self sufficient. We're not always seeking out brand new grants because of the kind of compliance and work that's necessary to go through that. We really want to be as streamlined as possible. There's a transaction, let's look at it, let's underwrite it, let's service it, and keep going on to the next and to the next. There was another question, did I answer? You got them all. Okay.

[Connor Daley (Principal, Rutland Strategies)]: There we go. Thanks.

[Rep. Edye Graning (Vice Chair)]: Good morning, everyone. Good morning, Amy. Hey. I too have a PowerPoint.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Let me

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: there we go. Hi. Good morning. I'm Laura Collins. I'm still the executive director of the Vermont Housing Finance Agency, which I'm grateful for, And I'm grateful to see all of you back in these seats today. Sorry to those of you who couldn't make it in. Abbey, you're not wrong. The highway was interesting on the drive. Thank you so much for this opportunity to come back and report back to you. Joan is exactly right. We've been talking since the last session and have checked in with each other and others. And I want to walk through some of the things that VHFA has done since I've last seen you and talk about where we may go from here. I just wanna say, first off, I love the idea of partnering with VITA. Last year, we partnered on an off-site manufactured housing report, which has recommendations of what the state should be doing to expand that model of housing. I'd be happy to come back to talk more about that. Also, have examples of working together on the Bennington High School redevelopment in Winoos Vida financed a hotel that is done with the same developer in partnership with a housing project. For the finances to work, they really had to go together. And there's other examples, but ways where VIDA is doing the commercial lending and VHFA does the housing lending. But then there is a common senseness to our work where VIDA can and does do a few units of housing here and there when it's otherwise a commercial property and the housing is just one or two apartments, I believe. I don't know how to speak to that exactly, but it's just a minimal side issue. Same thing with VHFA. Our housing that we finance will often have first floor retail in a downtown area. And so technically we are supporting some commercial space, even though we don't do commercial lending. But again, I see that as a common sense approach. And it's usually a proportionality thing of it's a minor element to an otherwise housing project in my world, or it's a commercial project with just a couple of housing Joan talked about the agriculture, the farm labor housing. I'm so grateful that they do, because that really is a business loan. It is housing, but it is a function of the business, as Joan said. As well as a couple of years ago, they expanded their statute to get into licensed assisted living, which again is housing. But in many ways, it's an element of a business, just like the medication management and nursing and amenities that are offered in those things. So I do think that there's a lot of ways that we've found a common sense approach of how to work together. And so I think it's a fair question of, well, why don't we go farther with that? And so I'm gonna walk through some of this. I just wanna summarize of what are the causes. I'm not gonna spend a lot of time on it. I don't think I'm gonna get challenged on these points. These are commonly accepted causes of why we're in this situation. And so I also think that I have lots of solutions of if you wanna address the housing problem, These are the things I think you all can help us to do. Would love to spend an hour on each of these nine bullet points and tell you exactly how I think the world should work in Vermont. But what's not on here and what I'm not hearing is that unlike 2009 or 2010, lack of financing is not a barrier right now. We have money to lend. Banks, everyone will tell you, you can get a loan. Having a loan is not the problem. The problem is paying for

[Rep. Michael Marcotte (Chair)]: that loan

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: and having the debt service to pay for that loan will drive up rents. And rents are too high anyway. So the problem is, how do we get not so much loan dollars, but some grant dollars? And you all have been doing appropriations. You've been giving money to subsidize loan rates and do appropriations. So I do think there will always be a call and clamor for lower rate financing. I was running the HFA when interest rates were two something percent. And let me tell you, people wanted lower. And so yes. Will people say, I want a lower interest rate? Yep. I can guarantee you that. And at some point, we have to be thinking about some of these trade offs. So these are the things, while I'm not hearing a lot about how there's not loan dollars, I do want to tell you what I've heard from developers and what I've heard from bankers. This is now beginning to be a bit of a dated survey, but we did a comprehensive survey of developers and builders and the associated industry and market. And we published the results back then. And you can see that there are a lot of causes that were causing slowdowns in the midst of the pandemic. And labor availability right there is one of the issues. And so furthermore, we asked about what the specific labor needs were and you can see, and it was causing delays in timelines. And it said, has the cost of labor increased at a level exceeding recent trends? Yep. And then it goes into what is the problem with labor. And the problem was having trouble finding labor and not having skill sets and the cost of labor was just so much higher. And so there is a lot that needs to be done to support labor. And I'm gonna get to later about ways that I'd love to work with Vida, have Vida support that to get at this thing. Because I can't if I could fix housing, I promise I would have done it by now and I'd be off in Florida. We're not dealing with this weather. But there are things that we can't do, and and spring labor is a

[Rep. Emily Carris Duncan (Member)]: big one.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: In addition to talking with developers, which we always do, your letter prompted me to reach out to these banks and credit unions and ask them these questions about what are the limitations and what am I missing. We're always I mean, our mortgage program, just to remind you, if you are a first time home buyer and you want a mortgage from VHFA, you don't come to VHFA. You don't know where our offices are. We don't have retail staff across the state. We have a quiet office in Burlington with a locked front door, frankly. We are business to business. It's through participating lenders like these groups that you walk in and you say, here's my income. Here's what happens. And so we're always talking to lenders, both through our mortgage program, but also in partnership on multifamily development projects. So we ask them, are you having limitations on the loans that you wanna make? And do you not have subordinate financing? Are there recent examples of barriers where this was an issue? Maybe there is a size of a deal or a concentration risk or a region of the state. Maybe it's a rural small issue. Maybe it's a big issue of, I can't take on more than whatever percentage of a deal. Maybe there's something about the risk profile of the housing. And so I was trying to spur some ideas to get people's thoughts going about what are the shortcomings and where are the gaps. Because let's be honest about this. BHFA is a lender. Vida is a lender. All those banks I showed are lenders. Loans are great, and we need to make loans because that's how we stay in business. We are not in front of the Appropriations Committee, VIDA or VHFA, asking for you to help us run our organizations. We are not agencies of state government in that way. We are completely self sustaining. We have to make loans in order to continue to live our mission. And so everyone wants loans because you make a little money off loans. You stay in business and you pursue your mission that way. So if we have created a gap in the market and we are not meeting the needs of banks, communities, housing developers, you all, I mean, everyone gets a say in what we do, then we want to fill that need. And I wanna be eyes wide open about what those are. Again, the assisted living conversation from a few years ago, some of you were here for, that was a perfect example. There was a gap in the market. People were saying, VHFA, are you gonna fund Wake Robin's expansion to add more beds? No, we're not. That's not what we do or where our focus is. And so there was a gap in the market. Great. Someone else do that. These questions, getting to just offering subordinate financing on multifamily housing, that

[Rep. Michael Marcotte (Chair)]: is what we do.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: So if there's a gap in the market, I want to be aware of it. And these were a couple of the examples of what we heard from some lenders. Of course, no one gave me permission to put their names to it. But these were emails I got from folks. And the responses were pretty unanimous that they weren't talking about a lack of financing tools. They were saying, it's the cost of housing. It's too expensive. They were hoping we could work on permitting times, unrealistic energy requirements, other things that add to the cost of debt. But that the solution is not more debt. It's cheaper housing so that the housing can afford the debt that's there. It also sounds like a pretty competitive market. One lender was talking about they put in bids for a construction loan, and there's multiple banks angling for that loan. There's not a lack of competition here. And so if we or neither anyone came in as a subordinate lender, it would be available to all the banks equally. So it does mean that we could show up and maybe reduce the cost of that construction loan a little bit and have it be a little more affordable. But it wouldn't give a competitive advantage to one lender over another. And we do this. We can be a subordinate financer, VHFA can. And we have that ability and authority right now. VHFA and VIDA are very similar. We're both 50 years old. Happy birthday to us about a year and a half ago. We were created around the same time. We both have strong, stable track records and do great work. You can see here, I pulled from VIDA's most recent annual report and ours to show some of the lending that's been done and our assets and total lending over a fifty year history. I want to point out ratings because ratings become important. As I said, we don't come for appropriations to support our agencies. Instead, we have to borrow the money. And Joan talked about using commercial paper and lending through credit facilities with lenders. We do the same kind of thing. We do bonding and borrow other people's money to lend out. So our agencies both have a strong issuer credit rating, and it's the same. VHFA has been, we don't often lend through our issuer credit rating. And issuer credit rating is our agency. And so it's, know, Mora's credit rating or something like that, the equivalence. And as you can imagine, the higher your credit rating, the lower your cost of borrowing is. We see that with mortgages and everything like that. With our agency, we don't issue out of our VHFA credit rating often. We have created bond indentures, which are secure, small subsets. Imagine VHFA is like parent company, and we have a couple of these bond indentures that we issue out of. Why would we do that? Because we wanna segregate that indenture is safe, and it's not gonna get messed up if the agency does some funny things. It's securitized by the loans in that indenture. And those indentures have similar characteristics to make them really safe and secure. And so we have a couple indentures I could bore you with. We have one for single family. We have one for multifamily. But in 2007, we did something actually very innovative and we're early in the nation to do this. Now everyone else is following it, where we have a multipurpose bond indenture. And it's single family and multifamily together. We did that back in 2007. It was very hot and exciting at the time. I'm sure you all read all about it. So starting 2007, we started issuing out this new indenture. And for a couple of years, it didn't have the history. Think of your own credit rating. Young people don't have as good credit rating as older people because they don't have that history. But over the years, we've built up that multipurpose indenture. And that's where our rating right now is three notches higher than our issuer credit rating. That AA1 means we're three notches above because that is a good deal and Wall Street knows it and they like it. And it has a track record and it is great. And so as we're able to offer in this indenture higher rated vehicle, then lower carbon costs, that means like 0.3 of an interest rate, call it 30 basis points, is the benefit we get through doing that. And so there's a real benefit to going with and building up something that's tried and true and has that history and keep developing it as opposed to creating a new indenture and something new. Sometimes it makes sense to do a new indenture because you're doing something exciting, but or issuing off your issuer credit rating, which is not as great for us. We do fund our programs a little differently. I'm not worried about competition of the funding. Someone asked, it's unlimited, let's just say. Wall Street is probably always going to be there for well regulated, good organizations like any of ours. And so there's not a limit to it. We choose to do because housing loans are thirty year loans at a minimum and because they expect to be fixed rate, that we do only fixed rate borrowing to match our fixed rate loans. And that's the model that we've done. We also have access to tax credits and other things like that, just like VIDA has access to other small business association things that I don't follow closely. But that's where we get to that. So our agencies are here to fill market gaps, to do what banks and credit unions can't or won't do. Maybe that's take on a riskier loan. Maybe that is to do something the energy lending that Vida did years ago was so innovative and really got Vermont a head start in lending. Solar, I believe, and a lot of things that the commercial banks weren't yet ready to lend on. And then Vida did it great. And I think everyone noticed like, oh, wait, these are great loans. So we're meant to be some of those leaders in that area and to administer some public funding. We have tax credits and things like that. But the idea of why we came to be fifty years ago is to work. The idea was VHFA was going to do housing. VITA was going to do economic development. And that there's actually, I think my next actually, let me go two slides. There's a lot of quasi public entities that VHFA works with. And yes, I have the state of Vermont's logo at the bottom here. And they're not quasi public, they are just public. But my point is that all these organizations with VHFA, these are all quasi public entities like VITA, like VHFA. They have often the governor or the legislature appoints some or all of their board. And there's some kind of tie in with state government. The legislature created all these entities in some way. And this, pardon my childish scribbling, these four are the private activity bond issuers. They were all created about fifty years ago. VSAC is a little older than the rest of us. But we were all created because we all have access to the same source of money, these tax exempt bonds. And theoretically, we all have the ability to issue these tax exempt bonds and then use that money to loan out for different purposes. And separately, the blue line circles, these are the affordable housing funders in the state. And so we work with all these people in different kind of ways. When it comes to those private activity bonds, all of our entities have access to them. But we all have a carved out role here and lane where we've specialized because you can't be everything to everyone. And so this has worked really well for the past fifty years. So private activity bonds are, like I said, tax exempt bonds. It used to be, whole history lesson, pre-twenty ten, there was quite a little bit of thumb wrestling between these four agencies behind closed doors about divvying up the state's allocation of these tax exempt bonds. The state only gets so much and there was a lot of competition for them. And so this was valuable money because it's tax exempt. So you would pay a lower interest rate. You'd get the money for cheaper so we could lend it out for cheaper. And we would debate this. In 2010, if you remember, the Feds took over higher ed loans and VSAC's role really changed a bit. And their demand for these bonds dropped off quite a bit. These bonds, when the state gets an allocation, it can roll that allocation forward a couple of years. So they don't expire on December 31 that year, but they can roll a little bit. So by 2013, the state started losing some of this allocation, meaning we were given so much money to issue tax exempt financing, and it wasn't all being used. Because VSAC used to use a lot of it for higher ed lending, and now they weren't there gobbling up a lot of it because the feds were doing that. And so VHFA got a lot of it and we started having volume cap expiring. What does that mean? That between 2013 and 2022, over $300,000,000 of this valuable tax exempt borrowing capacity never got used by Bernard and it expired. And the feds put a clock on it and they say you have to use it within a couple of years of being issued it. And we couldn't find a use for it. People didn't want this really valuable money. This is, again, highly rated agency. Tax exempt borrowing is cheaper than commercial borrowing that you would get that's taxable. And it was going unused. Now that changed a couple of years ago. Why? Because y'all started, you really ramped up how much state money you were giving to the Vermont Housing Conservation Board. And because they had some state money, this money could leverage with that, work together. And all of a sudden, it was easier to use this money and that unlocked some federal tax credits. And it does has all these great benefits in Vermont if you use this tax exempt money. Automatically, it comes with these federal tax credits and that'll pay for 35% of a building to get built. So this is a great thing. So we don't wanna see this cap go unused. We need and want to use this money. And so I think one of the state's priorities should be using this money as much as possible and not letting it expire and not be used. It doesn't really go back to the Feds, but it just expires. And that should be a priority of the state because we are missing out on a benefit that the Feds are giving us in that way. But all this private activity bond talk, the Feds only let you do things tax exempt when it has a public purpose. And so they want to see that at least 20% of that housing is affordable. They're gonna make sure that there's an affordability component. And so one of the questions is like, okay, well forget private activity bonds. Maybe VITA won't use private activity bonds and all the affordable stuff will be VHFA because they're the affordable agency. And VITA will do the non affordable stuff. Oh, this is just I already said this. I'm talking about affordable housing here. These are the agencies that do that. I wanna point out, it's very unusual for any state to have this many housing funders. The fact that we're the second smallest state and we have four of them gets me laughed at a lot in national meetings. Because most states have one, maybe two entities that do the affordable housing lending. All of our other New England states, the max is two agencies. There's a governor's office who does some stuff because the governor will always want to have a policy opinion on housing. And then there's an external VHFA equivalent because we're dealing with bonds and housing loans are risky and the state doesn't want that on their balance sheet. And so they want to segregate that as something separate. Everyone else has like two agencies, we already have four. We did do a study years ago about what is driving up the cost of affordable housing. I want to be clear. I'm just talking about affordable here. And you see it's like increasing home prices and rising construction costs. And one of the findings was that the more expensive the project, it's the more sources of money you have. So what's the risk of adding in more lenders? It actually can add costs. Now we're not clear on if that chicken or the egg came first. Was it a really expensive project so they had to get a lot of sources of money? Or did having a lot of sources of money drive up the cost of that housing? I can't prove either way. I don't know. We just see that there's a correlation. If you look at this table at the bottom, that if there's six or more funding sources, that was the highest per unit total development cost. That's what TDC means. Whereas if you only have one to three sources of funding, it's cheaper total development costs. So it's because you have in application fees and another set of lawyers reading it. And another couple of weeks for a board to make a decision or credit committee or whatever it is. You got another set of staff underwriting it and saying, actually, I want your appraisal to say this and all that. So there is some risk of adding some cost with this. So when we have subsidy, these are the people VHFA can help. On the first row, I didn't want to list all 14 counties, so I picked three of my favorite.

[Maura Collins (Executive Director, VHFA)]: No, I'm joking. They're not my favorites.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: But I picked three. In the second two rows, don't ask why, but there's three different income limits based on a percentage of area median income. What you see here is that the first row of information, these are BHA's bread and butter, what we've done for fifty years. We're known as affordable housing, and that's mostly what we do. And so we mostly do affordable programs. And the income limit for a three person household, if you live in these counties, you have to be earning under, I'm gonna say $80,000 a year. And then the rents are gonna be definitely under $3,000 hopefully under $2,500 for a three bedroom apartment in these communities. But in the last several years, seeing the growing housing needs, seeing that's not just deeply subsidized lower income folks who need housing, but that this stretches well up. We stretched into serving moderate income households in these middle income programs. And with these, you can see whether it's a rental program or a home ownership program, the second and third rows. These are the income limits that we have for these programs, well into the six figures. And so for rental housing, you see that the rents are well into $3,000 a month, maybe $4,000 a month. Now, if you look at renters and what they earn, these income limits cover over 90% of all renters is who we can serve with these programs. And I couldn't find I don't want say there's none because I can't I don't know why relisting in the state, but I couldn't find listings for higher than these prices widely available. I mean, even I'm from Chittenden County. I know I'm not supposed to admit it, but $4,000 a month is a pretty luxury rental at this point. And I hope for as a state that we are not trying to create that part of the market. And for the homeownership prices, 95% of owners actually earn less than these amounts household wide. And that 80% of the homes sold fall within our program. And this is what you all have given us subsidy to serve appropriations. When it comes to what VHFA can serve in our statute, we don't have any limits. This is straight from our statute. And I colored some in orange to tell you the secret, and please don't change this, that we can set our income limits based on any amount deemed by VHFA to require assistance. Please don't change that. I don't point it out often because we're doing a good job with that. We are, like when the pandemic happened and the housing crunch got really intense, we deemed that middle income people needed assistance, and we're not wrong. And I'll defend it, and I got data, and I can show it. But we can flex to income levels even though we have the longest history of serving the very lowest income. We can make adjustments as needed. But I want to remind folks that what is needed is still the lowest income. It is still those who are earning at the lowest amount. And this just shows that we all know about the thirty forty thousand homes we need. Most of them, two thirds of them need to be rentals. And threefour of them need to be for people earning less than 80% of the median income. So that's where the biggest demand is, is actually for the lowest price. There are ways that we structure our loans a little differently. We don't have loan limits, I think. And this is where I'm very open. I'd love for Joan to jump in when I'm done about if I got something wrong in the beta column. But I believe that this is the statute. They have limits on how big the loan can be and that they can do 40% of a loan. We can do 100% financing. Right now, economic development terms are shorter. Business loans are just a different kind of beast. Ours, we do standard thirty year loans. We can do forty year loans if it's affordable housing. Typically, the spread is what you'd call your cost of funds. If someone gives you money, you pay it back at whatever rate they say. And then we add a spread to operate off of. Economic development loans are much riskier and it has a very different profile. And so spreads change based on what type of loan it is. So I don't know what Vita's spread would be on a housing loan. It may be the same as ours because housing is just a different kind of loan. We talked about ratings and we do have, we both have access to, state support through the moral obligation of the state. And, that means that, the rating agencies look at, the rating agencies look and know that the state might have a moral obligation to step in and meet the debt service if the project doesn't perform well. The HFA has $155,000,000 of moral support available to us, and we're using 47,000,000 of it. We don't use it often. And you know why? It goes back to the whole rating thing, is that that multipurpose bond indenture has the same rating as the state of Vermont. It's that good. And so the rating agencies look at the value, the credit enhancement of the moral obligation of the state, this backstop that the state offers, and says that's one step down from wherever the state is rated. So if the state's rated AA1, then the bond agencies, rating agencies will say, Okay, that's a AA2 value. Well, why would I want to use the state's moral obligation to say that this loan is AA2 when I can give it a AA1 rating without any state support? So we don't use it all that often. I believe that for economic development loans, it has much greater value and can actually add a lot more. The credit enhancement creates more of a savings. So I know the question becomes like, why not add another tool to the toolbox? And I get it. What's the harm? I don't want to shout out lovely housing developments happening in the state. But just in the last two months, I have two examples where a for profit developer came to us and said, wanna use the state's 10% for Vermont program, which is very low interest rates. And we want to use some of your appropriated dollars. And we want to build this rental housing. This was middle income housing. And in one of the situations, the rents that modeled in the pro form a, the developer's plans, would have been above what the market in that community could support. It was an extra couple $100 a month over what we saw in a market study was there. And we're like, we're not gonna give you state support for charging rents that are a $150 more than what people can get in the private market already. And the developer was very unhappy with us. They did not like this. We said, we'll keep working with you. We had a lot of hard conversations. If that person were in this chair right now, they would tell you that we were not easy to work with and all that. And yet that loan closed, and we are getting rents that are at the market. Because I'm okay with at the market. I'm just not gonna inflate the market with state support. Okay? I I'm not trying to do affordable. I'm trying to do middle income. But did you see the levels of those rents, like, 3,000? I'm just saying, like So when it says, VHFA has the right of first refusal, and if they say no, then V2P do the lending. I am nervous when I and I said this last year, I don't think I was clear enough that that's going to impact our negotiating power. Because at some point in that negotiation with the developer, the HFA was saying no. The HFA will not do every loan that comes in our door. We do need to underwrite it, not only to make sure we get paid back, but also make sure it's good for the state. So I do think that this, you have 40 some odd people at the HFA who are multifamily underwriters who have this experience. You have these bond indentures. If we use that, we don't have to use that. We can use other things. You have the ability to give us more money if you want interest rates to be lower and you wanna subsidize those rates. I'll take it. We have the ability to not use the state's moral obligation on everything we do. We will use it sometime. Don't tell the treasurer to take it away from us. We like having that tool. It it could confuse the marketplace a little bit about, like, wait. Now Vida's doing lending, and who do I go to, and what do I do? And I just wanna reiterate, like, lenders want to lend. And so there isn't a lot of limits on this. So there are so many things, and I'll wrap up here, that Vida can do that we can't do. To go back, why was I talking about the labor shortages and the lack of training and the costs and all that? These are all ideas that I've shared with VITA and all that I would love for them to do. I can't do any of this. There are great things. The training centers and the construction academy, I don't think there's state support in there, but those are both based in Northern Vermont. Could we get some kind of training facilities in Southern Vermont? Could we expand this a bit? There's so much around the off-site construction facilities. I was at Huntington Homes a couple weeks ago with my board, and they talk about how they used to have three shifts running a day, and now they only have two. There's a Fair Haven facility that used to be manufactured housing that the state is looking at how to spur that and get that back online. I don't know what it's gonna take. I just know I'm not gonna have a role in getting that going Cause we don't lend to industry in that way to support that. So there's so much. This last link to Colorado, I just wanna shout out. If you all are looking for ideas, this is a great idea that Colorado's gotten a lot of great press for. They've created over 700 homes. These two mechanisms, this grant and loan work together. And there's a link on the last slide to bring you more information. But their objectives of the program statewide were to grow small businesses and create jobs in the industry, increase the supply of affordable housing, and lower the cost of housing for local governments and organizations. This is something BHFA can't and wouldn't probably do, but VITA could. And so I think this could be a great partnership in that way or just something that gets done. Everyone needs to be working on housing right now. So I also just want to end with this slide to say again, this is who we can serve now with no changes. Some of these bullet points at the very top of the slide are the biggest headlines of what VHFA is not gonna be doing anytime soon, or maybe I should say ever, at least while I'm in charge, we're not going to be serving these households. So there are some gaps here. The first one, we're probably not going to be serving households earning over 150% of median. So if Vida want to get into that, could there be an income floor there of housing over 150% of median because then BHFAs got the under 150% covered? Although I want to point out again that we cover most people and I'd be nervous about a program that actually is that high. We're never going to get into second homes. We have too many of them in the state already, second highest proportion in the nation of second homes to our primary residences. So I don't think the state should be supporting second home creation, but we won't be a part of it if you want to do more of that. We don't do private builds. Homeownership construction programs that we've done are developments where a developer is building a bunch of homes. But we had a lot of people call us up when they heard about our construction program and say, wait, I am subdividing land for my daughter. Can you finance that? Nope, we're not gonna get into that. And it's very important to us that we support the state's housing priorities. And so there are things that we're always going to do. So may, final slide may leave you with the wrong impression that we do everything else. And that is not the case. I don't want any developer or municipality or any legislator to think that VHFA is gonna approve every loan that comes to us because we're a lender and that's not the case. When rents get high enough, it doesn't need any state support. It doesn't need the moral law. It doesn't need the tax exempt financing. It doesn't even need a quasi entity to take risk off the bank's balance sheet. The bank is going to do that loan if the rents are high enough. It's going to pencil privately. So I do think that there should be a real consideration of what the state is getting and the public benefit when you have even a quasi involved in a deal. And we need to make sure that we're not potentially going in conflict with priorities and looking at what the state's getting for it. I felt a lot of time.

[Rep. Jonathan Cooper (Member)]: I do have a question. Can you

[Rep. Michael Boutin (Member)]: go back to slide 23? Okay, Joe. It says the homeownership I'm seeing 614,549 thousand. Is there 80% of homes that are sold?

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: According to the Vermont Department of Taxes, the property transfer tax data, we have every home sale. We only look at primary residences. And 80% of the homes that sold last year in Addison County were below 550,000. And in Chittenden, Franklin, Grand Isle County, we're combined because that's one area to us, we're below 614,000. And all the other counties together, we're below 528,000.

[Rep. Michael Boutin (Member)]: Okay. Yeah. So I thought it was that was the average home sale, which would be really and really concerning about our homestead rebate.

[Rep. Michael Marcotte (Chair)]: Yeah. Okay.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: And the 80% is where every county had a different percentage and my team said 80 was the average of the county. So

[Rep. Jonathan Cooper (Member)]: I was thanks very much, Ed. Presentation. I really was interested in your lender survey and also your discussion of, you know, whatever market gaps in terms of lending. And I'm wondering about manufactured home communities. And I'm not sure where those types of development fit into that market gap kind of perspective. I'm pretty sure that they're not a whole lot of new or greatly expanded communities that are being built. I don't know exactly why that is. I know there's an issue around personal property, real property, that kind of stuff. I think there are some permitting issues as well. But I'm wondering if you what you think about and, again, this is, you know, some of the most affordable housing I think we had, especially in rural Yes. Communities. Is that a market thing?

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: Yeah. So yes. We have not I can't say the year, but the state of Vermont has not created a new manufactured home community. I've heard since the eighties.

[Rep. Michael Marcotte (Chair)]: That's right.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: Okay. So, but I wasn't the source of that number, so don't know. But I think I know there hasn't been one in the twenty four years I've lived here. And so that is why is that not happening? That's a planning and zoning issue. That's the fact that communities do not want manufactured home communities. There's a stigma to them. There's a belief that the structures will deteriorate, that those are not as valuable as stick to a subdivision. And so that's not a lending market gap. That is an acceptance of that communities. 8% of our housing stock are manufactured homes. So it is a very important part of our state. And I think, believe I agree with you, that they're so affordable. We need more of these communities. So how we can incentivize towns to allow for the development of that kind of housing is very important. When you get to a financing market gap, which is what I was focused on, there hasn't been a new community in forty some odd years, so I don't know what it would take to buy the land to put in these homes. That's a development question. But when it comes to the homeowners who had lived there, it does get complicated because of what you said. Vermont has done a lot to make manufactured housing lending as akin to stick built as we can. But there's further we could go. And I believe representative has maybe a bill already introduced. Yeah. Who that is going to look to get us even further so that stick built manufactured housing are on par with each other. That's great for the secondary market for Freddie and Fannie and all that so that there can be more mortgage lending on it. At the end of the day, when you put a home in a community that is on a rented piece of land, and there's a lot of rent to it. A mortgage lender doesn't love putting a thirty year mortgage on a home that could be evicted if that rent wasn't renewed. That's a risk. But it's happening. East Rise, it's a bunch of credit unions. Several credit unions have been working with the state to do twenty year mortgages, which is pretty good. Not thirty. We want to get to thirty, but twenty year mortgages on rented lots like that. So those credit unions are filling what has been a market gap. And Kathleen Burke from the State Housing Authority and the Department of Housing Community Development could talk about their mobile home infill project program that has proven they've done over 100 homes in the last year using that model. So that is one. And the Vermont Community Foundation is looking at what else needs to happen to support lending on homes in Park communities. But that's a homeownership mortgage model. And I believe VIDA's statute expansion is limiting them to multifamily rental housing. So that wouldn't be solved by that. Oh, not necessarily. So it's home ownership. I'm sorry, I misunderstood. Yep. So we're getting into mortgage lending, though, on the homes. There's two things you need to finance. You need to finance the buying of the land to put in the manufactured home community, the park. And then you'd need each of the buyers to finance their homes. And so credit unions are doing the mortgages and lots of people do the mortgages and the land. There's lots of options. Haven't been asked again, there hasn't been a new community in so many years that we haven't looked at a pro form a that I could say, would we do it or not? I don't have an example to look at, but there's no reason we couldn't. Again, statute's wide open for us to support that kind of thing. We already do other types of housing development, Like Stone Crop in Middlebury, we're putting in 26 homes and manufactured homes. It wouldn't be the kind of community you're talking. It's not a mobile home park looking type facility, but that is Huntington homes, manufactured homes. We financed 26 homes there through our middle income program, and those are being put in Middlebury in a new town center area.

[Rep. Jonathan Cooper (Member)]: I

[Rep. Michael Boutin (Member)]: just have a question because my understanding is anytime you purchase a property of five plus units, and I'm real estate agent, so I've seen this, it no longer is considered a mortgage. It's now considered a commercial loan. Am I wrong on that? Am I misinformed?

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: I don't think so. Okay.

[Rep. Michael Boutin (Member)]: I just wanted to make sure.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: Yeah, our financing right now, we do duplexes and we're exploring. I'd like to start offering up to four plexes because the state's homes for all program is really promoting this missing middle type of housing of duplex through quads. They may go up to sixes. Anyway, so I wanna because they're pushing that as a priority, I wanna match that with our mortgage options. But when you get over five units, yeah, I don't know that that would Freddie and Fannie and all that have limits that they wouldn't come in and consider that mortgage at that point. So

[Rep. Edye Graning (Vice Chair)]: I'm just curious because I'm not sure I got this information, but maybe it was in your presentation. Are there affordable loans that we aren't able to be provided? Is there a wait list for folks who are looking for these loans? Or are the developers finding that they just can't make it work because it's so expensive to build right now?

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: There's an unlimited amount of dollars to be lent out. I can go to Wall Street as often as I want and borrow more money. So, that's an unlimited resource.

[Rep. Edye Graning (Vice Chair)]: But you don't have a wait list of folks trying to build affordable.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: No. But do they all, does the math all work? Let's say that I tell someone I can get unlimited money at 6% interest for the next thirty years. Well, when they put 6% into their Excel spreadsheet and they say what their rents are or their sales price or whatever, and the cost of construction and the permits and the zoning and the delays and the whatever, and they put 6% in there, they may end up with a negative number at the bottom. That's when I say the project doesn't pencil. So they then if you've ever played with Excel, if you're a nerd like me, you do a solve for. Well, then what interest rate do I need to get? Well, I need a 4% interest rate in order for this to pencil. Okay, well, how do we get them a 4% interest rate? Well, then we need to use that tax exempt funding to get them that lower interest rate. And now I turn back to them and I say, you got to make a few of these affordable in order to get that cheaper interest rate. There are if someone does the solve for and they say they need a 4% interest rate or 2% interest rate right now, then, yeah, my answer is no, because I don't have access to 24% money, except when the treasurer gives it to us. Now the LIAC, the 10% for Vermont money, is really cheap money. So we have $56,000,000 Well, we're turning back a couple million of it. But we've over $50,000,000 of that money. And we're passing that low interest rate on to affordable housing projects and not so affordable housing projects. They're called priority economic development projects. We took a big slog of the money we got and said a lot of it needs to be for affordable housing and a big chunk of it needs to be for these market rate housing because we don't wanna create a donut hole and a gap. But that will only go up to the market rate rents. We won't inflate the rents. So

[Rep. Edye Graning (Vice Chair)]: then, following just one of the arguments that is regularly made is that we need housing at all levels in Vermont to meet. And if we build more housing that is whatever cost it is, people will move there, and the house that they're moving from is going to be more affordable for everyone. So who has the market study on what's available at what price point so that we can see if that is anecdotal or data driven? How do we understand that and what the real need is in the state for? Again, housing is down the hall, not us here. There's

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: not one market study that does it. We do get market studies for every project we get. It's a requirement, just like an appraisal. And so we need to make sure that there is a market there. But when you make an award and you build a housing or you offer something, you will never know who's going to buy it or move into it. And so the Middlebury project I talked about, brand new construction. I've been shocked at how many out of staters are buying those homes. And they are older households who are selling their home and moving to Vermont. And that is a great thing. More taxpayers, more people to help share the health care costs, and all this. And these folks have come with tremendous assets because they just sold their home in Arizona or something like that. And so middle income program though, there's this looking at it that we're looking at of like, okay, if you've earned a 6 figure income for all these years, you're now retirement age. It actually, I know these numbers are gonna startle people, but like it's normally you would have $2,000,000 in retirement assets at that point. That's middle income. But when you have 4,000,000 or $5,000,000 we do start saying, how much state support do you need? Is this really what the legislature intended when we talked about people who need that help? And is there a need? Yes, there's a need. And you know why why these households would say, actually, I do need that home is because those are some of the, first off, they're the only condos being added in Addison County, pretty much. I mean, but in Middlebury, this big development. And they're one story living. And I'm talking about elders. We do not have enough one story living in that city. So when you talk about a market study and how do we know what the need is, there's a price point that gets to it. There's also a type of home, a style. There's a where it is in the community being downtown walkable and all that versus in the hinterlands. It would be impossible to say what the market is and who's going to live where to articulate that. Where we can look is that the biggest need is at the lowest price points. Even though we need it everywhere, most of the numbers are people who earn less than 80%. And most of the people have the incomes and ages where they're renting and not owning. Now, I always, in my office, I have a mobile where you pull on one and the rest of it goes cattywampus. I have that because it's so important that if we were to do all, let's say the biggest need is rentals under 80% of median. And so that's all we did. We might oversupply that and then the homeowners are unserved. Well, then you could say, well, let's then serve the homeownership and build more there because that would free up more rentals because the first time homebuyers are moving into homeownership. Or it would free up the big old Victorian that someone's living in that could be split into a couple units owned or rented. It's all related. It's a market. And so I know I frustrate legislators when you all want clarity of if I do this, then what happens, but for whatever. But it's a market that if you build a lot in one region of the state, you're gonna impact other regions. If you build a lot of homeownership, you're gonna impact rental. If you build a lot of low income, you're gonna impact the luxury. If you build a lot of luxury, you're gonna impact rental. A lot. It's constantly moving. I hope we're building a lot. Do too.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Let's more. Thank you. Yep. We need

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: to triple what we're doing. So but again, I wanna say we need to triple what we're doing. We haven't done it all yet. You all have a a big year ahead of you. You need to be doing housing. What I'm trying to reiterate is that the problem isn't that we don't have enough loan dollars. We need cheaper loan dollars. And you're not going to get cheaper by adding a sister agency who does the same thing as us, but without the longevity and experience and things like that. If you want to subsidize my interest rates, please do. I would love that. I would love to do more lending with, in partnership with, the

[Rep. Edye Graning (Vice Chair)]: banks and credit unions. I guess my question is more toward, are developers trying to build affordable? Do we have a wait list of developers who want to build affordable? And I'm not hearing that we do.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: Oh, I do I do believe that there's a lot of deals that are sitting on the sidelines where they don't pencil yet. And so there is pent up demand in that regard. But offering them a half an interest point less interest rate is not enough to get it done. They need check, which is coming. They need more density at the local level. They need subsidy to not have a 50 basis point discount, but they need two points cheaper of a loan, which is subsidy. That's what the 10% Vermont program is doing. They need more than just regular old lending that VHA or Vater England can offer. But I want to be very clear that I think there's a lot of housing that is on the sidelines waiting to be developed That could be affordable, market rate, middle income. And it's not happening for a variety of reasons. Capacity of the workforce. That's the other one. So let's build up their workforce. They can't find the subs. They know they can't move forward on it because their team is too busy over here. So they're staging it. Well, if they like Huntington Homes or any of these. If they could have more workforce, then they could have three projects going at once. But right now, they're too small to do that.

[Rep. Michael Marcotte (Chair)]: Well, thank you. Thank you.

[Maura Collins (Executive Director, Vermont Housing Finance Agency)]: I know I went over it, and I apologize. I'll be better next time.

[Rep. Michael Marcotte (Chair)]: It was a very good presentation. Thank you. Good information, more information than we were even talking about last year. Better understanding. Thank you.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Good morning, everyone.

[Liz Gamache (CEO, Lund; United Way board member)]: Morning. Good to see you all.

[Rep. Michael Marcotte (Chair)]: Good morning.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Good morning. It's good to see you.

[Rep. Michael Marcotte (Chair)]: Thanks for joining us.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Thanks so much for having us in second day of the session. Sorry. I'm just joining

[Rep. Edye Graning (Vice Chair)]: the Zoom for my presentation. Sorry.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Should we get started? Perfect. So I want to thank you all for having me, Chair Marcotte, and the committee. For the record, my name's Emma Paradise, and I'm the incoming co director of CommonDebt Vermont. And I'm joined by a few of my colleagues here today who I want to make sure we have time to hear from. So if it's okay with the committee, I might ask that we hold questions to the end unless it's something you just need clarification on. So Common Good Vermont is a statewide program of United Way of Northwest Vermont, and we are dedicated to uniting, advocating for, and strengthening Vermont's nonprofit sector. And we support organizations in all parts of the state across all mission areas, including our 200 members. And I really appreciate the opportunity to talk with you all today about a proposal that's really about preparedness. Federal policy changes and funding uncertainty, as I'm sure you're all aware, are already affecting nonprofits across our state. And the question before us is really, do we want to allow these impacts to unfold in a fragmented, reactive way, or do we want to plan ahead, coordinate, and reduce risk to Vermonters and the state? This proposal is not about growing programs or preserving the status quo. It is about making sure that as federal conditions change, Vermont avoids service disruptions, job losses, and emergency interventions that cost more and help fewer people. It's also aligned with the recommendations made by the Treasurer's Task Force on the Federal Transition, and is described in their 2025 report. And so our proposal requests $295,665 in one time funding, and that's going to help nonprofits navigate federal funding cuts, executive orders, and policy shifts that are affecting their service delivery. It also includes 267,777 in base funding, which will help us improve nonprofit capacity, financial management, and compliance, strengthening the state's own grant making systems. And as you can see here, Common Good Vermont's members are reflective of Vermont's greater nonprofit community, but our network really expands beyond our membership. Through our convenings, we have member roundtables and close relationships, so we're really uniquely positioned to see what's happening on the ground. In recent years, challenges with state grants were elevated as a priority for nonprofits in the state, including human service organizations, child care providers, conservation groups, and more. And with the support of the legislature and in collaboration with the state, we've seen really good progress this past year in fixing those problems. And we really seek to solidify and build on this progress to strengthen state nonprofit partnerships through our base proposal. And this is really important in this moment as we are navigating so much uncertainty at the federal level. While some trends span the sector, such as resource scarcity, each nonprofit is navigating through unique situations depending on factors from their mission area, revenue streams, service population, or their organizational values. And Commington works closely with a lot of other intermediary organizations who are supporting subsector networks in areas like food, housing, arts, and human services. And while mission specific leadership is really critical, we also need to step out of our silos and work collaboratively in this moment. So one time funding for this proposal would not only support coordination and collaboration throughout the nonprofit sector, but it would also engage stakeholders across sectors, including state government, businesses, and municipalities. It would also provide technical assistance to nonprofits that's tailored to meet their own specific needs. And this could include exploring business model adaptations and revenue diversification. It could be assessing federal policy changes that are impacting their programs or planning for major swings in federal funding. And so our proposal has already been endorsed by more than 60 nonprofits who are prepared to work collaboratively and efficiently in this moment of change to ensure that the public investment in our sector will have a lasting impact. Just to zoom out for a moment why this matters to Vermont's economy. Nonprofits are often discussed only in terms of the services they provide, but they are also a major economic driver for our state. Roughly one in five Vermont workers works for a nonprofit, and these are organizations that exist in every region of our state and working in sectors that this committee cares about. So that's health care, child care, workforce development, community development, and rural infrastructure. And these nonprofits also make our communities better places to live, work, and play. Arts and culture organizations attract visitors who will spend money at local businesses. There are training programs that strengthen our workforce, and people want to live where they have access to health care, outdoor recreation, child care, and nonprofits make all of this possible. But when nonprofits struggle, the impacts show up quickly. If workers are laid off, services are reduced, and municipalities start to feel that pressure, and state agencies are often asked to step in after the fact. And what we are seeing right now is not a theoretical risk. Nonprofits are already delaying hiring. They're pausing new initiatives, and they're making contingency plans because federal funding streams they rely on are becoming less predictable and stopped in some cases. In some cases, we're already seeing program closures and layoffs. And the cost of the state of reacting to these failures after they occur is almost always higher than the cost of planning ahead. And so what is the problem that we're trying to solve here? We believe that this proposal addresses a real and widespread gap, and this conclusion is supported by the Treasurer's Task Force on the Federal Transition. The task force didn't recommend creating new programs just for the sake of it. It recommended proactive convening and coordination across sectors because the risks are shared and they're quickly evolving. Right now, nonprofits are dealing with these changes largely on their own. Some have the capacity to plan, but most do not. No single organization has visibility into how these pressures are playing out across regions or service areas. And so the gap is really not a lack of effort. The gap is the absence of a structured statewide way to identify shared risks early, compare notes, and coordinate responses before problems escalate. Without structure, Vermont risks a chaotic contraction of nonprofit capacity rather than an orderly transition that protects services and jobs. And so the first part of our proposal that looks at the short term, this is the the most important thing that this proposal delivers is practical assistance to nonprofits that are facing real and immediate disruptions. The one path funding is tied to implementing the treasurer's recommendations, but the primary piece of this is practical hands on support for approximately 100 nonprofits who are most exposed to federal funding cuts and other policy changes. And this assistance isn't theoretical. It includes helping organizations plan for major swings in federal funding or work through Medicaid related scenarios, how is that going to impact their budgets, or assess changes to housing and rental assistance programs, or obtain legal guidance when federal directives conflict with organization's mission or operations. And for many small and mid sized nonprofits, this type of expertise does not exist in house. In some cases, the most responsible outcome is not survival at all costs. The technical assistance also supports organizations that need to explore collaborations or mergers, restructuring, or even when appropriate, an orderly wind down that protects clients, workers, and public investment. That kind of planning is difficult and sensitive and essential, and it rarely happens well without outside support. Alongside this direct assistance, the proposal includes a limited number of structured task force meetings and cross sector convenings over a twelve month period. And these are designed to surface shared risks early and give policymakers the opportunity to have that information sooner. But this isn't the core piece of the work. These task force and convenings, they exist to inform and strengthen the technical assistance that would be delivered on the ground. And the core goal of all of this is not to preserve every organization necessarily. It is to ensure that nonprofit services remain stable, that transitions are managed responsibly, and that public dollars are used efficiently rather than in crisis mode. The other piece of our proposal is for longer term reoccurring funding. And the base funding request is about improving systems the state already relies on. Nonprofits that receive state grants and contracts are often navigating complex compliance reporting and financial requirements with very limited administrative capacity. When those systems fail, the consequences land on both the organization and the state. And so this base funding allows CommonGood to provide ongoing training, technical assistance, and grant readiness across the sector. And this also strengthens the state's own grant making and contracting systems, reduces the administrative burden on agencies, and lowers the risk of contract failures or service disruption. So essentially, this is an investment in efficiency and risk reduction. Common Good already works very closely with statewide partners, sector specific networks, shared services initiatives, and numerous community based organizations. We also co lead the Vermont nonprofit Legal Hub and a shared services initiative, CoLab, which is focused on back office efficiency. The issue we are trying to solve is not a lack of programs. It's really about the lack of coordination across them in a fast paced, moving federal environment. If funded, we're prepared to map existing capacity, identify overlap, and ensure that this work fills gaps rather than duplicate services. Our partners agree that the missing piece right now is coordination, not effort. And this proposal aligns closely with Vermont's priorities around affordability, economic stability and protecting Vermonters. Federal conditions suggest that the nonprofit sector will likely face retrenchment over the next several years. With proactive planning, that transition can be managed in a way that preserves essential services, protects workers, and avoids shifting larger costs onto the state later. The goal is simple, to use public dollars efficiently, reduce risk, and make sure that Vermonters continue to receive the services they rely on. So in closing, this proposal is about foresight. It gives Vermont a way to manage change deliberately rather than react to disruption after the fact. And that's what I have for me. And I really appreciate the committee's time and consideration and welcome the opportunity to provide additional information, answer questions, and work with the assistance forward. But for now, I'd like to deal to my colleagues who can provide some additional context and insights about this proposal. But I can also answer any questions if you have them now.

[Rep. Emily Carris Duncan (Member)]: And just real quick, what's your relationship to Vermont Community Foundation?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: We are funded by them and partner with them for different initiatives. Are a sponsor of our nonprofit summit, and they are one of our funders, and we collaborate with them in other ways as well. You

[Rep. Michael Boutin (Member)]: mentioned that part of the reason for this is to increase, have better coordination. What are you planning to do? What are your plans to make things better coordinated?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: So I think the nonprofit task force, which would include nonprofit leaders from different sectors and mission areas, parts of the state, who can really bring our collective experiences together, identify where those shared opportunities and challenges are, and then also collaboratively form solutions. And then the other piece being two cross sector convenings, which would bring together leaders from business, government, and municipalities to really identify how those impacts are impacting not just the nonprofit sector, but our broader communities as well. And so there would be a report that comes out of that with recommendations, but then those recommendations would really help us inform the technical assistance piece of this. I'm happy to answer more after you.

[Joan Goldstein (CEO, Vermont Economic Development Authority)]: All right.

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: Good afternoon, evening, morning, whatever time it is.

[Rep. Michael Boutin (Member)]: Afternoon somewhere.

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: It's afternoon somewhere. For the record, I'm Jesse Bridges. I'm the CEO of the United Way of Northwest Vermont. And, United Way, for those that aren't familiar, we exist at the intersection of business, nonprofit, and government, and community. Why would we stand in the middle of that crazy intersection? Because that's where change happens. None of the issues that you all are trying to solve here in the State House or that we're trying to solve out in the community or that businesses are trying to solve for themselves can be solved on their own. And I I think, you know, we heard I was listening to more testimony earlier. You know, this relates to everything from housing and the way we're approaching housing. We can't just use one solution, and we can't just rely on one organization to do all the work. It really takes all of us to do this work together. So that's really why we're here. We have been working on a lot of the issues that are addressed through this proposal for a number of years. So while the federal impact piece has really accelerated in the last year, the need for responsiveness and action, we have been working to improve how the state acts as a funder and as a grantmaker and how the nonprofit community uses those resources for a number of years. I've had conversations here and in other committees about the best way to provide some additional support to make that possible. As Emma indicated, we have a lot of nonprofits in this state and a lot of people that not only rely on nonprofits, but that work for nonprofits. It is an economic engine here in the state, and it's really an incredible piece. I think what I want to highlight too is that a lot of what we've talked about with regards to adjustments with the state grant process and the work that we're doing is not just about, and I know you hear a lot and the rest of your colleagues hear a lot more about, how do we get more resources? How do we get more money? More money, more money, more money. And what we have really been focused on is not just about how much we're funding things, but how we're doing it. There are real opportunities to do our work better here in the state. And this is across all sectors and across all sizes of organizations, and across all communities. The way in which we do our funding as a state, the way in which we do our work as nonprofits, the way in which businesses operate, can create a tremendous amount of efficiencies. That doesn't mean these are easy conversations to have. And it might mean, and we're having more and more of these conversations now, that some organizations cease to exist, that some programs merge or go away or evolve into something new and different. And I think we're really seeing much more openness to that. Some of that is out of need to survive in turbulent environment. And some of it, I think, is a natural evolution of the conversations that we've been having. Here we are in this moment where all of this is accelerating these conversations to a point where we're in real dire need of this technical assistance. We're in real dire need of enhanced coordination in the work that we're doing. Because more dollars are not going to come from the federal government. More dollars are not just going to show up from our philanthropic community. More dollars are not just going to magically show up from the state. None of the issues that we're trying to solve and that are being negatively impacted by the changes in federal policy or federal funding are things that we can state fund or philanthropically fund our way at. We have to get more efficient. We have to do things differently. We have to be willing to continue to prioritize what makes Vermont great, and the unique local nature of the way we operate, and the community nature in which we operate. The fact that our community really puts our values over profit in a lot of places. But we're going to have to make changes. And that might mean, again, people stop doing what they're doing, or they do things differently. We've seen an incredible amount of organizations coming to us over the years, and it's accelerated in the last year, for fiscal sponsorship, looking for ways to merge, looking for strategic partnerships. What I'm doing is important, but my organization might not be able to survive and continue to do it. How do we keep doing that thing? Things like suicide prevention training. Right? You may have heard that the Center for Health and Learning decided to close its doors, did not have enough funding to continue, but their YouMatter suicide prevention programming works. How do we look to do that differently? And thankfully, VAMHAR was able to come in and take that program while the other organizations ceased to exist. And they did that in a coordinated and thoughtful and proactive way. On the flip side, we've seen organizations like the Pride Center suddenly closed their doors, eliminating a vast amount of resources for vulnerable community members in a dire time. And that's from a lack of assistance and coordination that we really feel like this proposal can bring to bear. There's been a ton of work around federal response. As I mentioned, we've been doing a lot of convenings and conversations about mergers, strategic alliances. We've also done a lot of work to support executive directors and finance committees and boards in proactive planning and thinking ahead, diversifying revenue sources, thinking differently about the way in which we're approaching work and the funding streams. And again, we've been doing this work in concert with multiple sectors. So, we've been in conversation with the state and the administration on how do we improve things at the state level. And we've had a really proactive and productive conversation with my colleagues that Emma has led on behalf of nonprofits. Regional planning has been a part of it, economic development, and all these entities coming together with the state to say, how do we do this better? And one of the things we heard over and over again from the state and the people that are administering the grants at the state level, because remember, every time you push funding out, there's other levers in other places that are impacted. Every time we ask for something new, there's other levers in places that are impacted, is that we don't have enough effort into training and coordination, helping nonprofits understand how to not only seek grant funding, but manage it once they get it, and manage it well and proactively so that the dollars are going to the best possible uses. And so that enough dollars are also going to support not just that work that's happening out there, but those employees that are doing the work in those organizations. And the state's been an incredible partner in that. And what we're trying to do is make sure that their jobs are also made easier. And so through this technical assistance and through the work of the support, we would not only improve what's happening for nonprofits, but we would improve the effectiveness and the efficiency of the funding that you're already pushing out through the administration and through the state government. So I think there's a lot to love about that, that it's really mutually beneficial. No, it's not just about the nonprofits being successful. It's about the state and its resources being the most successful possible. Because our philanthropic resources, our tax resources are finite. They ultimately are finite. And we're going to do a lot to continue to make it so people can live here and continue to live here and work here. We have that bigger pool. But the reality on the ground now is that we have to move. And part of that has got to be some coordination. And there's just such an immense range within the sector that we need to be able to also strive to work on a broad level. Many of the nonprofits in this state are small, half $1,000,000 less budgets, five or less employees, but many reflective of our small business community. Remember, nonprofits are just businesses with different tax filings, operate and we see very similar kind of structures. Most of our businesses are small businesses, 50 or less. And that's really where we see a lot of this. But at the same time, we've got large nonprofit organizations, many of which the state direly relies on. Our designated agencies, our healthcare providers, many of which are, pretty much all of which are structured in a nonprofit way, and so need that additional support technical assistance. We really believe in the ability of Common Good to provide that. And I think we'll see some great things coming from.

[Rep. Edye Graning (Vice Chair)]: I can yield questions. Or

[Rep. Michael Boutin (Member)]: So I hear a lot about needing funding for technical assistance and all that stuff. Mhmm. I'm an efficiency guy. And, you know, I hear about some of these places that were closing. And a couple of things come to mind is some of these places that were closing, I'm not picking any of them out specifically, were they like overcapacity? Were they just like dealing with thousands of people? And do you have any data that you can provide us that shows the effectiveness of these programs?

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: So first, I'd say it's yes and to your first question. Many of them were serving a lot of people, but in order to try and figure out and Emma alluded to this in her conversation about this notion of it's not about trying to just survive. Right? And and glom a bunch of different programs and projects together to organization going for the sake of the organization going. What's most important to me are the services that we're providing and the people that are doing that work. And how do we support them? The organization is the vessel in which to do that. And what we saw, particularly as we had to all dive into the COVID waters and then try and come out of that in a new world order, a lot of organizations were picking and popping in pieces. And so it would expand a bit. It's still mission oriented, but it was like they were growing out instead of up. And people got out over their skis in a lot of ways. So in Burlington, for example, the Sarah Holbrook Center closed a couple of years ago. Had nothing to do with the recent federal impacts. But they were really struggling because they grew too fast. Not just because the organization was desiring to grow, but the need was such that people need childcare. People need after school care. People need these programs for our youth in our communities. It's not out of a desire to just grow for the sake of growing. But when the funding streams are disparate and they're doing this all on their own without some real assistance and support, like we do for many of our other sectors, We support our cities and towns through Vermont League of Cities and Towns to do this work. We support small businesses in a lot of different ways to do this work and give them the extra support that we know they need. Because a small business, a small nonprofit, just aren't going to have all of the resources to have the technical expertise to know, oh, well, I got to manage this differently. It's more in the case of, I saw this funding and I went after it and went to do it. So I think that that's where we're seeing that. And I think through this process, by having some funding, we have not had state funding for common good in the work in supporting nonprofits ever. And I think we will be able to provide some measures and metrics around data of how are we doing? How well are nonprofits performing? We know we're reaching a

[Rep. Edye Graning (Vice Chair)]: ton of

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: people. We know that the programs that we offer, and some my colleagues will talk about a number of the educational programs we offer, are lifting up the sector. But we have to do more. We do a lot of training around nonprofit management and fundraising and development, but those are not the only jobs in the sector. It'd be like if in the small businesses, if we only ever support bookkeeping and CEOs, some other things we need to train on. And I think that's where we can see. And we can definitely show you data in terms of people participating in programs and how that's developed. We're putting more resource into board development. We need more people to get involved in nonprofit board registration, governance. It's kind of the same people that do it across the state all the time. You see the same names. And we need to diversify that, not just for the sake of getting the next generation, not just age, but getting other perspectives in leadership so that they can help us to measure how are we doing? How are we providing this the most effective way that we can? We made a decision as a state to push all of our mental health care out to our designated agencies many decades ago, right, as part of the social contract. How well are we doing with that? Would it be better if we did it in a different way? The State House is having a massive discussion right now around how do we do schools? Are our measurables working? And is it the structure that's getting in the way of how well we're educating and how much it's costing? We're having the same conversation in healthcare, right? Around how well I just finished my term as the chair of the medical center board, UVMMC Medical Board. I'm really proud. Steve Loeffler is now taking the helm at the health network, and we're making some huge changes, not just to how we deliver, but the structure. How do you do that? Well, you get support and assistance and partnership, and then we can measure those things as we move forward.

[Rep. Edye Graning (Vice Chair)]: Other questions? Go ahead, Emily.

[Rep. Emily Carris Duncan (Member)]: So grant management, given that she, I'm guessing the funding stacks have gone from pancakes to grapes.

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: It's really good, I like that one.

[Rep. Emily Carris Duncan (Member)]: I've been a nonprofit for many years, and grant management is one of the biggest hurdles. Are you designing programs to help with that grant management? Are you helping your members also think about the proposals that they're making and how they can collaborate? Yes.

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: Yeah. And I think that's part of the evolution of this assistance, is it's not just what are you applying for? I've talked to nonprofits for years that will apply for a grant, and then they'll come to us and talk about, well, we won this grant. This happened, if you recall, the CDC pushed a ton of money through at the end of COVID, like $20,000,000 in the state. And everybody's scrambling to figure out how they're going to spend those dollars. And I had an organization come to me that was doing health equity work in the community, and particularly focused on vulnerable populations. And they came in and said, won this grant to go do all this work, to host these convenings and bring people together. But we really need some help with finding some funding to support to pay our staff. And I said, well, what the heck was in your grant proposal? Who's gonna do the work? How do do that? Changing this notion of thinking around when you apply for a grant, not putting overhead to support the functioning of the organization is somehow going to make you more effective in delivering the impacts to the grant. There's no way to do it. No business does that. Puts no money into overhead and expects to have good results. Construction companies, if they don't repurpose their machinery, if they're not training their employees, if they don't have HR and finance, they don't build anything. And so it's that type of training and development that we've been able to push through our education, both the education and the technical assistance side of what we're doing. At United Way, we also exist, again, at the intersection. We're a grant maker, and we receive grants ourselves. So we actually partner with the state and the department at DSU and the Department of Health around substance misuse prevention, all in Northwest Vermont and Washington Counties. Part of that has been a partnership in using our resources to make the grant making more effective, using trust based philanthropy principles to do multi year grant making, to do grant making that gives the organizations a lot more control over what they're doing, and holds the accountability relationship level. We work together. We're not just here to oversee what you're doing. We do this with our own philanthropic grant making as well. We put that money out to organizations like Lund and other organizations that know what they're doing on the ground and get rid of some of this extra hurdle. It doesn't take away accountability, and it doesn't take away compliance and internal controls. But what it does is it puts it in If they're going be successful with our funding, we can't burden them with all kinds of work that has nothing to do with that. And that's one of the things we've been working with the state on. There are reporting requirements, always. Always. What's all this extra? What is it for? What are we going to do with that data when we use it? Make it worthwhile. Make it data that's already being collected that then helps you understand the narrative, and then allows you to communicate to your colleagues here and to the people that you represent how these programs are improving their lives.

[Rep. Emily Carris Duncan (Member)]: Also, with that, do donor education, because I do find that a lot of the issue with the development of applications and things like that, and the questions around accountability and how exactly we measure it, create a ton of administrative burden. And there's also a large perception that asking for your administrative costs, your operating costs, is just simply not allowed because they'd rather just give you hard goods, they'd rather give you something that's trackable as opposed to paying your staff. And it makes it very hard to manage an organization if you can't pay

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: your staff. It makes it impossible. You can't do it. And I think you can't have people that are working to help people access affordable housing resources not be able to afford housing themselves. You just can't have people navigate health care for their community members and not have health care for themselves. It is not the values of Vermont that we would uphold. Our organization was the first organization in the state and the first United Way in the country to sign the trust based philanthropy pledge. And we've been leading and convening with funders across sectors, so community foundation, family foundations, other funders, the state, and others about the trust based philanthropy principles that I mentioned that really work break down those barriers of why we're doing the funding and how we're doing the funding in order to get the work done and understanding that the people that are doing the work are as important as the work itself to what you said earlier. And also, how do we make sure that funding in and of itself is not the barrier to getting the work done? How do we actually act as a funder that is in the true interests of the community versus our self interest as a funder? That doesn't mean as a donor right, that I can't feel good about what I'm doing or want to give to a specific cause or initiative. But it does mean that I have to pull myself out of, just like good governance, right, the day to day. Set up the structures and the policy parameters that allow our communities to go and function and operate. And that is ultimately what we think a lot of this funding does is it gives us this resource to help lift everybody up, amplify the work that's happening. Because it's one area where we actually haven't been doing the type of funding. And again, we're in a small percentage of the millions that we need to do in terms of funding, but we've got to be able to amplify that work in a lot of ways.

[Rep. Michael Boutin (Member)]: Thank you. I don't see Emma's PowerPoint presentation on our page, and that would be good to refer back to that. And I know you've been talking about the proposal, the proposed program. But is there more? Is it all in that PowerPoint or it

[Rep. Edye Graning (Vice Chair)]: would be additional information to send us?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Yes. Absolutely.

[Rep. Edye Graning (Vice Chair)]: There's a question for sorry. Yes. I can see him coming. Yes.

[Rep. Jonathan Cooper (Member)]: Good morning. So

[Pam (unidentified participant)]: I know that there's a few presenters and maybe there's more to go. One thing I'd like to flag is just to understand those 100 organizations, I think, that I saw that the program had identified or would be bringing into the technical assistance field, how they'd be identified, whether they are reflecting a balance of nonprofits by size, by industry, you know, area of mission. I just wanted to learn a little bit more about that, if that was a known quantity now or if there was a process for selecting that, and we can get to that now, or that can be something that's answered in subsequent documents and presentations, etcetera.

[Rep. Michael Marcotte (Chair)]: Thank you, Pam. We

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: don't have the specific process at this time, but we envision that it would be an application process based on factors including severity of impact, circumstances, trying to represent a range of service areas and mission areas across the board. So really prioritizing sort of a triage level, I think,

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: would probably be the way to go.

[Rep. Jonathan Cooper (Member)]: Great, thank you very much. Yeah.

[Rep. Emily Carris Duncan (Member)]: We have other presenters? Great. Do you want to?

[Rep. Edye Graning (Vice Chair)]: We have nothing after this until lunch, so we don't have a hard stop.

[Rep. Michael Marcotte (Chair)]: So I can talk forever.

[Rep. Edye Graning (Vice Chair)]: Okay,

[Connor Daley (Principal, Rutland Strategies)]: that's fine. Thank you for having me. I'll actually speak to the technical assistance piece a little bit more. For the record, my name is Connor Daley. I own Rutland Strategies, which is a nonprofit strategy consultancy in Vermont. I work with nonprofits, foundations, and community based organizations, a lot of national foundations and nonprofits, but a significant number of nonprofits here. I'm actually I've been working in nonprofits, in Vermont nonprofits since I was 15 in The Kingdom and saw kind of the transformational power of what mission driven organizations can do for a town culture, economic development, and then had stuck with it because I cared so much about it. I wanted to touch a little bit on the technical assistance piece. A colleague had asked me to talk about that. And you mentioned UBM Health earlier, Jesse. So the analogy that I think of it for this technical assistance support that we're asking for is like preventative medicine. It is cheaper and more effective to pay for a checkup. So that's strategic planning or a legal review or some type of board development to now to build a healthy immune system rather than waiting to pay for kind of emergency surgery when kind of crisis hits. And, actually, Jesse mentioned it earlier, I do sit on the executive committee of the board of the Pride Center, and that was a moment where I think this technical assistance really could have helped. I would like to note, disruption to programs or services happened physically because we did do a lot of outreach and collaboration, but that happened for lot of reasons because we had expertise at the board that otherwise we would have to pay for, and we just did not have the money. In thinking about this moment around technical assistance and what that would provide, there has been, in my experience, just an explosion of interest in mergers, acquisitions, consolidations, and asset transfers this year as nonprofits navigate a very follow a volatile policy and funding environment, especially federally. I have advised on several mergers this year, and I'll I'll provide a couple of one example in particular. But a recent survey that Common Good Vermont and the Vermont Nonprofit Legal Hub disseminated to nonprofits and lawyers about kind of legal issues they're facing or at least interested in, highlighted that mergers and consolidations, governance and compliance issues, Jesse mentioned, and employment matters are really top of mind for Vermont nonprofits. And the employment issues piece, those issues are looming because organizations continue to cut finance, HR, and development teams in particular to help save costs. So this year, over the summer, I advised on the merger between Big Brothers Big Sisters of New Hampshire and Big Brothers Big Sisters of Vermont, two very different organizations. But the Vermont chapter, they called them agencies, was struggling financially for many, many years and had a formal partnership with the New Hampshire chapter. And then they recognized that structurally, financially, and for long term sustainability, it would make more sense to merge. That was quite a lot. That was two boards. One was five people. One was 19. So it was combining those two boards with very distinct identities and cultures, providing some board development, trading, executive coaching, writing a new five year strategic plan for the new organization, and developing an architecture for new funding mechanisms, specifically around donor advised funds. But that merger and consolidation was only possible because the organization received a very rare one time private gift to cover the costs of my technical assistance, which otherwise it looks like they would not have been able to do. And so that when we talk about this technical assistance work, we're not just talking about strategic planning or a legal review, and it's not just ten hours of lawyer time. It's really thinking of what do these different organizations need in this moment for technical assistance or capacity building so that they can continue to be much more sustainable in their programs, operations, or just thinking about what are their strategic options right now to be more resilient rather than continue to kick the can down the road or find themselves in a crisis moment. Big Brothers Big Sisters, in particular, there's a significant backlog in Vermont of youth, especially in rural areas, seeking mentorship and leadership development. And so without this merger and without the with the potential folding of the Vermont chapter of Big Brothers Big Sisters, there would be significantly less infrastructure in Vermont to support those children. And so now they have the resources and systems to actually invest in Vermont and are actually looking to expand deeper into kind of the Northeast Kingdom, kind of the Rutland area, and kind of St. Alden's area. And so that's one example of how technical assistance support can really support and expand the impact of these organizations as they think about their strategic options. I would like to note, when we talk about the 100 nonprofits piece, ten hours of expert support for nonprofit is actually quite a lot, and it can be really transformational. And so, the impact of this potential technical assistance support is much greater than the sum of just its individual parts, I want to note that. And I I I will say too, while human services have been hit the hardest, and we'll hear from Kenneth Lund in a minute, that by federal funding and policy shifts, a lot of the conversations right now are having across the sector, regardless of content or area of focus for these nonprofits. I was speaking to a colleague just the other day, an accountant who does a lot of work on murders and consolidations, And she shared that no humane society in Vermont has more than thirty days of cash on hand. That is that's two payroll cycles, and that was caused by several structural factors. And this moment that we're in, why we're having this conversation now too, the pandemic really exposed a lot of the structural issues in kind of the nonprofit sector and kind of this volatile funding and policy environment is really making these existential questions and conversations right now. Humane societies, for example, tend to hire people who who are very energetic but compassionate, but tend to burn out very quickly. So there is just because they have they have the emotional component of the work, and so there's high turnover, and turnover is expensive for any business, especially a nonprofit. These are small organizations that focus on service delivery and the well-being of animals, and very few have kind of a full fledged development shop. Fundraising So has been challenging. Again, the staff ball systems would probably help build capacity in their leadership or bring on a part time person to help in their development. That's just a specific example. And then post pandemic, of course, people started to give their pets back to humane societies and other shelters at unprecedented rates. The increased need without corresponding resources or stabilizing forces is putting animals at risk, much so that I know several of the communities have set up pet food banks. And so what we're looking to do is have a field wide impact and help with this technical assistance support, help these organizations be much more forward thinking, resilient, and much more efficient. Briefly, mentioned Emma mentioned the Vermont nonprofit legal hub earlier. I serve as the project lead for that with Common Good. Vermont, the the Bar Foundation, the Bar Association, Vermont Law and Graduate School, Vermont the Community Foundation, Vermont Council on Rural Development, and several other nonprofit consultants and lawyers, including some folks from DNC and SRH Law. I mentioned this because relating to the technical assistance piece because the legal hub along with the co lab initiative, which explores collaboration across Vermont nonprofits and potential shared services efficiencies between them are both programs of Common Good Vermont. And this means that this technical assistance we are seeking is not happening in a vacuum. Common Good Vermont and its partners have already been offered critical resources for organizations, but a lot of us are building kind of the infrastructure so that we can, know, to go back to the medical analogy, get patients into the doctor to see them. The building's already built, the doctors are already there. We're just being kind of the connective tissue between those two. So this technical assistance funding could be transformational, the large part, and from all the organizations that I've seen from off of every scale, but just particularly those at this very strategic inflection point of what comes next. So if there are any questions.

[Sharon Lifshus (Director of Development & Communications, Lund)]: Well, good morning, everyone. My name is Sharon Lifshus. I'm the Director of Development and Communications at Lund. So we are a member of Common Good Vermont. I think I've done almost every Common Good Vermont training. I have spent my entire career in nonprofits, and I don't want to leave the nonprofit work. But something I tell a lot of folks on my team, I work in development, is that passion isn't currency. We're working with people that are incredibly passionate about the work that they do. At Lund, what we do is we strengthen families so that children can thrive. Children are 17% of Vermont's population, but 100% of Vermont's future. So when we think about the work that we're providing, it's not just supporting children and families now, but especially in a state that has an aging population, ensuring that we have the people power we need to have economic vitality. So when I talk to donors and they ask me about what's happening in the government, what's happening with federal funds, we see that not just impacting our structure, but impacting the people that we serve. And that's really why I'm here to speak with you all today. Lund impacts 5,800 Vermonters across the state. 58 percent of those are children 18 and younger. And so when we think about some of the strain that we've seen, how this is really impacting families, there is a lot of fear, and they're looking to lend for so many more needs than ever before. And when I started this work, I was in my 30s. I had never done development work before. And one of the first things that I asked for was resources to be able to take Common Goods Development Certificate program. And through that program, I was able to learn things like, how do you build a development plan? Lund, who is a one hundred and thirty five year old agency, did not have a development and communications plan. We didn't really have a well rounded team. We now have exceeded our fundraising goals for the last five years. And our fundraising dollars are 40 percent larger than they were when I started. And I have a lot of faith in Common Good to be able to do more of that good to nonprofits around the state. The other things that I've recognized that Common Good has been able to do is bring the sector together, but also the state. Lund is a $12,000,000 over $12,500,000 agency. We employ 135 folks across the state of Vermont. 85% of our funding is state contracts in France. That is sizable. And while we are sitting in a place of privilege, I'd say for FY26 with funding, FY27, especially when it comes to Medicaid, is something that creates a lot of fear, not just for our staff, but for the people that we serve when we think about data, which I was so happy that you mentioned. When I first started at Lund, we did not have enough data to be able to do an annual report. We could actually not talk about the work that we've been doing. Lund, through assistance with Common Good, our friends at United Way, have invested dollars in the people to make sure that we have data. So I can share things with you. Of the 5,800 people we serve, 20% of those people use two or more Lund programs. So they might be accessing adoption services, they might be accessing parent child center services, as well as our clinical treatment. The challenge that we face, though, is there is a lot of reporting requirements. I know that Liz and I, our CEO, know when it's reporting season from the number of documents we have to sign, the fact that our staff members actually have to stop doing work with clients to start doing the work of just the administrative burden to be able to do that work to support people. And so I think about what we could do if we were able to work together and have stronger systems, be more efficient and effective. I actually think we'll see more of those services being able to be delivered more impactfully and more effectively. So certainly, am absolutely here as a huge supporter of Common Good. I actually serve on the advisory board and feel like we have also had a great partnership. When we see things on the ground that we need to learn more about AI and technology, you might not think that nonprofits care about that. We really do. We want to be innovative. We want to be cutting edge. And we're doing a lot more with way less. And I really feel like Common Good has been a strong partner with that and to think about what technical assistance could do, not just for Lund, but the thousands of nonprofits across the state who are working to support not just Vermonters now, but a strong future for the state of Vermont. So I'm a passionate advocate for the work that we've already been able to do with Common Good, and I think the work that this technical assistant would allow us to do. I started by saying that passion isn't currency. One of the things I've been most excited about is some of the work that Common Good has been able to do around wages. We need great people to not only work in nonprofits but stay in nonprofits. That's really what's going to make this impact. And people are leaving because, again, passion isn't currency. I know this has been something that's part of our strategic plan is how are we able to look at that report and make some decisions so that we can be competitive. We do have a lot to offer. We have people that really care about Vermont's children and families and making Vermont a stronger place. But we want to be data informed and make sure that we can be competitive. So just another way that I think this technical assistance, building on the work that Common Good is already doing, certainly will make an impact for the sector as a whole. We really care about Vermont. We want to see Vermont be successful, we want to be able to do that through collaboration, integration, and building efficiencies. It's a little bit more to just hone in on one specific example and what I think this could do for the sector as a whole. Any questions? And I didn't look at my notes once. I am so

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Any questions for me? Good morning, and thank you

[Liz Gamache (CEO, Lund; United Way board member)]: for having the us today. I'm Liz Gamache. I'm the CEO of Lund. I also am a board member of United Way. And I'm gonna do a I'm gonna aim to do a very brief wrap up because you've heard a lot of, information from, the speakers before me. But, before I do that, let me, just share a little bit with you about, my experiences in Vermont, with the nonprofit sector to give you a sense of some of the observations that I have about the sector and how important it is to the health and well-being of Vermonters. I graduated from UVM. I worked as an entrepreneur and I worked for an international corporation. But about 25 ago, I stepped into the nonprofit sector and I fell in love with passion that Sharon talked about with mission driven work, that is in service to community. Since that time, I've had the, opportunity to serve in a variety of roles and work for dozens of nonprofit organizations and municipalities. I have been, a CEO. I have been on leadership teams of a variety of different types of nonprofits, within the sector. I've been a mayor. I've been an assistant city manager in St. Albans. So I've had the municipal experience. And, I serve as a volunteer board member, on many boards, today and over many years. And what I can tell you is, a couple of things. One is we talk about this intersection that Jesse mentioned, where business, nonprofit, community, and government come together. And we wanna make sure that intersection, doesn't go away, but that it's working effectively. Right? So we wanna get the timing of the lights right. We don't want anyone waiting too long. We don't want those traffic jams and backups. So this conversation is really, in my mind about how, the state can continue to partner and support the sector so that we can do, well, efficiently, effectively with the dollars that we receive in order to deliver services. I wanted to call out one thing that I don't think came out too much in the previous conversations, which is something that I was very appreciative over the course of the last year. Through Common Good, I was a participant on a task force that met over the course of the summer and into the fall with members of state government and members of the nonprofit sector to talk about the grant processing system and how we could become more aware of the challenges and opportunities that our respective agencies faced and make improvements to make that work more effectively and efficiently. And it was a really constructive process that has led, as you heard, to some follow on work that will continue with special working groups. Again, how do we make that intersection flow? How do we understand the needs of one another so that we can be effective and efficient? I want to be mindful of time and leave time for you to ask more questions. So I think I'm going to stop right there with one final thought. With my experience over twenty five years in the nonprofit sector, I have seen, the evolution of the work that common good does. And especially in more recent years, COVID was a catalyst. Now we're faced with another catalyst, the threat of change due to shifts in government funding. And catalysts can create opportunities. They also certainly create threats. If we lose sight of opportunity and only focus on threat, I believe that's truly amiss. What you're being presented with here today is an opportunity to support the sector through an organization that has been increasing its portfolio of work and impact for the sector. As a member of the sector, I appreciate the technical assistance, the opportunities to convene, to meet with other executive directors and understand how they're dealing with the different challenges. It's a great way to share best practices. Common Good is helping us to do what we should be doing, collaborate, coordinate, and do right by Vermont and the folks that we serve. Will yield to questions. Or not. Or lunch.

[Rep. Edye Graning (Vice Chair)]: I'm just giving and making sure everybody has an opportunity. I feel a little bit concerned. I can see the need, and I can see that the need is broad. And perhaps it's because we don't have real documentation on what this program is. But it almost feels like this technical assistance program is trying to be everything for everyone in the nonprofit sector, which is part of the problem that we're having in the nonprofit sector right now, which is we're getting out over our skis, we're trying to do it right. And so I'm just curious if there's a need assessment, and if that need assessment is pointing us in a specific direction, and if maybe that's what the focus should be rather than on any technical assistance. Because if Common Good is going to And probably I'm out over my skis here, too. But I'm just thinking out loud. If Common Good is going to administer a program that is to provide technical assistance or is it just to hand out money? Handing out money is the easy part. But looking at and understanding what the business really needs and understanding if the business should be asking for this kind of assistance is going to take a lot more. And so I just want to make sure that this is a program that has been fully thought through and fully understood and can really make the difference that we need it to in a time where there isn't money to do everything for everyone.

[Liz Gamache (CEO, Lund; United Way board member)]: I'd like to hand it to Emma, but what I would love to share with you is that over the last several years on the organizations, the boards that I've served on, nearly everyone has been having some sort of a conversation about, collaboration and merger and how to go about it. And I also serve on a variety of, boards, different sized organizations. So think we are identifying specifics and honing in on areas of need. Having an organization, whether you're small or large, where you can reach out as a nonprofit and say, I'm dealing with this issue. I'm not sure where to go, how can you guide me and direct me? Is truly incredible as a resource referral. I think just about every, if not every state in the country has at least one organization that is helping to support the sector within their state. It's needed. You never know what the problem of the day might be. And so having that place to go, that connector of resources, of experiences, of cohorts, in the sector is really invaluable. So whether it's a technical assistance program or continuing to have relationships with state partners on how to administer grants more efficiently and effectively or creating opportunities for executive directors to meet monthly or creating an annual meeting of 400, was it 400 nonprofit, How many?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Oh, that's Summit.

[Liz Gamache (CEO, Lund; United Way board member)]: Yeah, 400. 400 members of the nonprofit sector to come together for learning opportunities. I do think it's not spread too wide. Think the needs have been identified and are being met. But that's for Emma to talk more about. Thank you.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: I think that's a really good question. And I think we are really in a place right now where the structures are there. Every day, Common Good is navigating inquiries from nonprofits. We have a really good sense of what is going on, what the needs are. We also have a really robust network of nonprofit consultants who we work with really closely. We have an annual consulting convening, a consultant directory. We're soon to start a nonprofit consultant roundtable as part of our membership program. And so we are not only service providers ourselves, but we have a huge network of support systems. We mentioned the nonprofit legal hub. We're building out the infrastructure through that, scaling up lawyers in areas where we're going to need to refer folks to those service areas. Same with the shared services hub. We just received a capacity grant from the UVM Leahy Institute. We have a capstone project at the UVM MPA program where students are going to be assessing nonprofit readiness and needs when it comes to sharing back office services, mergers, collaborations, consolidations. So we will have that data this summer. We are also working with our partners at the Council of Nonprofits, where we're seeing what other states are doing. We work closely with our partners in other states. Also, the nonprofit legal hub and the CoLab shared services initiative are also meta collaborating on a nonprofit help desk initiative, which will help nonprofits under be sort of like an intake desk for nonprofits to come to with their situation, and then help them determine what is the actual help they need. Is it legal assistance? Is it fundraising support? Is it strategic planning? And so that we can really make sure that when we're providing those resources, that those are the services that they need, and they're not going to be sending additional resources on something that they don't need or may not be the most impactful way for them to spend. So I think we have the structures and the expertise in place. It's really we don't have the financial resources to make that happen on a larger scale.

[Rep. Edye Graning (Vice Chair)]: Thank you. Go ahead. So

[Rep. Jonathan Cooper (Member)]: what I'm hearing is is very, very helpful. It sounds like you focused on the technical assistance part of that. One of the sort of keywords that I was picking up on from a lot of what you were saying and some other folks too, is the notion of shared services, which has some And relationship in other areas as it strikes me that shared services can cover a lot of things. Mhmm. It could cover technical assistance. It could cover a lot other other aspects of what could be shared that might lower costs as well. Not sure where I'm going on this, but I I guess I would make maybe think about, you know, how broad do you wanna think of shared services in terms of HRV, you know, whatever. Beyond just technical services, that might be a productive way to go.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Yeah. And I think shared services are really interesting because it can look so many different ways. So, you know, the area associations on aging are really interesting example. They've recently formed a separate organization that is combining their purchasing power. They're combining benefits. They're combining administrative grant management, all of this into one so that not all of they're still providing all the services and they're all independent, yet they are still seeing those cost savings, and they've done that with the support of a private funding.

[Rep. Michael Marcotte (Chair)]: Yeah. That does.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: So I think that's where that transformational piece is so critical to that shared services piece. But it could also look like there's the food hubs that are sharing production facility space, or there are others who are contracting out with larger firms so that they outsource their HR or finance capacities. And so it can look a lot of different ways. And so there's also that piece of what's the right fit for this organization or these organizations. Maybe part of the technical assistance is a group of two or three nonprofits coming to us saying, we want to explore how we can work and be more efficient and increase our impact together, but we're not sure what that looks like or how to do that. And so I think, yeah, I'm not sure if that gets clear.

[Rep. Jonathan Cooper (Member)]: It does. Thank you very much.

[Rep. Edye Graning (Vice Chair)]: I'm curious about

[Rep. Emily Carris Duncan (Member)]: smaller nonprofits, some that are emerging, getting off the ground, that might be really high touch as far as your staff's need to engage and what the discrepancy is between some of those high touch organizations and some folks that are like one that's been around and probably more self sufficient. Are you finding that And also, I've also seen situations where sometimes that flips, some of the larger organizations actually do need more resources. So I think kind of bouncing off of what Edye was saying, as far as the number that you're proposing and the amount of organizations and what that mix of organizations is, do you feel like that's going to really line up?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Yeah, I think we work with a wide range of organizations. A lot of them tend to be the mid range, so probably not fully volunteer run. A lot of them are small and mid sized teams that we work with. And the experience really does range. I think in terms of this one time funding technical assistance, the focus would be on organizations that do have probably a more established and wider reaching impact area, probably wouldn't be focusing on necessarily the new startups that are serving a very small service area necessarily, really focusing on how we can use these funds to have the broadest impact. But that's not to say that those organizations don't need support as well in this moment. I think in terms of the base funding sector capacity building proposal piece, I think one area where that could be really beneficial for smaller organizations is state grant readiness for someone receiving their first state grant. That's a big step for someone. And I think that's one area where having someone to walk them through that process and make sure that they have their financial systems in place could be really beneficial and present an opportunity to have more equitable access to state funding for those programs.

[Rep. Edye Graning (Vice Chair)]: Abbey has a question behind you. Hi.

[Rep. Abbey Duke (Member)]: More of a comment than a question, I think, which is just that I do think that I'm I'm excited to hear you talk about your focus on shared services and on mergers and acquisitions because we have I mean, the slide you had where it showed can't remember now how many was how many nonprofits we have. It's a lot. And, you know, just having that assistance so that so that these nonprofits don't go away, but they can operate towards their mission in maybe more efficient ways. I mean, in Burlington where I am, I mean, just recently, right, we saw Sarah Holbrook go out of business a couple of years ago. You know, at the time, we had three big, you know, boys and girls club type organizations all with their own independent structure and development office and everything. Now we have two. Then there's other nonprofits that like Hands is something in our neighborhood, which they were able to find their longtime leader who found a lot of these small nonprofits, there's one passionate person who starts it. And then what is the succession plan? Like, how do they what happens to that to that to those programs when they wanna retire? And so I think models and and support to help important programs transition into other nonprofits is really needed. I certainly see a need out there. And I think some of the needs you see in nonprofits is very much mirrored in what you see in for profits, which is the need that technical assistance and that succession that need as our workforce ages is how are we how is the succession of those organizations being planned for? So anyway, thank you, and it sounds like good work.

[Rep. Edye Graning (Vice Chair)]: Thank you, representative. Michael?

[Rep. Michael Boutin (Member)]: So I was just scrolling your member groups, and I see the Turning Point Center of Central Vermont, which is super awesome, People's Health and Wellness. But as I was scrolling, I saw an organization that I know has been politically active to the point where they were trying to replace school workers. And I mean, I'm not really sure I feel comfortable supporting any type of legislation that would have money going to help an organization that's politically active. And I didn't see any other, and it was a one off situation that I know of. You don't see this study helping those kinds of organizations. There is a lot of nonprofit organizations in the state of Vermont that have this facade of nonprofit, but are advocacy groups that are designed to put people into positions, and they do attack ads on candidates, which is

[Rep. Michael Marcotte (Chair)]: a real problem for me. It's usually their own thing.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: I appreciate that, and I think that nonprofit nonpartisanship is really a core pillar of our sector's values. And when I say nonprofits, I'm talking about five zero one(three)s, which is a different designation than five zero one(four)s, which do have the ability to endorse different candidates and engage in electoral politics. And so this proposal would focus on the five zero one c three's, which are nonpartisan by reform. Which and I don't I don't fully understand how it works, but they have both sides by

[Rep. Michael Boutin (Member)]: the way. There's two specific organizations that I'm thinking of that have that set up, they have the nonprofit, but you know that one mixes. It just, it's funding the same people, right? So I'm just concerned that,

[Rep. Edye Graning (Vice Chair)]: yeah. I

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: hear it, I hear it.

[Rep. Michael Boutin (Member)]: Like I said, turning point of central Vermont, which helps people to get out of drug addictions. And that

[Rep. Michael Marcotte (Chair)]: Yeah.

[Rep. Michael Boutin (Member)]: I appreciate that. It does beg the question to build on that is, does common good have some sort of vetting process for this in order as a as a condition of organization that they have to be nonpartisan? And if at some point someone complains that they're becoming partisan or becoming politically active, is there a process? Is there any sort of disciplinary action or anything like that?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Are you speaking specifically about our membership? Or for our membership, we are open to all. We have private nonprofit consultants. We have business members. We have individuals who join. So there's no requirement to be a nonprofit, even to be a Common Good member. However, we yeah. So there's no vetting process. We're also not a formal membership organization. They don't have voting power or anything like that. It's primarily an exchange for services that we provide and the benefits that they receive in exchange for that.

[Rep. Michael Boutin (Member)]: So in theory, somebody who was politically active could take advantage of your resources?

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: They could be a member. However, our membership is not tied to this technical assistance program that we are providing, and we would be limited to five zero one(three) organizations who are nonprofit nonpartisan.

[Jesse Bridges (CEO, United Way of Northwest Vermont)]: I can speak to that a little bit too. 501c3 designation is a federal IRS designation. So the recourse there is that you are prohibited, if you have the C3 designation, from participating in political activities. There is a specific code, I should be able to reference it, but there's a specific code in the C3, and you're being granted C3 And so you file every year, like every organization, we file taxes. We file a nine ninety tax return and it does categorize all of these types of things. So the recourse for that type of activity wouldn't be on common good organization or even the state to police or to regulate. That is an IRS regulation. There's obviously been a lot of conversation about what nonprofits should and shouldn't be doing. And there are a lot of different types of religious organizations. There's other affiliations that, whatever, chamber of commerce that are not CFIs, but they have different designations. They might have different organizations to what you're speaking about, might have multiple parts of their And those monies can't, they can't buy IRS statute mix. If you're doing, even, I'll use Emma as an example in our organization, all of her time that she spends here talking to you all about advocating for different nonprofit policies is regulated through the Secretary of State's office. So there is a lot of that regulatory process in place to police that type of activity. What we're talking about is supporting the turning points of the community. And we do this even with our funding, where it's specific to who we fund and how we fund. We're not funding C4s, we're not funding super PACs, we're not funding these kind of ancillary pieces. The primary responsibility is how are we governing, how are we functioning, how's finance and HR operating, and as those questions come in and we're referring them to the excellent consultants we have or providing technical assistance directly, we would be able to weed that out, any of that type of stuff where it's like, well, you're actually asking for something that's outside of the scope of what a C3 is doing, and that's a very different consultancy that you should be seeking.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Yeah, and when we're looking at technical assistance, we're looking at what is the benefit to the broader community? How are these organizations serving our communities? And so I think a policy organization probably would not rise to the top in this particular instance. Right. And I guess,

[Rep. Michael Boutin (Member)]: you mentioned churches, right? Like if a church, if churches were shut down their tax exempt status for making comments about politicians, right? But I know organizations, strong nonprofit organizations in the state of Vermont that do advocacy all the time and they have this arm of the five zero three

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: five zero six, And

[Rep. Michael Boutin (Member)]: they have the other side of it as well. You know, it's just my concern is that we're helping those type of organizations. I have huge dislike for organizations that are nonprofits that are endorsing candidates. They shouldn't be, especially if it's my money. Sorry.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: No, I think that's very fair. And I think we're very open to what that vetting process might look like, whether it's including partners at the state or an advisory committee or something to that effect that would ensure bipartisan nonpartisanship.

[Rep. Emily Carris Duncan (Member)]: Is it also just my understanding that part of your goal is just to establish and teach best practices for nonprofits and donors in Vermont so that

[Rep. Jonathan Cooper (Member)]: we can have a more equitable, better functioning ecosystem? Yes.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: Love your bag.

[Rep. Emily Carris Duncan (Member)]: I want Belgian waffles. I

[Rep. Edye Graning (Vice Chair)]: don't see any more questions. We appreciate your presentations, and we look forward to seeing more as we get this is for budget '27, look forward to seeing more of it. I really

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: appreciate it. And I will send the slides as well, as we have a one pager that really outlines this proposal

[Rep. Jonathan Cooper (Member)]: a little more clearly, too.

[Emma Paradise (Incoming Co‑Director, Common Good Vermont)]: So thank you, everyone. Thank you. Have a great lunch.

[Rep. Edye Graning (Vice Chair)]: Committee, we're back on at one We only have an hour with Department of Labor, so we can all be back here at 12:55. That would be great. We can start right at one sharp, and then we have the governor at two in as well.

[Rep. Michael Boutin (Member)]: Didn't speak. You said she wants us in there at 01:45.

[Rep. Edye Graning (Vice Chair)]: Yes, we have a little less than an hour, so please be here before one so that we can start on, says the person who came in late.