#051: From Crisis to Sustainability: Reforming Human Services Contracting in Washington State

In 2024, the Department of Commerce contracted with Atrómitos to answer a critical question: are the contracting structures in Washington state sustainable for human service providers? The findings of that nine-month study are sobering, and today’s episode of the Atrómitos Way is a deep dive into not just the contents of the report, but the wider implications for communities and a potential path forward for human service providers of Washington state.

Michealle Gady, Founder, President & CEO of Atrómitos, LLC, is a policy strategist with over 20 years of experience driving systemic change in health equity, social justice, and community empowerment.

Michaela Kay is a CPA who serves as the practice leader for the BDO Seattle office, focusing on single audits, program specific audits, and financial statements audits for those in the life sciences, social services and housing industries. Her two years working for World Vision as a lead senior accountant provide her with the ability to understand and relate to her clients on a practical level.

Jacob Ferrari is a partner at The Apex Law Group, PLLC. His primary practice works with nonprofits at every growth stage including formation, application for tax exemption, board governance, and corporate exit plans. He regularly speaks and serves on committees effecting the nonprofit community and works to better the nonprofit regulatory environment. Jacob’s goal is to care for his clients as much as his clients care for the community around them.

Key Takeaways

Financial crisis: Cost-based reimbursement, inadequate indirect cost rates, and delayed payments create a "starvation cycle" that prevents providers from investing in staff, infrastructure, or building financial reserves.

Structural barriers: Complex applications, inconsistent requirements across agencies, limited negotiation opportunities, and extensive compliance burdens disproportionately impact smaller, community-based organizations.

Human impact: These systemic issues result in high staff turnover, barriers for "by-and-for" organizations serving marginalized communities, and the risk that qualified providers cannot afford to contract with the state despite clear community need.

The full report is available on the Washington State Department of Commerce w

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