This report examines the workforce and community consequences of government funding disruptions experienced by US nonprofits 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

Government funding disruptions can affect nonprofits not only as budgetary events but also as workforce shocks that constrain their ability to serve communities.

These findings have implications for policymakers, funders, and nonprofit leaders. Policymakers should recognize that government funding disruptions can create consequences beyond the specific grant or contract involved. Philanthropic funders and donors can play a stabilizing role by providing flexible, rapid-response, and general operating support to organizations facing government funding disruptions. Nonprofit leaders can use these findings to communicate the full consequences of funding instability to boards, funders, policymakers, and communities.

What We Found

• Government funding disruptions were associated with workforce reductions. Disrupted staffed nonprofits were more likely than staffed nonprofits overall to decrease their total number of employees (30 percent versus 20 percent), freeze or reduce employee salaries (18 percent versus 12 percent), and freeze or reduce employee benefits (9 percent versus 6 percent). Disrupted staffed health nonprofits (for instance, community clinics, substance abuse prevention organizations, and crisis intervention hotlines—not hospitals, which are excluded from the study) were especially likely to decrease their total number of employees (44 percent).
• Hiring sentiment weakened for disrupted and nondisrupted nonprofits and had not rebounded as of early 2026. As of late 2024, 57 percent of staffed nonprofits planned to hire new staff in the 12 months following the survey. By early 2025, this share had dropped to 41 percent, and as of early 2026, it was 38 percent.
• Workforce reductions were associated with reductions in programs and services. Staffed nonprofits that decreased their total number of employees were more likely than staffed nonprofits overall to suspend or pause services (27 percent versus 11 percent), reduce their number of programs or services (43 percent versus 16 percent), and reduce their number of people served (30 percent versus 11 percent).
• Government funding disruptions were associated with reductions in services, programs, and people served. Disrupted nonprofits were more likely than nonprofits overall to suspend or pause services (19 percent versus 11 percent), reduce their number of programs or services (25 percent versus 16 percent), and reduce their number of people served (20 percent versus 11 percent). Most disrupted nonprofits that took these actions reported doing so in response to government funding disruptions (76, 66, and 74 percent, respectively). Disrupted health nonprofits and disrupted nonprofits with programs primarily serving individuals who receive Medicaid were especially like to suspend or pause services (24 and 28 percent, respectively).
• Program changes in 2025 show both strain and resilience. Nonprofits in 2025 were more likely to report decreases in programs and less likely to report increases than in 2024—especially disrupted nonprofits. Despite these pressures, 80 percent of all nonprofits and 69 percent of disrupted nonprofits either maintained or increased programs.
• Disrupted nonprofits were less likely than nonprofits overall to meet demand; those that did were more likely to have preserved their programs, staff, and spending. Even with many nonprofits maintaining programs, demand for their services often outstripped what they could provide. Only 45 percent of disrupted nonprofits met demand in 2025, compared with 52 percent of all nonprofits. Disrupted health nonprofits and disrupted nonprofits with programs primarily serving families or individuals with incomes below the federal poverty level, families or individuals that receive food assistance, individuals who receive Medicaid, and Black or African American people were even less likely to have met demand (32, 34, 33, 31, and 27 percent, respectively). Disrupted nonprofits that did not meet demand were also more likely than those that did meet demand to suspend or pause services, reduce programs or services, reduce the number of people served, and decrease employees.
• Demand is expected to keep growing. Sixty-eight percent of all nonprofits and 71 percent of disrupted nonprofits anticipated demand to increase in the 12 months following the survey. Disrupted nonprofits with programs primarily serving families or individuals that receive food assistance, individuals who receive Medicaid, and families or individuals with incomes below the federal poverty level were especially likely to anticipate demand to increase (80, 78, and 77 percent, respectively).

How We Did It

This report uses data from the 2024, 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.