With the adjournment of the General Assembly’s spring session and the fiscal year ending, scroll below to learn more about the FY26 state budget and the status of Forefront’s other state policy and advocacy priorities.

FY26 State Budget Summary

Last fall, Forefront’s public policy survey found that supporting structural budget reform was the #1 new priority among stakeholders for Forefront’s state policy work in the future. In response, Forefront’s director of policy and government affairs took on a leadership role as legislative co-chair of the Responsible Budget Coalition, and participated in weekly meetings with progressive caucus members and other budget advocates to help push for progressive revenue sources and advocate against cuts to important programs.

The General Assembly passed the FY26 budget in the wee hours on the last day of session, May 31, after facing down a large projected shortfall compared to recent years. Total appropriated spending for FY26 is $55.16 billion (see SB2510 enrolled for appropriations bill).This is marginally higher than total spending in FY25, but at the same time, the budget also contains almost $400 million in specific program cuts. Most of these cuts were achieved by eliminating Health Benefits for Immigrant Adults (HBIA), the state-funded health insurance program for undocumented immigrants aged 42-64, which was also recommended by the Governor in his original FY26 budget proposal. To partially offset the loss in health care access resulting from this program cut, federally qualified health centers (FQHCs) will receive some additional funding to help support care for this now uninsured population.

For FY26, the budget package contains some limited new sources of revenue totaling $1.16 billion (see HB2755 enrolled), with total collections for FY26 projected at $55.3 billion. The new or expanded sources of revenue include: 1) so-called “sin taxes” on vaping (45%) and online sports wagering, 2) higher (50%) Global Intangible Low-Tax Income (GILTI) tax on profits moved offshore, 3) a tax amnesty program that will allow catch-up payments for delinquent taxes between October 1, 2025 through November 15, 2025 to be made penalty-free, and 4) amendment to state law to tax sales from any corporation that does business in the state and not solely businesses with a physical presence in Illinois. To learn more about how Illinois and other states collect revenue , see this helpful Pew Research chart.

The budget implementation plan (BIMP; see HB1075 enrolled) contains other provisions that helped balance the FY26 budget, including a delay in the final payment from sales tax on motor fuel to Road Fund, a one year suspension of monthly rainy day fund transfers from the general revenue fund (GRF), and the creation of the Budget Reserve for Immediate Disbursements and Governmental Emergencies (BRIDGE) Fund, which is intended to give the Governor a source of emergency funding if needed due to federal funding cuts or unforecasted revenue declines. The BRIDGE fund will contain $100 million funded through a long list of one-time, non-General Revenue Fund (GRF) fund sweeps.

The BIMP also strengthened the Nonprofit Security Grant Program, which Forefront supports as a member of the Safeguard Illinois Communities Coalition led by Jewish United Fund. The NSGP received $7.5M for FY26 in the appropriations bill, and the BIMP restored NSGP eligibility for medical and mental health providers after such eligibility was removed last year. There is currently a $20 million NSGP-IL funding opportunity open through July 1, 2025. To learn more, visit the IEMA-OHS website, view the grant training webinar, and read a completed sample application form. For application questions or assistance, please email Tammy Porter at [email protected] or call (217) 557-4831.

Forefront expects that budget tensions will heighten in the coming years, as the state continues to face inflationary pressure, tariffs, sweeping federal cuts and tax law changes, growing caseload demands, mandatory formulaic and court-ordered spending increases, and projected declining revenue collections in some categories. Importantly, overall growth in spending in recent years, once adjusted for inflation and when factoring out increases in spending due to the evidence-based school funding formula for K-12 and state pension contributions, is only 1.92% (see analysis posted by Capitol Fax). Difficult decisions likely await down the road for both spending and revenue. Forefront will continue to advocate for structural solutions that are progressive and that protect vital services.

To learn more about the FY26 budget, register for our joint budget webinar on June 26th and review these statements from key partner organizations:

• Advance Illinois
• AIDS Foundation Chicago
• Arts Alliance Illinois
• Housing Action Illinois
• Illinois Coalition for Immigrant and Refugee Rights (ICIRR)
• Illinois Environmental Council
• Illinois Library Association
• Latino Policy Forum
• Start Early

Forefront’s Policy Team at the State Capitol in May 2025

Nonprofit Investment Pool (SB246) – PASSED

At the invitation of the State Treasurer’s Office, Forefront’s policy team played a key role in supporting the passage of SB246. Throughout FY25, we helped with strategy, provided written and oral testimony, organized witness slips form partners, and spoke with dozens of legislators about the proposal. The new program will allow 501c3 and 501c5 tax-exempt organizations to invest their own money through the State Treasurer’s Illinois Funds program, providing access to larger economies of scale than the private banking industry can provide while keeping money safe and liquid. The Treasurer’s Office introduced this bill when a food pantry wanted to invest in the Illinois Funds program, but the Treasurer did not have the statutory authority to do so on behalf of tax-exempt non-governmental organizations. After vetting the proposal with a variety of stakeholders, Forefront agreed this is a practical way to help our stakeholders manage their funds more effectively (e.g., when stacking funding sources for a capital campaign, or any other reason a money-market-like account may be needed). The target market for the program is small-to-medium sized NPOs (i.e., $1-10M. See the original press release, fact sheet, and other organizations that supported the bill. Once signed by the Governor, Forefront will partner with the Treasurer’s Office to support implementation and educate our community about how to leverage this investment opportunity.

State Treasurer Michael Frerichs and Chief Sponsor Rep. Rita Mayfield testifying in committee about SB246/HB1437 – Nonprofit Investment Pool

State Government Contracting Reform – INCREMENTAL PROGRESS

Timely state contracts and payments was the #1 and #2 most important issue identified by Forefront stakeholders in our fall 2024 policy survey, which followed a 2023 survey in which we found that organizations with the smallest budgets and serving Communities of Color are the most likely to face challenges with the State’s contracting and payment systems. In response to these findings, for the last couple years, Forefront has been dedicated to making improvements to state government contracting laws, policies, and procedures in any way possible, leveraging every tool in our toolbox, including the following:

• Coalition Building: Forefront’s director of policy and government affairs chairs a steering committee hosted by Illinois Partners for Human Service under the rubric of the Illinois Health and Human Services Coalition dedicated to navigating all of the efforts listed below for the past couple of years. The committee is comprised of both direct service providers that do business with the state and other statewide advocacy organizations. Forefront’s policy team is also participating in a national government contracting reform cohort hosted by National Council on Nonprofits, in which we learn best practices in other states and trade notes on strategy.

• Legislative Strategy: We’ve identified a strong legislative champion in Rep. Dagmara Avelar, who understands these issues as a former nonprofit sector employee. With her support, and that of Senate Sponsor Michael Halpin, we’ve engaged with legislative leadership in both chambers, including the Senate President and Speaker, as well as committee chairs. In order to make progress, achieve hearings, and move the bills, their support is vital. In order to gain leadership support, we must have good bills that reflect agreements with key players inside state government. This is an ongoing effort:
  • We drafted, introduced, and amended the Community Partner Fair Contracting Act in 2024, amended it heavily, and re-introduced it again in 2025 (see HB2746 / SB1778). This omnibus bill would make sweeping changes across the entire government contracting process, but it has encountered fierce resistance from state agencies. The bill has not been heard and have not moved.
  • We successfully negotiated a more limited agreement with the Governor’s Office of Management and Budget (GOMB) on improvements to the Government Accountability and Transparency Act (GATA). Subsequently, we introduced HB5889 / SB3983 in December 2024, which was enacted in January 2025 during lame duck session after being added to another omnibus bill (HB817; see Fact Sheet). This was the first update to GATA since its creation over ten years ago.
  • In the spring of 2025, Forefront actively supported the Secretary of State’s Court of Claims Modernization Bill (HB1576), which passed in May 2025 and awaits the Governor’s signature. Effective 1/1/26, those filing claims may pay fees and file claims electronically and may participate in hearings remotely with judge’s permission. These small but meaningful changes will help make a convoluted Court of Claims process more efficient for all parties (see Fact Sheet).

• Ongoing Negotiations: Since early 2024, Forefront has led in-depth negotiation meetings with the State Comptroller, Attorney General, Secretary of State, Governor’s Office, multiple state grantmaking agencies, and other stakeholders. This work will continue in FY26. These talks, while difficult, have established better lines of communication, deeper understanding of one another’s’ work and challenges in the field, joint training opportunities, and specific areas of agreement and disagreement that help chart a path forward.

• Stakeholder Education: Beginning in 2023, Forefront has hosted an annual, free, online, statewide GATA-readiness training in partnership with Illinois Partners for Human Service, at which stakeholders may learn directly from staff at GOMB’s Government Accountability and Transparency Unit (GATU), which oversees all state grants and contracts subject to GATA. The next GATA training is July 17, 2025; register here. We have also urged state offices to create video tutorials or other tools that will help stakeholders get the technical assistance they need. Finally, we continuously educate private funders about the challenges experienced in government contracting to encourage them to be sensitive to, and supportive of, their grantees that are struggling with cash flow challenges.

• Private Sector Solutions: Forefront is working with private funders and the private banking industry to explore solutions that will help mitigate the impact of delayed government payments, such as low- or no-interest loans. Implementing such tools will take time, and we recognize that there is no private-sector solution that can address the challenges of delayed government payments at scale. But Forefront supports efforts to find practical tools where they are available.

• Administrative Solutions: Through this work, we’ve cultivated better relationships with a variety of key state officials and personnel, including folks at GOMB that are willing to help research specific cases and problems when we refer them. GOMB has also updated their rules in the Illinois Register to make improvements. When Forefront members encounter roadblocks with government grants, contracts, and payments, notify us at [email protected], and we will refer appropriately to help find solutions.

Lobbyist Registration Act Reform and Advocacy Training

Holly Ambuehl presents on Lobby Rules for Nonprofits at Illinois Court Appointed Special Advocates’ Statewide Conference in Normal, IL in April 2025

Forefront’s policy team gets more questions about lobbying and advocacy rules for nonprofits than any other issue. For years, improving the state’s Lobbyist Registration Act (LRA) and educating stakeholders about how to comply with the Act has been a top priority. For the last three years, we’ve introduced a bill that would waive the $300 lobbyist registration fee for small 501c3s and their exclusive lobbyist(s) (HB 1169 / SB1196 – see Fact Sheet). This bill has met strong resistance from the Secretary of State’s office, despite having a dedicated sponsor (Rep. Maurice West, Chair of the House Ethics and Elections Committee), bipartisan and bicameral support, and the backing of dozens of other statewide and advocacy organizations. In April, Forefront joined forces with other good government groups in sending a letter to legislative leadership asking for subject matter hearings on a variety of ethics bills, including ours. Most recently, in June, we co-signed a letter asking the Secretary of State, which enforces the LRA, to host stakeholder meetings this fall to find areas of agreement. The path ahead for this bill remains challenging. (A recent Chicago Tribune article examined the current political environment on ethics issues.) Forefront will assess the best path forward with our policy committee and ley partners in the coming months. At the same time, we will continue to offer our regular advocacy trainings for operating nonprofits (every fall) and foundations (every spring), and support member requests for individual trainings as we are able.

Holly Ambuehl gives an update on what’s at stake for nonprofits at Arts Alliance Illinois’ Lobby Day Breakfast for 200 arts advocates in Springfield in May 2025

Illinois Gives Tax Credit Implementation

On January 1, 2025, the Illinois Gives Tax Credit program went into effect, after passing in late FY24. Leading up to the effective date, and since, Forefront worked closely with Illinois Department of Revenue, the Alliance of Illinois Community Foundations, and other stakeholders to help implement the program, advise administrative rulemaking, and ensure necessary cleanup language was included in the FY26 revenue omnibus (see HB2755 enrolled). This program offers a historic opportunity to drive resources into causes and organizations you care about but making a tax credit eligible contributions to a non-DAF endowment at your local community foundations. Donors and nonprofits that want to learn how to participate should contact their local community foundation. Visit Forefront’s Illinois Gives landing page for more details.

Charity Reporting Requirements

At the beginning of FY25, new nonprofit audit requirements went into place, and Forefront helped educate stakeholders about the changes (see implementation guide). Through this work, and through the contracting reform efforts explained above, we’ve strengthened ties to the IL Attorney General’s office. In spring 2025, we supported SB1599 through witness slips and written testimony, which would have amended the Solicitation for Charity Act and the Charitable Trust Act to require the Attorney General to accept required annual reports electronically by 1/1/26, making the reporting process more efficient for public charities in Illinois when filing annual financial review/audit and annual registration reports. The AG opposed this bill, and so it did not pass; typically, state officials are wary of new mandates. However, the AG team indicated that they are planning to launch a new online filing process soon, and once it’s ready, Forefront will partner with them to help educate stakeholders about how to use the new system.

Public Private Partnerships + Philanthropy Roundtable

Deputy Governor Hou, Philanthropy Roundtable Co-Chairs Gillian Darlow and Andrea Saenz, Forefront CEO Monique Jones, and Holly Ambuehl

Forefront’s strategic plan calls for strengthening public-private partnerships to help align public and private resources and scale effective work. In FY25, we continued our public-private partnership event series with an event in November featuring the Governor’s Office of Equity. Earlier in FY25, following a small group meeting among Forefront board members, key staff, and the Governor’s Office, Deputy Governor Grace Hou agreed to elevate the Philanthropy Roundtable to her new position at the Governor’s Office. Previously, the Roundtable was hosted at the Secretary level at Illinois Department of Human Services. During that time of transition, new co-Chairs were identified, including two community foundation leaders. As a result of all of this groundwork, in April 2025, an in-person Philanthropy Roundtable meeting was held in Forefront’s space at Impact House. This meeting was attended by a record number of foundations leaders overall, with increased engagement from community foundation leaders from all over the state. Forefront’s team will continue supporting the Philanthropy Roundtable behind the scenes, with DG Hou at the helm. We are thrilled to see the increased momentum.

Seventy-five Foundation leaders from around the state attend the April 2025 Philanthropy Roundtable meeting at Impact House in Chicago.