Federal Cuts Disrupt Decades of Nonprofit-Government Partnership

Dawn Price signs rent checks worth about $160,000 every month for 79 people that her nonprofit helps house in Laguna Beach, California. Usually, she logs into an online portal to withdraw enough from an account funded by a grant from the federal housing agency. But in February, she couldn't. Access had been temporarily cut off for many housing organizations as part of the Trump administration’s cuts and funding freezes. These federal cuts represent a break from decades of nonprofit-government partnership and funding support.

“That was just a sea change for us for those dollars to be so immediately at risk,” said Price, the executive director of Friendship Shelter, which started in 1987 as a community organization. Access was eventually restored but the episode took a toll.

“Government moves slowly usually, and I think what was so disorienting early on was government was moving really fast,” she said, regarding the federal cuts breaking from decades of nonprofit-government partnership.

In the early days of his second term, President Donald Trump froze, cut or threatened to cut a huge range of social services programs from public safety to early childhood education to food assistance and services for refugee resettlement. Staffing cuts to federal agencies have also contributed to delays and uncertainty around future grant funds, terminating nonprofit-government partnership. Altogether, his policies are poised to upend decades of partnerships the federal government has built with nonprofits to help people in their communities.

The Rapid Dismantling of Nonprofit-Government Partnership

This vast and interconnected set of programs funded by taxpayers has been significantly dismantled in just months, nonprofit leaders, researchers and funders say. And even deeper, permanent cuts are still possible. That uncertainty from the threats to nonprofit-government partnership is also taking a toll on their staff and communities, the leaders said.

In response to questions about the cuts to grant funding and lessening of nonprofit-government partnership, White House spokesperson Kush Desai said, “Instead of government largesse that’s often riddled with corruption, waste, fraud, and abuse, the Trump administration is focused on unleashing America’s economic resurgence to fuel Americans’ individual generosity.”