A deepening financial crisis is sweeping the U.S. nonprofit sector, from food banks and homeless shelters to immigrant aid groups, according to advocates and new survey data released Tuesday. The strain, driven by federal funding cuts and rising inflation, threatens services for millions of vulnerable Americans who increasingly rely on these organizations for help.
The findings come from the Center for Effective Philanthropy, which polled leaders at 380 nonprofits that receive at least some foundation funding. While the survey does not include universities or hospitals, it offers a rare window into a sector where comprehensive data is scarce. Government grants to nonprofits total at least $240 billion annually.
Sixty-six percent of surveyed organizations reported concerns about their financial stability. The share operating at a deficit has nearly doubled, rising to 39% from 22% in 2022. Meanwhile, almost three-quarters of CEOs said their organizations have seen increased demand for services, compounding the pressure.
The trend carries stark implications for the nation's most vulnerable populations. Cuts to federal programs like SNAP, or food stamps, coincide with higher inflation, pushing more people to seek help from already-strained nonprofits. If the situation worsens, gaps in essential services could widen significantly.
One cautionary note: the survey covers only a slice of the sector. Nonprofits outside foundation funding circles — or those serving rural areas — may face even graver challenges that remain unmeasured.