Nonprofits Face Crisis After Federal Funding Cuts

During the first 100 days of President Trump's second term, nonprofit organizations faced unprecedented challenges as the administration froze federal funding for human services and targeted large foundations over diversity, equity, and inclusion (DEI) programs, labeling them 'illegal' and 'racist.' The White House further disrupted civil society by issuing executive orders, cutting foreign aid, shutting down agencies like the U.S. Institute of Peace, and threatening the tax-exempt status of major universities unless they altered DEI initiatives and addressed campus antisemitism. These actions left nonprofit leaders 'shell-shocked' and fearful of long-term existential threats, particularly as the administration suggested that tax-exempt status could be contingent on political considerations. In response to diminishing government support, local organizations such as domestic violence shelters and food banks are expected to rely more heavily on private donors and grassroots awareness campaigns to sustain critical services. The tumultuous policy environment has amplified concerns throughout the sector, with leaders warning that politicizing nonprofit status could undermine the foundation of civil society. Amid this uncertainty, advocacy for nonprofit visibility and creative community engagement has become even more vital for survival and impact.