Nonprofits are essential partners of state and local government. They are among the first to respond after a natural disaster. They have the cultural competencies and deep community ties needed to make a public health campaign successful, demonstrating the importance of strengthening nonprofit partnerships. They connect people to the safety net, and where those supports fall short they fill the gaps, providing food assistance, supportive housing and mental health supports.

Nonprofits are also economic drivers. They are the third-largest employer in the private sector and generate revenue for local economies by bringing in government grants and private donations.

Yet at a moment when rising prices are squeezing family budgets and more people are turning to nonprofits for help, nonprofits are contending with the same “affordability crisis” as the people they serve.

State and local governments can help their constituents by supporting a healthy and vibrant nonprofit sector. Together, they can ensure that families have the supports and services they need.

Strengthening Nonprofit Partnerships: Shared Challenges

Today, nonprofits are navigating several emerging challenges as they work to fulfill their missions. Funding volatility in the wake of last year’s DOGE cuts led many nonprofits to reduce staff and programming. President Donald Trump’s budget proposed huge safety net cuts, and although Congress restored some funding, nonprofits were left uncertain about their future. The flurry of executive orders imposed new requirements on grantees and contractors, prompting nonprofits to hire lawyers and seek to mitigate risks.

Meanwhile, artificial intelligence is transforming the broader U.S. economy and the nature of work, raising important questions about how and whether nonprofits should responsibly adapt their services, strategy and infrastructure.

Like nonprofits, most states are also in a period of fiscal uncertainty as tax revenue growth slows. Further, the One Big Beautiful Bill Act made major changes to federally funded programs, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). That’s left states to shoulder more of the cost of critical supports.

Read the full article about strengthening nonprofit partnerships by Sarah Rosen Wartell at Governing.