The Government Shutdown’s Impact Will Continue for Nonprofits

The Nonprofit Alliance (TNPA) welcomed the end of the 43-day government shutdown on November 12, 2025, the longest shutdown in U.S. history. The funding agreement, which included a minibus and a continuing resolution (CR) through January 30, 2026, is unfortunately a band-aid on broader funding challenges and undermines Congressional authority to authorize and appropriate funding.

Government responsibilities don’t work like a light switch that can easily be turned back on. This government shutdown will have bureaucratic ramifications for the nonprofit sector for the coming weeks and months, from grant approval and processing delays to funding delivery delays that will eat into the already stretched reserves for many in the nonprofit sector. More broadly, the short-term CR also adds additional uncertainty to the remainder of Fiscal Year 2026 past January 30, 2026.

As TNPA previously raised, the government shutdown’s impact on the nonprofit sector was compounded by earlier funding slashes to the nonprofit sector. The series of funding cuts, along with future financial uncertainty from government funding sources and philanthropic organizations, hindered immediate and medium-term organizational planning for individual organizations. The Urban Institute released a new report in October, which detailed the impact of government funding cuts to the nonprofit sector, based on survey data collected earlier in 2025. The report highlighted that the impact was felt not only by organizations that accepted government funding but also by those that did not, given that additional service delivery expectations were needed to fill gaps.

While much of the focus during the government shutdown was rightly on immediate humanitarian needs, notably around food assistance and the Supplemental Nutrition Assistance Program (SNAP), it is an important time to also reiterate the scale and scope of the nonprofit sector’s contributions to our society. Some of this critical work may not be immediately visible in our daily life but they are foundational to our communities. Programs include lifesaving medical research, historical preservation, emergency disaster response, legal support services, animal welfare, visual and performing arts, health services, homeless shelter support, environmental protection, and educational training, among many other areas.

Unfounded programming questions and investigations into nonprofit activities by the White House and some Members of Congress add to the existing financial and staffing challenges for the nonprofit sector, as additional compliance investments and potential legal defense planning will likely need to be part of nonprofit organizational strategic planning. Many smaller nonprofit organizations will struggle to find funding as their budget margins are tight and difficult decisions will need to be made that will cut into planned service delivery.

The Nonprofit Alliance (TNPA) will continue to advocate for consistent government funding for the nonprofit sector as well as respect for the sector’s independence.