MEDIA CONTACT: Chloe Heskett, Center for Effective Philanthropy: chloeh@cep.org | (617) 395-4092
CAMBRIDGE, Mass., January 28 — As nonprofits face historic challenges, including sweeping cuts to federal funding and rising demand for services, a new study from the Center for Effective Philanthropy (CEP) reveals that nonprofit organizations are concerned about their ability to continue to operate and are asking for greater support from their funders.
CEP’s new, nationally representative survey of nonprofits offers insight into how organizations are faring in the “current context” — the series of events led by the U.S. federal government’s actions beginning in early 2025, including budget decisions, legislation, and executive orders — and reveals:
- 65% of nonprofit leaders report increased demand for their services in 2025.
- 69% of nonprofits report experiencing funding cuts in 2025 from at least one source, whether government, foundation, or individual giving.
- 46% of nonprofits leaders express concern that their organization will need to close or merge.
- Nearly a third of nonprofit leaders report their organization had to reduce the services they provide.
The study also reveals inequitable impacts of the changed context:
- Nonprofits led by people of color or women are slightly more likely to have lost more than 10 percent of their budget.
- Organizations led by LGBTQ+-identifying individuals are slightly more likely to have experienced funding cuts.
With the compounding impacts of greater demand and decreases in funding, 71 percent of nonprofit leaders report concern about their organization’s financial stability, and many are responding accordingly: seeking new sources of funding; dipping into reserves; cutting costs by reducing programming, staff, or staff-related costs like benefits and compensation; and more.
One nonprofit leader put it simply: “The stakes are that we might not make it as an organization.”
CEP’s study also reveals a notable perception gap between foundation and nonprofit leaders when it comes to philanthropy’s response to the current context:
- 93% of foundation leaders report their foundation has been effective in understanding the challenges their grantees are facing.
- Only 54% of nonprofit leaders agree that their funders understand the challenges they face.
- 93% of nonprofit leaders express dissatisfaction with foundations’ responses to the current context in interviews.
More than 40 percent of foundation leaders interviewed are also dissatisfied with the overall response from foundations and believe their peers could be doing more to help nonprofits and communities. In interviews, a minority — about 20 percent — of foundation leaders interviewed expressed that they do not believe foundations have much responsibility to help nonprofits navigate the current context.
More than a third of foundation leaders express a desire for greater action and urgency of response from their board of directors. One leader noted, “we’re in a very serious situation for our mission and just business as usual is not what’s called for.”
CEP will continue to study the impact of shifts in federal policies and action on both nonprofits and foundations and will continue to provide data to inform the sector in the coming year.
About CEP
The Center for Effective Philanthropy (CEP) is a nonprofit organization with a mission to provide data, feedback, programs, and insights to help individual and institutional donors improve their effectiveness. We do this work because we believe effective donors, working collaboratively and thoughtfully, can profoundly contribute to creating a better and more just world. For more information on CEP’s work, including its research, assessments, advisory services, and programming, visit www.cep.org.
CEP is a nonpartisan, tax-exempt organization under section 501(c)(3) of the Internal Revenue Code. We do not endorse, support, or oppose any political party or candidate for public office. Our research, programs, and public communications are designed to advance our mission and serve the public interest without regard to partisan considerations.
