This report examines the prevalence, persistence, and financial implications of government funding disruptions US nonprofits experienced in 2025.

Government funding disruptions include the loss of at least one government grant, contract, loan, or other government financial assistance (i.e., funding agreements canceled or committed funds pulled back); at least one delay, pause, or freeze in government grants, contracts, loans, or other government financial assistance; or receiving a notification from a government agency to stop work until further notice at any time between January 1, 2025, and December 31, 2025.

Why This Matters

Our findings underscore that government funding disruptions were not merely accounting events; they were operating shocks that introduced uncertainty and affected nonprofits’ financial stability.

These findings have implications for policymakers, funders, and nonprofit leaders. For government agencies, the findings underscore the importance of funding continuity, clear communication, and predictable administrative processes. For state and local policymakers, the findings highlight the downstream consequences of federal government funding instability. For philanthropic funders, the findings point to the value of flexible and rapid support during periods of government funding instability. For nonprofit leaders, these findings reinforce the importance of scenario planning, reserve policies, cash-flow monitoring, and revenue risk assessment, even for revenue sources that may appear to be stable, such as government funding was for many organizations before the 2025 funding disruptions.

What We Found

• Government funding disruptions were widespread in 2025. Forty-nine percent of organizations that received any government funding, or the equivalent of 35 percent of nonprofits overall, experienced at least one government funding disruption (including lost funding, delays, pauses, freezes, and stop-work orders).
• Nonprofits with programs that primarily serve people experiencing poverty and some communities of color experienced disruptions at higher rates than other organizations. While 35 percent of all nonprofits experienced government funding disruptions, 40 to 46 percent of nonprofits with programs that primarily serve individuals who receive Medicaid, foreign-born individuals and families, Hispanic or Latino people, Black or African American people, families or individuals that receive food assistance, families or individuals with incomes below the federal poverty level, and American Indian or Alaska Native people experienced them.
• Larger nonprofits were more likely to experience disruptions, but smaller nonprofits faced more severe losses when funding was cut. One in five of the smallest organizations (those with annual expenses of $50,000 to $99,999) experienced government funding disruptions, compared with 49 and 55 percent of the largest organizations (those with annual expenses of $1 million to $9.9 million and $10 million or more). However, 29 percent of the smallest organizations that lost government funding lost 50 percent or more of their revenue, compared with 6 and 16 percent of the largest organizations.
• Many delays, pauses, and freezes in government funding were long-lasting. Forty-eight percent of nonprofits that experienced delays, pauses, or freezes in government funding had at least one that lasted 12 weeks or longer.
• Disrupted nonprofits turned to available but imperfect revenue strategies. In direct response to government funding disruptions, nonprofits most commonly reported decreasing their expenses (65 percent), drawing on reserves (63 percent), increasing fundraising from charitable and philanthropic sources (63 percent), and borrowing funds or increasing lines of credit (61 percent).

How We Did It

This report uses data from the 2025 and 2026 iterations of the National Survey of Nonprofit Trends and Impacts, a nationally representative survey of US 501(c)(3) public charities with annual expenses and revenues of $50,000 or more that engage in activities ranging from direct service provision to community building and advocacy, and primarily receive rather than provide funds. It excludes organizations that usually fund nonprofits, such as foundations, as well as hospitals, higher education institutions, schools (day cares, preschools, and K–12 schools), churches and other houses of worship, mutual benefit organizations, philanthropic support organizations, and other organizations with unique business models and contexts. Organizations’ leaders, including CEOs, executive directors, or the equivalent, took the survey. The data have been weighted to account for the sample design and nonresponse to ensure national representativeness. As a result, the findings can be generalized to the categories of public charities included in the study. More information about our methodology is available at Methodology of the National Survey of Nonprofit Trends and Impacts.