US Nonprofits Face Widespread Funding Disruptions as Government Support Dries Up
As the US government continues to face budget constraints and economic uncertainty, many of its non-profit service providers are being severely impacted. According to a recent survey conducted by researchers at Urban Institute, nearly one-third of these organizations experienced disruptions in their government funding between January and June 2025.
The nonprofits themselves offer a range of essential services, including food pantries, job training programs, mental health services, and disaster relief. However, with government support making up approximately 20% of their revenue, the sudden loss of this funding can be devastating. The survey found that 21% of non-profits lost a grant or contract, while another 27% faced delays or funding freezes.
The effects on these organizations are far-reaching. Some were forced to scale back their services, with nearly 29% reducing staff and about 21% serving fewer people by the end of 2025. Non-profit leaders reported expecting further layoffs in the coming months.
These disruptions come as non-profits have already been facing financial pressure due to economic factors and decreased government funding since the COVID-19 pandemic. In a previous survey conducted in the fall of 2024, more than half of non-profit leaders expressed concern about their organization's finances.
The impact on these organizations is significant because they often rely heavily on government support. For example, about one-fifth of service-oriented non-profits received more than half of their revenue from government grants and contracts in 2023.
While philanthropy may try to fill the gap left by government funding, it is unlikely to be sufficient. The survey found that non-profits obtain less than half of their total revenue from foundations and individual donations, leaving them heavily reliant on government support.
The full extent of these disruptions will not become clear until 2026 or later, as the effects of the ongoing government shutdown compound existing funding cuts. Future surveys aim to provide a more comprehensive picture of how government funding cuts are impacting non-profit organizations' budgets and programs.
As the US government continues to face budget constraints and economic uncertainty, many of its non-profit service providers are being severely impacted. According to a recent survey conducted by researchers at Urban Institute, nearly one-third of these organizations experienced disruptions in their government funding between January and June 2025.
The nonprofits themselves offer a range of essential services, including food pantries, job training programs, mental health services, and disaster relief. However, with government support making up approximately 20% of their revenue, the sudden loss of this funding can be devastating. The survey found that 21% of non-profits lost a grant or contract, while another 27% faced delays or funding freezes.
The effects on these organizations are far-reaching. Some were forced to scale back their services, with nearly 29% reducing staff and about 21% serving fewer people by the end of 2025. Non-profit leaders reported expecting further layoffs in the coming months.
These disruptions come as non-profits have already been facing financial pressure due to economic factors and decreased government funding since the COVID-19 pandemic. In a previous survey conducted in the fall of 2024, more than half of non-profit leaders expressed concern about their organization's finances.
The impact on these organizations is significant because they often rely heavily on government support. For example, about one-fifth of service-oriented non-profits received more than half of their revenue from government grants and contracts in 2023.
While philanthropy may try to fill the gap left by government funding, it is unlikely to be sufficient. The survey found that non-profits obtain less than half of their total revenue from foundations and individual donations, leaving them heavily reliant on government support.
The full extent of these disruptions will not become clear until 2026 or later, as the effects of the ongoing government shutdown compound existing funding cuts. Future surveys aim to provide a more comprehensive picture of how government funding cuts are impacting non-profit organizations' budgets and programs.
we rely on the government for most of our funding too, it's crazy that non-profits in the US are going through this right now 
. If we scale back our services here, I don't think they'd be able to survive 
. We need to talk to our school administration about diversifying our funding sources ASAP 
. It's like they're being hit from two sides - government funding is drying up, and people aren't donating enough money 
. Like, what's gonna happen when they have to cut back on services? That's when the real problems start happening for the ppl who need 'em most 
. And it's not like they're just any ol' business... these are orgs that provide food, jobs, and mental health support 
. Can't we do better than this? 
it's like they're being forced to choose between serving people who need help or losing staff and having to close their doors 
and honestly i think we can all agree that government support shouldn't be the only thing holding them up 
non-profits do so much more than just provide services they're like a safety net for people in need 
and now that net is being pulled away from them... i just hope the researchers can find some answers soon 
... I mean, have you ever tried to clean up after one of those? It's like they're trying to make your life more interesting 
. Anyway, back to nonprofits... it's crazy how dependent they are on government funding. I remember when I was in school, we had a group project and our teacher assigned us to raise funds for a charity 
. We ended up raising like $200, which seemed like a lot at the time! Now, it's clear that nonprofits need a lot more than that to keep going 
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this is getting crazy, like they're gonna have to get creative with fundraising and partnerships ASAP, might need to think outside the box for them to survive... non-profits are already on thin ice, can't imagine what it'd be like if they lost all that gov funding 
. Like, what's wrong with our government? Can't they see how these orgs are struggling already? 
And don't even get me started on all the layoffs and service cuts. Like, what about those people who are already struggling? Who gets hurt when these non-profits have to scale back? 
. Food pantries, job training programs, mental health services... these aren't just niceties, they're essentials 
. And it's not just the funding that's the problem, it's the uncertainty 
. I hope these orgs have a solid support system in place, 'cause gov't funding is a big part of their revenue 
. We need to keep an eye on this situation and see if philanthropy can step up to fill the gap 
.
They can't just rely on philanthropy to make up for gov't support, since it's only like half their revenue lol 
. These orgs do vital work, and losing 20% of their revenue is huge 
. The impact will only get worse if this trend continues, and it's time for policymakers to take action 
. Can't they plan for a rainy day? Or even better, make some extra cash on the side? It's not like they're the only ones who can adapt to changes in the economy 
. Philanthropy can try to fill in some gaps, but it's not enough – we need a solid gov safety net for these orgs