Over the years, I’ve worked as a consultant on numerous federal grant projects from the US Department of Agriculture and elsewhere that focused on local economic development and were granted to nonprofits serving their communities.

But since the 2024 elections, the focus of my work—and that of the small New Mexico-based consulting firm, Prospera Partners, that I lead—has shifted to help nonprofits develop strategies to sustain themselves despite federal cuts in funding and to programs that once supported their work.

The stories included here come from a community of practice of New Mexico–based nonprofits launched in early 2025, and from recent clients. And although they are inspiring, the bottom line is that the withdrawal of federal funds is harming the sector.

What Survey Data Tell Us About How Nonprofits Are Sustaining Themselves After Federal Cuts

Over the course of six months of sessions, cohort participants shared with us that they were struggling with the following issues:

  • Losing valuable AmeriCorps workers
  • Filling budget gaps resulting from the loss of federal grants
  • Cutting staff and programs due to the loss of funding from federal agencies
  • Finding that private donors were cutting back on giving because they are concerned about their investment portfolios or are overwhelmed by the amount of need
  • Experiencing the weight of the loss and worry about mass unemployment in the government and nonprofit sectors
  • Facing increasingly competitive funding from foundations, with more applications than ever before

These findings match those of larger national surveys. In recent survey results from the Center for Effective Philanthropy, 61 percent of nonprofits across the United States reported that “the current context poses moderate to significant risk” to continued operations.

The survey includes the philanthropic sector perspective, with 55 percent of foundation leader respondents reporting that the “current context has had a negative impact on their foundation’s progress toward goals,” and an 87 percent increase in demand for funding. While some foundations have increased their payouts, the philanthropic sector cannot fill the gaps left by the federal funding cuts, leaving creativity with funding as the most viable option for nonprofits to sustain themselves.

Read the full article about nonprofits addressing federal funding cuts by Vicki Pozzebon at Nonprofit Quarterly.