"The nonprofit sector is facing severe financial strain, a consequence in large part of the multibillion-dollar hole left by the Trump administration and its campaign to suspend or claw back funding for institutions perceived as promoting a "woke" agenda. This loss in federal funding has forced many nonprofit leaders to ask hard questions about how to find new sources of funding, maintain cash flow, and simply keep the lights on."
"According to Bonterra, a software company that serves the nonprofit sector, two-thirds of large nonprofits (those with revenues over $25 million) are suffering some or significant financial impacts due to changes in federal funding. And in a report released earlier this year, the Nonprofit Finance Fund (NFF) found that 36 percent of nonprofits were operating with deficits, more than double the share in 2021. Over half (52 percent) had less than three months of cash on hand, up from 39 percent in 2021."
"While current political and economic circumstances pose challenges, they also present an opportunity for nonprofits to address systemic financial vulnerabilities, some that long predate the current administration. How to Gain Firmer Financial Footing The most pressing priority for many nonprofits is finding or growing revenue streams to make up for lost government funding. An important first step-one many nonprofits have already taken-is to systematically review an organization's operations and to assess its finances going forward."
The nonprofit sector is experiencing severe financial strain after multibillion-dollar reductions in federal funding tied to efforts to suspend or claw back support for institutions perceived as promoting a "woke" agenda. Recent data show two-thirds of large nonprofits report significant impacts from federal funding changes; 36% operate with deficits, and 52% have less than three months of cash on hand. Many nonprofits must identify new revenue sources, preserve cash flow, and cover basic operating costs. Leaders increasingly conduct systematic operational reviews and financial assessments. Current political and economic pressures also create an opportunity to address long‑standing systemic financial vulnerabilities and diversify revenue streams.
Read at Non Profit News | Nonprofit Quarterly
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