Giving Compass' Take:
- Elisha Smith Arrillaga discusses why the erasure of the nonprofit sector in the form of policies creating financial distress for nonprofits threatens civil society.
- What steps can you as a donor or funder take to combat attacks on the nonprofit sector?
- Search for a nonprofit focused on nonprofit infrastructure.
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Most of us can trace the best parts of our lives back to a “helper”—a coach, a mentor, or a volunteer who showed up when it mattered most. In times of trouble, as Fred Rogers famously reminded us on Mister Rogers’ Neighborhood, “Look for the helpers. You will always find people who are helping.”
Growing up in Mississippi, the presence of these helpers was woven into the very fabric of my life. My grandmother lived just around the corner from the home of Medgar Evers, a civil rights activist and the first field secretary of the NAACP in Mississippi. It was a place steeped in the gravity of history and the relentless pursuit of justice. In that environment, I learned early on that progress isn’t accidental; it’s built by people and organizations dedicated to the common good.
Today, however, that progress is under threat. A new study by the Center for Effective Philanthropy (CEP) reveals that our nation’s nonprofits are facing an unprecedented existential crisis. Since January 2025, a wave of federal funding freezes, the termination of grants by the Department of Government Efficiency (DOGE), and threats to tax-exempt status have created an atmosphere of fear and financial distress for nonprofits across the country.
The Erasure of the Nonprofit Sector: A Lifeline Under Pressure
If you think of your own life and examine moments that have left a mark, you’ll often find the fingerprints of the nonprofit sector everywhere. My own life is a map of these “helper” organizations: Girl Scouts, Habitat for Humanity, College Bound, and so many others. These organizations provided safe havens for growth that public budgets couldn’t always carry alone.
I learned early on that progress isn’t accidental; it’s built by people and organizations dedicated to the common good.
Yet, the very infrastructure that supported my youth is now being forced to make impossible choices. According to our data, 73 percent of nonprofits report an increased demand for services—levels not seen since the COVID-19 pandemic—but this time, funding is harder to obtain from both government and foundation sources. These are among the many obstacles nonprofits face today:
- Shrinking Staff: 30 percent of nonprofits have already experienced a reduction in their staff size.
- Burnout: Nearly 90 percent of nonprofit leaders report concern about their own burnout, with 46 percent saying it has “very much” been a concern.
- Financial Instability: 66 percent of leaders express deep concern about their organization’s financial stability as it becomes increasingly difficult to secure grants.
Read the full article about the erasure of the nonprofit sector by Elisha Smith Arrillaga at Nonprofit Quarterly.