February 24, 2026
In 2024, the Washington State Legislature directed the Department of Commerce to examine the contracting structures for human services providers (HSPs) — the nonprofits and community organizations that deliver essential services to millions of Washingtonians.
Atrómitos Founder, President & CEO Michealle Gady, JD — who served as Lead Consultant on the Human Service Provider (HSP) Study — presented this webinar to help nonprofit leaders make sense of the findings, develop a plan of action in their own organizations right now, and add their voices to the push for real legislative reform.
The Study at a Glance
- 26 Key Informant Interviews — representing state agencies, local government, Tribal organizations, HSPs, and subject matter experts
- 51 Focus Group Participants — across all nine statewide Accountable Communities of Health (ACH) regions
- 116 Survey Responses — from 943 human service providers throughout the state
- 300+ Articles — reviewed and triangulated using six guiding research steps
Our research findings were unambiguous: the current contracting system creates significant, systemic financial and operational hardships that jeopardize the long-term sustainability of the state’s human services sector. This is not a matter of poor management — it is a structural failure that every participant in the system acknowledges. These inherent weaknesses fall into three broad categories:
- The Coverage Gap. Contracts cover only 75 percent of direct program costs on average. Indirect cost caps of up to 10 percent don’t begin to cover actual expenses, which range between 25 percent and 35 percent.
- The Reimbursement Trap. Providers deliver services while paying costs upfront, submit invoices with extensive documentation, and then wait weeks, months, or more than a year for payment.
- Administrative Burdens. About 75 percent describe the application process as overly complex. Imagine managing 50+ contracts simultaneously, each with separate reporting requirements, duplicative data entry, and disconnected systems.
Strengthen Your Organization Today
Legislative change takes time. But you don’t have to wait for the system to change before acting. These strategies can strengthen your organization’s position today.
Recognize why your organization is struggling — and why it’s not your fault. Nearly 1 in 8 organizations across the state are technically insolvent, and more than 1,160 lack basic liquidity. Without cash reserves or access to credit to adequately pay staff, the sector’s 65,000+ workforce has 30 percent turnover at a replacement cost of 25 percent to 200 percent of annual salary.
What you can do right now
- Know your full cost structure before responding to any Request for Proposal (RFP).
- Negotiate with knowledge — contract terms like indirect rates are negotiable.
- Be selective, and walk away from contracts that won’t cover your costs.
- Build relationships with state contract managers despite turnover.
How to advocate for change
The workgroup convened for this study — which included representatives of HSPs, state agencies, and subject matter experts — reached unanimous agreement on four reforms:
- Permit advance payments of up to 25 percent at contract signing.
- Ensure full indirect cost coverage.
- Require a planning year for both state agencies and contract awardees to avoid compressed timelines.
- Establish a state-funded Technical Assistance Center for providers.
These aren’t wish-list items — they are evidence-based, consensus-backed solutions.
Building collective power
One of the most striking findings of the study is that every stakeholder group — providers, state agencies, local government, Tribal organizations, and independent experts — identified the same barriers. You are pushing in the same direction as the people on the other side of the contract table. That shared understanding is the foundation for real, durable change.
Webinar Materials
Read the Full Study
Tell Your Story to Your Legislators
Your experience is evidence, and the data is there to back you up:
- Visit leg.wa.gov to find your Washington State legislators.
- Connect the study’s findings to your organization’s everyday reality.
- Develop a specific ask — a bill, a budget item, a meeting.
Please visit our Knowledge Hub for additional free resources, including blog posts, podcasts, policy briefs, and toolkits. As a women-owned, U.S. Small Business Administration certified boutique consulting firm, we have the courage to tackle health and human services’ toughest challenges and the wisdom to help providers, government agencies, advocates, and philanthropies navigate them successfully. We deliver practical public policy research and analysis, fund development and grants management, and organizational strategy and operations services based on every client’s unique needs.