Commentary: How to show up for nonprofit grantees in 2025

While challenges are not new in the nonprofit sector, organizations today are facing an onslaught of funding cuts, safety concerns for staff and community members and significant levels of staff burnout and low morale. In this environment, lots of funders find it hard to know what to do. Even if we are able to dramatically increase our grantmaking budgets, we can’t replace the billions of dollars already cut from nonprofits and universities for everything from environmental protection to violence reduction and child protection, mental health treatment, immigrant services, medical research and more. 

And we don’t know what’s coming – if we spend money now, will greater needs emerge in coming weeks and months that we then can’t address? In March, the federal government defunded legal support work for unaccompanied minors and undocumented immigrants, providing no notice to the nonprofits providing these services in New York City and elsewhere of immediate cuts in the hundreds of millions. Just last month, numerous city based arts organizations, many operating on very lean budgets, were notified by email of funds rescinded by the National Endowment for the Arts. Do we spend money now to curtail job losses and program closures, or do we wait to see whether massive cuts to AmeriCorps are allowed to stand, or whether massive cuts to Medicaid come to pass? Is this a time to “stay in our lane” and keep a disciplined focus on funding within our stated missions and priorities -- to maintain a “love the ones you’re with” approach to supporting the portfolio of nonprofits we are already partnering with – or should we adapt or expand our funding priorities to the most urgent and critical needs of the day? And what is more urgent and critical: preserving jobs, delivering services today, or investing in advocacy at a local, state or federal level to restore or preserve hundreds of millions of dollars in the longer term?

There are no certain answers, but what we do know is that nonprofits are asking to see and hear more from the funding community, reporting a “deafening silence” from philanthropy. This isn’t to say funders haven’t been showing up for their grant partners or coming together to share information and ideas. Many have, in ways they deem most viable and mission-aligned within their organizations. I am seeing funders spend time listening to grantees, increase their grantmaking budgets, invoke or create expedited processes to get funding out the door quickly to (some new and mostly) existing grant partners. Some are convening their boards to consider major amendments to their policies and priorities in light of recent changes. These are among the things nonprofit leaders are asking of us in this moment.

In March, I asked a number of nonprofit partners, “What actions can foundations take right now to help, reassure, and be a good partner to nonprofits?” Responses included:

• Move up grant timelines – pay and/or give commitments earlier in the year to alleviate the stress of uncertainty and preempt cash flow shortages
• Release current grants from any restrictions to reduce paperwork and so that the funds can support whatever the organization deems most urgent and important
• Multi-year commitments to provide stability for programs -- especially for general operating support (GOS) grants
• Offer one-time capacity building grants to help nonprofits adapt their programs and/or operational systems for current moment (e.g. staff training, data systems etc)
• Add universal "bump" in grants, such as a 10% increase for whatever the organization needs; increase grant amounts to account for cost of living increases and inflation
• Fund intermediaries -- the infrastructure they provide is essential always and especially in times like this
• Fund DEI work (coaching, organizational culture, training), including support for how to maintain inclusive programs in the current climate
• Provide spaces to come together, access information, support each other, and take action
• Offer no-interest loans to organizations facing significant delays in payments of government grants or reimbursements

More recently, field-leaders like the Grantmakers for Education Out-of-School Time Impact Group (EdFunders) and SeaChange Capital Partners (SeaChange), have developed and shared some tools, tips and recommendations for funders to consider. The EdFunders OST Impact Group helpfully put together some concrete resources for funders to consider, including this simple chart of “what funders are doing and can do,” and this Framework for Funder Response worksheet.

SeaChange’s recent report, “Retrenchment and Reconstruction: Strategies for a Sector on the Brink,” discussed in a recent piece in City & State by its managing partner, John MacIntosh, echoed many of the suggestions from nonprofit leaders above, calling on funders to bolster stability of individual nonprofits and the broader nonprofit ecosystem by:

• Expedited decision-making processes to reduce unnecessary delays in funding
• Funding special purpose vehicles such as fiscal sponsors, receivers, trustees to absorb certain nonprofit functions as needed
• New norms so that boards, nonprofit leaders and funders can act in tough-minded, empathetic, and mission-driven ways without facing the stigma of failure that is too often associated with restructurings and windows; a stigma which can make things worse by encouraging delays, denials, and magical thinking.”

These resources are helpful because, as much as we are not sitting on our hands, the clear message from our nonprofit partners is that we need to do and show up more. Not all foundations can (or should, necessarily) employ all of the strategies captured above – but some of them cost nothing and are within the discretion of foundation staff to enact, and we are hearing that every bit of listening, funding, flexibility, and expedition matter. 

Yes, philanthropies have a lot of flexibility in how to deploy the resources they steward: their decisions aren’t curtailed by voters or shareholders, their funding is there to grow and be spent, rather than needing to be used to develop or deliver a service or product. It’s important to note, however, that foundations – like all nonprofits – are governed by boards and constrained by state and federal laws as well as their own organizational missions, values, policies and priorities. Like the Constitution and balance of powers (ironically, perhaps), these codes and structures were created to slow decision-makers down from rash or biased impulses, to consider the impact of their actions and inactions, and weigh the costs and benefits of investing public dollars (which tax-deductible contributions to charitable foundations are, just as much as taxes paid to the government) in one thing over another. Foundations also often have legally binding parameters on what, how and how much they can fund that were set forth in the founders' trusts or wills that established them.

So, to our nonprofit partners, we hear you! Some of us are able to move more quickly, nimbly, boldly – others are navigating slower turning ships through denser waters of process and parameters. Please keep sharing your ideas and experiences, ask for the flexibility and funding that would help you and the communities you serve. Explain the concrete needs your organization is faced with that a small or restricted grant might alleviate as well as the need for flexible, unrestricted dollars. Pass along these resources to the funders you work with – they might help a program officer make a case to their colleagues and board to do something new and different. 

And to peer funders: as nonprofit leaders and staff are navigating the stress, strain and uncertainty of the moment, they are looking to us, their donors and grantmakers, for our creativity, solidarity, generosity and trust. Let’s continue to step up for our partners and the field, and ask ourselves and one another which of the restrictions we operate under (on what, how, or how much we fund) have any flexibility. Let’s facilitate the flow of resources to where they can do good, not holding back on giving small grants that can make a real difference just because there are much bigger funding needs out there too. Let’s speak a little louder and be a little bolder, and explore how we can make a greater impact by working and funding together.