The Future of Nonprofits Are At Risk
Here’s How You Can Help Nonprofits Facing Current Federal Threats
Since last fall, we’ve been sounding the alarm bells about the painful realities currently facing local nonprofits. Folks, things have the potential to get a lot worse. Nonprofits continue to face growing threats from federal actions that could limit fundraising, cut nonprofit tax endowments, and roll back DEI initiatives—especially impacting organizations serving marginalized communities. It’s estimated that 25% of local Central Texas nonprofits may be negatively impacted by these federal actions. The truth is we need your community support more than ever to help protect these vital services. But we’re not asking for money, we’re asking for your advocacy.
In a virtual briefing for local nonprofit leaders on April 2—hosted by I Live Here I Give Here, Mission Capital, and Nonprofit Austin—Tiffany Carter, the Public Policy Director and Counsel of the National Council of Nonprofits, outlined the current challenges and shared advocacy strategies to help nonprofits learn how the recent Executive Orders and policies may directly and indirectly impact their services.
As part of the ongoing 2025 tax debate, proposed policies could:
Remove tax deductions
Increase taxes on nonprofit endowments
Cut essential funding for programs like Medicaid, SNAP benefits, and food banks
Additionally, recent executive orders targeting Diversity, Equity, and Inclusion (DEI) initiatives are creating confusion and concern. Federal agencies are currently reviewing or pausing financial assistance programs, impacting up to $3 trillion in funding — especially for those with DEI-related programming or are those considered “large” by federal standards. These cuts disproportionately impact individuals across lines of socioeconomic status, age, disability, race, and educational access, making it harder for under-resourced communities to survive, thrive, and be seen.
The National Council of Nonprofits has documented the executive orders affecting charitable nonprofits and are tracking their impacts on the nonprofit sector.
Over 160 lawsuits are already challenging executive orders targeting nonprofits across sectors like immigration services, public education, arts and humanities programming, and public health. Legal battles, such as National Council of Nonprofits v. OMB, show how federal orders to freeze funding have already been temporarily blocked, but the risk remains.
While some lawsuits have temporarily restored access to funding, many organizations remain stuck in limbo. A quarter of nonprofits in the United States currently receive federal funds, and, for one-third of these, that support makes up a significant portion of their annual budget. Even the 75% of nonprofits that don’t rely on federal funding are concerned, as they still serve communities in need and want to protect the broader nonprofit ecosystem. These policies could penalize an array of organizations for simply supporting the communities they’re rooted in.
The sector continues to head toward what many are calling a “nonprofit financial cliff,” as Piper Stege Nelson, Executive Director at I Live Here I Give Here, first mentioned in her December 2024 blog post, The Struggling State of Our Austin Nonprofits.
These changes directly impact charitable nonprofits and the marginalized and under-resourced communities they serve, potentially increasing competition for limited financial resources,forcing organizations to rely more heavily on donors and philanthropy.
Some people might think merely asking for more donations will help nonprofits stay afloat, but this isn’t a sustainable solution for the majority of nonprofits. Individuals are also increasingly experiencing financial hardships making it more difficult to bear the weight of giving more.
The reality is that no amount of private giving can compensate for the scale of federal funding that’s being threatened. If these policies go through, nonprofits and the people they serve will suffer.
To advocate for nonprofit priorities and ensure communities continue to receive vital services, individuals must take action. As constituents, community members and nonprofit leaders can legally advocate and lobby for nonprofit causes by contacting their elected representatives and urging them to protect charitable giving, 501(c)(3) status, and federal support to meet their community’s needs
It’s especially critical in areas like Austin, where local nonprofits are already losing millions in funding—at least $65M projected for 2025, according to a previous op-ed also written by Piper Stege Nelson and picked up by the Austin American Statesman, citing an informal study by One Voice Central Texas.
To protect vital services, we are asking YOU, our community members, to take action now by contacting elected officials and advocating for nonprofit priorities — especially with the goal of finalizing these bills before Easter
And we’re going to make it VERY EASY for you to help:
Step 1: Visit The Texas Tribune’s Elected Official Directory to find your elected members of Congress.
Step 2: Call or email their office. We have a script for you here!
Step 3: Tell your friends and family to do the same.
Let’s build the kind of community we all want to live in—together. And thank you for supporting the local nonprofits that you love.