As the federal government cuts funding, nonprofits are turning to cities
Dive Brief:
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One-third of U.S. nonprofits had some type of government funding disruption in 2025, and those disruptions are changing the nonprofit financial landscape, said Hannah Martin, policy associate at the Urban Institute’s Center on Nonprofits and Philanthropy, during an Urban Institute panel about the rapidly evolving relationship between government and nonprofits.
- The Nonprofit Finance Fund’s 2025 State of the Nonprofit Sector Survey found that 84% of respondents expect future cuts to their funding, said panelist Jennifer Talansky, NFF’s vice president of marketing and communications. A 2025 Center for Effective Philanthropy survey found that 34% of nonprofits have experienced or anticipate a funding loss from the federal government and 29% from state and local government.
- In response, many nonprofits plan to lobby local governments for funding to replace lost federal dollars. “This is a hard time, and we’re seeing a range of responses,” Talansky said, including “more organizations going to state and local governments and having open conversations and advocating for their needs.”