By: John S. Morlu II, CPA
Nonprofit organizations are a big part of American life. They run food banks, help people find jobs, support early education, care for the elderly, help veterans, provide after-school programs, and much more. These groups often rely on donations and government grants to do their important work.
But now, many nonprofits across the country are having a very hard time. In 2025, changes in government rules and decisions have made it harder for them to get the money and support they need.
Let’s break it down in simple terms so we can understand what’s happening — and why it matters to everyone.
1. Government Grants Are Being Cut or Frozen
Many nonprofits receive money (called “grants”) from the federal government to help pay for their programs. In 2025, new rules have stopped or paused many of these grants.
What’s happening:
- Some agencies like AmeriCorps and USAID have had their budgets cut or are taking longer to approve grants.
- Health and education grants that used to support programs like food banks or Head Start may be reduced or removed.
Impact: According to the Chronicle of Philanthropy, over 10,000 nonprofit workers have lost their jobs in just the past two months because their programs lost funding.
2. Extra Reviews Are Causing Delays
Normally, once a grant is approved, the money is sent to the nonprofit quickly so it can be used for services. Now, some grants are being put through extra reviews that slow things down.
What this means:
Doctors, teachers, and program leaders may not get paid on time.
Some services may be delayed or canceled — like food deliveries, health visits, or housing assistance.
3. Fewer Tax Benefits for Donors
When people give money to nonprofits, they usually get a tax deduction (meaning they pay less in taxes). But in 2025, some nonprofit types are being reviewed, and there’s talk of removing tax benefits for groups that are seen as too political or don’t match new government goals.
What could happen:
- Donors may feel unsure about giving money.
- If tax benefits are taken away from some organizations, they may lose support and donations.
4. Nonprofits Are Being Asked to Change
Some nonprofits that work with the government are being asked to change how they operate — including leadership, goals, and hiring decisions. This is causing concern for nonprofit leaders who want to keep their independence and mission.
Example:
NeighborWorks America, a group that helps build affordable housing, was asked to allow a government-selected person to help run their staff. Some leaders are worried this could lead to losing control of their organization.
5. Some Programs Could Be Shut Down
There’s talk of cutting big programs like Head Start, which gives free preschool to low-income families. This program is run by more than 1,700 nonprofit and community groups across the U.S.
If shut down:
- Thousands of kids may lose access to early learning.
- Thousands of teachers and staff may lose their jobs.
- Families who rely on these services would be affected the most.
6. Community Programs Are at Risk
Groups that support housing, education, mental health, and domestic violence services are especially at risk.
These groups are often the first line of help for people in need. If they disappear, many communities — especially rural and low-income areas — will lose vital support.
7. Nonprofits Are Looking for New Ways to Survive
In response to all these changes, many nonprofits are:
- Looking for new donors and private foundations to fill funding gaps
- Cutting staff or programs to save money
- Teaming up with other nonprofits to share resources
- Asking the public to support them in local campaigns
Why This Matters to You
Even if you don’t work at or run a nonprofit, you probably benefit from one — or know someone who does.
- If you’ve ever volunteered at a shelter, you helped a nonprofit.
- If your child went to Head Start, that’s a nonprofit program.
- If your elderly neighbor gets meals delivered, that’s likely through a nonprofit.
- If your town has a food pantry, tutoring center, or low-cost clinic — those are nonprofits.
When these groups lose funding, it’s not just their problem. It’s a community problem.
What You Can Do
- Support Local Nonprofits — Donate, volunteer, or spread the word about trusted organizations in your area.
- Stay Informed — Learn about changes in government policy and how they affect your community.
Final Thought
Nonprofits aren’t just “nice to have.” They are a lifeline for millions of people. In tough times, they don’t just provide services — they provide hope. When they are under pressure, it’s up to all of us to pay attention and support them in every way we can.
Author: John S. Morlu II, CPA is the CEO & Chief Strategist of JS Morlu, a globally acclaimed public accounting and management consulting powerhouse.
Through cutting-edge technology and data-driven strategy, JS Morlu helps organizations operate with clarity, control, and compliance.
– ReckSoft (www.recksoft.com ): AI-powered reconciliation for nonprofit and donor accounting
– FinovatePro (www.finovatepro.com ): Cloud accounting for donor-driven missions
– Fixaars (www.fixaars.com ): Empowering nonprofits with maintenance and repair logistics
