The United States is now deep into a government shutdown that has shuttered a wide range of federally supported programs, from early-childhood education centers to environmental projects. The shutdown’s reach touches every part of the nonprofit ecosystem, piling new uncertainty onto a sector already weakened by severe funding cutbacks since the new administration took office.
In late September, Diane Yentel, president and CEO of the National Council of Nonprofits, warned about the repercussions of a government shutdown. “Without reliable access to the funding needed to cover payroll and other expenses, these organizations may have no choice but to cut back on services, reduce staff, or even close their doors,” she said. A month later, her warning has become a description of reality instead. With no end to the shutdown in sight, housing programs, hunger-relief networks, medical research grants, and arts institutions that depend on federal partnerships are sliding deeper into trouble, from which some may find it difficult to recover.
Because federal agencies cannot issue payments during a shutdown, nonprofits relying on contracts or reimbursements are cut off until Washington reopens, leaving leaders with a narrow set of options. Many are tapping emergency reserves, taking out loans, or scaling back operations, sometimes all at once.
Each day that funding stalls, the underlying uncertainty compounds, and more organizations are forced to make triage decisions that trade off their services with commitments made to staff and the community.