New Study Highlights Impact of Trump Administration Actions on Nonprofits
A new study released today by The Center for Effective Philanthropy (CEP) reveals that nonprofit leaders report unprecedented challenges since January 2025, when the Trump administration began a series of actions targeting nonprofits. Those actions include the attempted federal funding freeze in early 2025, DOGE’s review and termination of grants, executive orders targeting specific issues and program areas, federal investigations of nonprofits, and threats to revoke their tax-exempt status, among others.
The study found a significant increase in leadership and other staff burnout, an atmosphere of fear, stress, and low morale, increasing signs of financial distress, more difficulty raising funds from both government and foundations, and, in some cases, difficult decisions to make cutbacks to programs and staff in order to keep their doors open. Most nonprofit leaders indicate that the current context poses a significant threat to their organization’s continued existence and ability to provide essential programs and services.
“Nonprofits are the backbone of communities across the country, providing food, shelter, healthcare, education, disaster relief, and countless other essential services every day,” said Diane Yentel, President and CEO of the National Council of Nonprofits. “At a time when most nonprofits report increased demand for services, this report confirms that politically motivated efforts to destabilize the sector are pushing essential organizations to the brink. Through advocacy, coalition building, public education, and legal action, the National Council of Nonprofits will continue working to protect nonprofits and strengthen the communities they serve nationwide.”
The pressures are mounting at a time when 73% of nonprofits surveyed report increased demand for their services, creating an existential crisis for nonprofits with implications for communities that depend on them.
“One year into the Trump administration’s campaign against nonprofits, these organizations are facing enormous and unprecedented pressures. This data aligns with what we’re hearing in cities across the country, where nonprofits are pausing operations, closing, or merging,” said CEP Vice President-Research and report co-author Elisha Smith Arrillaga, PhD. “This isn't happening at the margins — it's happening in cities and towns across the country, to the organizations people rely on most when they have nowhere else to turn.”
The study, “State of Nonprofits 2026: What Funders Need to Know,” is based on survey responses from 380 nonprofit leaders participating in CEP’s Nonprofit Voice Project, a nationally representative panel of U.S.-based nonprofits. The findings reveal a sector under growing strain since January 2025, with 73% of nonprofits reporting increased demand for services while also facing heightened financial instability, staffing challenges, burnout, and an atmosphere of fear and stress. Nearly 90% of nonprofit leaders expressed concern about burnout, 66% reported concerns about their organization’s financial stability, and 30% said their organizations have reduced staff size.
The report also found that nonprofits are struggling to secure funding from both government and foundations at a time of rising community need. Many organizations have already reduced services, frozen hiring, postponed raises, or drawn from reserve funds to continue operating. At the same time, nonprofits are exploring major operational changes to adapt, including pursuing new funding sources, collaborating with other organizations, sharing operations, and in some cases considering mergers. The report notes that while nonprofits faced similar increases in service demand during the pandemic, this moment differs because organizations are simultaneously experiencing reduced funding and increased political pressure.
“The current crisis facing nonprofits is unlike anything I have seen in my 25 years working in philanthropy,” said Phil Buchanan, president of CEP and author of Giving Done Right. “Nonprofits are reeling, and I hope more foundation leaders and individual donors at all levels seriously consider giving at a significantly higher than typical rate. The time to act is now.”
Read the full study, State of Nonprofits 2026: What Funders Need to Know.