Navigating the New Federal Funding Landscape: Resilience and Fundraising Strategies for Nonprofits
Nonprofits across the United States are confronting an unprecedented shift in federal funding. For many organizations, 2025 has brought new challenges – and new opportunities – in the wake of a sweeping Trump administration executive order. Below, we unpack what’s changing in federal grantmaking, explore emerging emergency funding for nonprofits, and outline how nonprofits can adapt through diversified revenue, smarter grant strategies, and robust social media fundraising. Through it all, a hopeful theme emerges: with the right strategies, your nonprofit can not only survive these changes but thrive in a transformed fundraising landscape.
The Federal Grant Shake-Up Under the New Executive Order
In August 2025, President Trump issued an executive order that fundamentally rewires how federal grants are awarded, injecting political priorities directly into grantmaking. Instead of independent experts and career civil servants deciding funding based on merit, the order gives the President’s political appointees unprecedented control over which projects get funded. Agencies from FEMA to NIH must now ensure grants “advance the President’s policy priorities,” effectively politicizing what was once a neutral process. Scientists and nonprofit leaders warn this move “takes political control of a once politically neutral mechanism” for funding vital programs.
Key changes under the executive order include:
- Politicized Funding Priorities: Grants must align with “agency priorities and the national interest” as defined by political appointees. In practice, this has already meant terminating or freezing grants on topics out of favor – thousands of research and social program grants have been canceled, notably those dealing with transgender health, vaccine misinformation, and diversity, equity and inclusion. Entire fields from environmental justice to criminal justice reform have seen federal support paused or withdrawn as priorities shift.
- Termination Clauses and Instability: Federal agencies are now required to make all current and future grants revocable at any time – even midstream. This unprecedented clause means a nonprofit could win a multi-year grant only to have it canceled without warning if political winds change. The resulting uncertainty chills long-term planning. Already, new grant announcements are on hold until agencies implement these review protocols, delaying critical funding cycles.
- Increased Red Tape and Delays: Despite talk of “streamlining,” the new oversight adds extra layers of bureaucracy. Grant reviews are expected to slow dramatically, as political appointees must sign off on decisions. The Association of American Medical Colleges cautioned that these changes will delay approvals and “slow progress for cures and treatments that patients… urgently need”. Nonprofits report similar bottlenecks for social service grants. In effect, what used to be routine funding renewals can now become drawn-out ordeals, with more paperwork, political vetting, and risk of sudden termination.
- Budget Cuts and Ideological Targeting: The executive order isn’t happening in a vacuum – it’s part of a broader shift in federal policy. President Trump’s latest budget proposal seeks to slash domestic program spending by 22.6% (a $163 billion reduction), targeting dozens of nonprofit-linked programs from disaster preparedness and clean water to arts and housing. In an unusual move, the administration’s budget documents even single out specific nonprofit organizations as “wasteful” or “radical leftist,” explicitly framing long-running community programs as partisan targets. This politicization of funding decisions has heightened uncertainty and concern across the nonprofit sector.
Taken together, these changes amount to a sea change in federal grantmaking. Nonprofits that rely on federal grants – about one-third of all nonprofits nationwide receive some government funding – must now navigate a minefield of political criteria and fragile commitments. It’s a moment of justified anxiety. But nonprofits are nothing if not resilient. In response to these headwinds, new support systems are emerging to help organizations bridge funding gaps and chart a sustainable path forward.
Emergency Funding for Nonprofits: New Opportunities to Fill the Gap
Community organizations are tapping emergency funds and new partnerships to stay afloat amid federal cutbacks. Local food banks, for example, have relied on stop-gap grants from community foundations to continue serving vulnerable families when government aid is delayed or canceled.
As federal dollars dry up or become less reliable, philanthropic and community-based funders are stepping in with emergency support. In fact, the philanthropic sector has mobilized rapidly in 2025 to cushion the blow for nonprofits losing federal aid. It’s been about eight months since the administration began freezing or canceling federal funds to nonprofits across areas like climate action, environmental justice, criminal justice, and DEI. In that time, foundations and donor collaboratives have launched a wave of rapid-response funds and emergency grant programs to help nonprofits weather the storm. Some of the initial emergency funds from earlier in the year have run their course, but new funds are still being created or reactivated as needs continue. Rather than only address immediate crises, several funders are now also providing grants to help nonprofits explore longer-term solutions – from strategic partnerships or mergers to, in worst cases, winding down operations gracefully.
Notable examples of these lifeline funding opportunities include:
- National Rapid Response Funds: Progressive grantmaker coalitions have set up national pools to support communities hardest hit by policy changes. For instance, the Emergent Fund provides rolling, no-strings rapid-response grants for urgent crises, particularly focusing on grassroots groups led by Black, Indigenous, and people of color In partnership with the Transgender Law Center, Emergent Fund even launched an Action for Transformation Fund to channel $1 million in quick grants to trans-led organizations fighting a growing backlash against transgender rights. Likewise, the Pride Foundation’s Fortitude Fund is offering flexible grants of $10,000–$50,000 specifically to LGBTQ+ organizations affected by the Trump administration’s policies and related state legislation. These funds acknowledge that many marginalized communities are bearing the brunt of funding cuts and political targeting, and they aim to fill gaps fast.
- Community and Regional Foundations Stepping Up: Local philanthropic leaders are rallying resources in their backyards. The Boston Foundation, for example, announced a multi-year, multi-million dollar pledge to support nonprofits hit by cuts to federal food aid programs in the Boston region. It immediately granted $1 million to the Greater Boston Food Bank and earmarked another $500,000 for local food security nonprofits to keep families fed. In Ohio, the new Elevar Fund (a family foundation initiative) partnered with a soil health nonprofit to offer grants helping Ohio farmers survive the cancellation of federal farm support programs. And in Texas, the Houston Endowment created a $15 million Collaboration Fund to give 150 local nonprofits $100,000 each in unrestricted support, helping sustain operations for groups serving vulnerable communities. These examples barely scratch the surface – from Colorado to New Hampshire, dozens of community foundations have set up critical needs funds, bridge grants, and advocacy support to ensure essential services continue.
- Funds for Organizational Transition: Interestingly, some emergency funders are not just propping up programs but helping nonprofits adapt structurally. The Greater Rochester Health Foundation’s rapid response fund in New York offers bridge funding to keep health programs running and covers costs for nonprofits to collaborate, merge, or adjust their operations for sustainability. Similarly, the Maine Philanthropy Center’s Readiness and Response Fund provides $15,000 grants to help Maine nonprofits prepare for “loss of federal funding, cuts to social programs, and targeted harassment of marginalized communities,” including support for legal defense and organizational capacity. This forward-looking approach recognizes that some organizations may need to reinvent themselves or join forces in light of permanent federal shifts.
While these emergency funding for nonprofits initiatives offer a crucial lifeline, they are largely short-term remedies. Stop-gap grants can’t fully replace the multi-year federal support many organizations counted on. Nonetheless, they buy valuable time and keep core services afloat. Nonprofits should take advantage of any relevant emergency funds – but also use this moment to retool their funding strategies for the long haul. The silver lining of this crisis is that it’s catalyzing nonprofits to innovate in fundraising and engagement like never before. Below, we outline strategic steps to diversify income, refine grant approaches, stay compliant, and supercharge donor outreach so that your organization emerges more resilient and less dependent on the whims of federal policy.
Diversify Your Revenue Streams
One clear lesson from the current landscape is “don’t put all your eggs in one basket.” Heavy reliance on a single funding source – especially federal grants – is inherently risky. When government support can vanish overnight, diversifying revenue streams is essential for nonprofits’ financial resilience. A healthier funding mix ensures that losing any one source (be it federal, state, or even a major donor) won’t be an existential threat. Diversification also often means more unrestricted dollars, giving you flexibility to respond in crises.
Consider expanding or balancing your nonprofit’s revenue in several areas:
- Individual Giving: Cultivate support from individual donors, who collectively make up the largest share of charitable giving in the U.S. Unlike grants or contracts earmarked for specific programs, gifts from individual supporters can provide unrestricted funds and long-term loyalty. This is a ripe area for growth – historically, roughly 70% of charitable donations come from individuals, not institutions. Investing in donor relationships and outreach can pay big dividends. (We’ll dive deeper into digital and social media strategies for individual giving in a later section.)
- Foundation and Corporate Grants: If you’ve been dependent on federal grants, look to private foundations and corporate philanthropy to fill some gaps. Many foundations have increased grantmaking or loosened restrictions in response to government cuts, especially in areas like human services and civil rights. For example, some foundations during the pandemic and beyond have relaxed reporting requirements and given more general operating grants – trends that continue in 2025 as funders try to help nonprofits stay liquid. Research regional and national foundations aligned with your mission, and don’t overlook corporate partners (sponsorships, corporate donor matches, employee giving programs, etc.) that might support your work.
- Earned Income and Social Enterprise: Get creative about generating income through your organization’s own activities. Could your nonprofit launch a fee-for-service program, a social enterprise spin-off, or a sliding-scale service that brings in revenue? Examples might include training workshops, consulting services, or retail sales related to your mission (e.g. merchandise or fair-trade goods). Earned income can provide a steady stream that’s within your control. Even small fees or products can add up and engage supporters in new ways.
- Events and Community Fundraisers: Revitalize your approach to fundraising events, both in-person and virtual. Events not only raise money but also draw in new supporters. Consider scalable formats like peer-to-peer fundraising campaigns, charity challenges (walkathons, livestream fundraisers), or crowdfunding drives that rally your community. These can augment the traditional gala or auction and often attract younger supporters. Just be mindful of costs vs. return – focus on events that have mission alignment and potential to break even or better in tough times.
- Online and Recurring Giving Programs: Make it easy for supporters to give online and to give regularly. Recurring donations (monthly giving) are particularly valuable for stability – if you haven’t already, establish a monthly giving club or “sustainers circle.” This transforms one-time donors into ongoing contributors and evens out cash flow. Notably, while one-time online giving revenue fell 5% in 2023, monthly giving revenue rose 6% and now accounts for 31% of all online donation revenue. The average recurring donor often contributes more over a year than a one-time donor (about $288 annually from monthly gifts versus $115 for a typical one-off gift). Promote the option to make a gift recurring on your donation forms – it’s a win-win for donors and your nonprofit’s planning.
Pro tip: As you diversify, analyze your current revenue mix and identify vulnerabilities. How much of your budget comes from government sources? From one or two major grants or donors? If any single source exceeds, say, 20% of revenue, that’s a dependency to address. Set goals to incrementally increase other streams. And bring your board into these conversations – board members can leverage their networks for fundraising introductions, corporate contacts, or even contribute personally to help buffer shortfalls.
Adapt Your Grant Strategy to Shifting Priorities
Even as you broaden funding sources, most nonprofits will continue seeking grants – but the grant-seeking strategy needs to adapt in this new environment. Federal grants may still be worth pursuing for some, but they require caution and perhaps a new angle; meanwhile, state and local government grants or contracts could become more important, and private grants more competitive. Here’s how to adjust your grant strategy:
- Align Proposals with the New Reality: If you do chase federal funding, research the current administration’s stated priorities and look for intersections with your work. This doesn’t mean compromising your mission, but it might mean framing your proposals in ways that speak to what funders want to support now. For example, if environmental justice funding is cut but “economic development” is a buzzword, a community green jobs program might be pitched as economic development and climate-friendly. Be aware, however, of ethical lines – don’t contort your mission just to fit a political trend. Some nonprofits may decide to forgo certain federal opportunities if they come with strings that conflict with core values.
- Shift to State and Local Grants: Often, when federal funding shrinks, states and municipalities try to fill the void, at least partially. Look into new grant programs or appropriations at the state level that address needs in your area. Some states have established their own relief funds or expanded grants for health, education, and social services to counter federal cuts. Local government contracts for services might also grow if localities pick up responsibilities the feds drop. Cultivating relationships with state agency program officers and city/county grantmakers can give you a leg up as more funding flows through those channels. Keep in mind, though, that many state budgets are stretched thin too, so competition can be stiff.
- Collaborate and Consortium Build: Another adaptation is to join forces with peer organizations on grant proposals. Funders, especially large foundations or government programs, sometimes favor collaborative projects that demonstrate broad impact. If funding is limited, a coalition of nonprofits applying together – sharing resources and expertise – can be compelling. For instance, several local nonprofits might co-apply to a grant to address different facets of a community’s needs (one handles food aid, another housing, another mental health) under a unified plan. Collaboration shows funders that nonprofits are efficient and not duplicating efforts, which is attractive when every dollar counts.
- Watch for New Funding Initiatives: Keep an ear to the ground for emergency or special funding initiatives that may arise. As noted earlier, philanthropic consortia have launched rapid-response funds in areas like civil rights and health. Also, the federal landscape can change quickly – legal challenges to the executive order could unlock frozen funds, or bipartisan pressure might restore funding for popular programs. Subscribe to nonprofit advocacy alerts (e.g. National Council of Nonprofits updates) so you know if, say, Congress passes a supplemental funding bill or if agencies quietly resume grantmaking in certain areas. Being timely in responding to newly opened funding opportunities is key.
- Emphasize Impact and Accountability: With heightened scrutiny on grants, make sure your grant applications double down on measurable outcomes, transparency, and compliance. Show prospective funders that your nonprofit delivers results for the community and manages funds responsibly. This not only boosts your chances in competitive grants, it also provides a degree of protection: funders are less likely to pull support from organizations that are clearly effective and accountable. In a politicized climate, your best defense is a track record of doing good that’s hard to argue with.
Finally, if your organization does have a federal grant terminated or facing termination, have a response plan ready. The National Council of Nonprofits has even published a “what to do if your federal grant is terminated” checklist. Key steps include immediately reviewing the grant agreement for termination clauses, contacting the funder to see if there’s any recourse or appeal, notifying your board and key stakeholders, and lining up bridge funding (e.g. tapping reserve funds or emergency grants as discussed). Preparation can turn a potentially devastating loss into a manageable setback.
Stay Ahead of Compliance Pitfalls
With new rules and politically charged oversight in play, nonprofits must be extra vigilant about compliance in both finances and operations. The last thing you want is to inadvertently violate a regulation and give authorities an excuse to revoke funding or, worse, challenge your nonprofit status. Here are strategies to avoid compliance pitfalls:
- Keep Up with Regulatory Changes: Designate someone in your organization (or an external expert) to monitor federal guidance and OMB memos related to grant compliance. Changes may be coming fast and furious – for instance, new reporting requirements, restrictions on activities, or certifications you need to make to receive funds. Staying informed is half the battle. Resources like the Council on Foundations and National Council of Nonprofits are tracking executive orders and providing analysis of what they mean for charities. Don’t let new rules catch you off guard.
- Maintain Meticulous Grant Records: If you are managing federal grants, double down on your documentation and financial controls. With termination possible at any time, you may be called to account for every dollar spent mid-grant. Ensure your accounting system clearly tracks grant funds, and document program results and compliance in real-time. If an inspector or appointee comes asking questions, you want to demonstrate crystal-clear stewardship. This also positions you well if you need to quickly seek alternative funding – you’ll have data and reports ready to share with other funders about what was accomplished and what remains to be done.
- Train Your Team on Political Activity Boundaries: The current administration has signaled interest in scrutinizing nonprofits’ political activity (even musing about weakening the Johnson Amendment that keeps 501(c)(3)s nonpartisan). It’s critical to reinforce internally that your nonprofit must not cross lines into partisan campaigning, which could jeopardize your tax-exempt status. Make sure your staff and board understand what’s allowed (issue advocacy, voter education) and what’s forbidden (endorsing candidates, donating to campaigns). Given the politicized climate, even the appearance of partisanship could draw unwanted attention. Remain mission-focused and nonpartisan in all official activities.
- Review Contracts for Termination Clauses: As part of risk management, review any major grants or contracts for the termination language. If an agreement now contains the new federal clause allowing termination without cause, be sure to have backup plans for that scenario. This might involve negotiating more flexible terms with subcontractors or partners, or maintaining a financial cushion. When entering new agreements, you could attempt to negotiate for partial payments upfront or more frequent disbursements to minimize what’s lost if a contract is cut short.
- Engage in Sector Advocacy (Carefully): Lastly, remember that you’re not alone. Many nonprofits and associations are pushing back on harmful policies – through lawsuits, public pressure, or legislative advocacy. Supporting these efforts (within the bounds of lobbying limits) can be part of your compliance strategy too. For example, nonprofits have joined suits that led courts to pause certain executive actions. By staying networked with coalitions, you’ll hear about opportunities to collectively advocate for fair treatment, and you’ll get early warnings if new pitfalls arise. Just be judicious and stay nonpartisan in how you engage.
Staying compliant may feel like walking a tightrope right now. By being proactive, detail-oriented, and sticking to your ethical compass, you can avoid most traps. It’s about running a tight ship – which ultimately builds trust with donors and funders as well.
Engage Donors through Social Media Fundraising and 1:1 Outreach
When federal funds shrink, turning to individual giving isn’t just a fallback – it can become a nonprofit’s lifeline. Engaging individual donors, especially through social media and personalized outreach, is one of the most powerful strategies to offset lost grant revenue. Why? Individual supporters bring not just dollars, but also advocacy and community support that can sustain your mission for the long term. And in 2025, reaching people where they are means leveraging digital channels creatively.
Social media fundraising in particular has grown from a trendy idea to a core part of nonprofit strategy. Consider these telling data points: 32% of online donors say that social media is the communication channel that most inspires them to give. Younger generations are even more influenced by online content – about 41% of Gen Z donors have been motivated to research or donate to a cause based on social media posts, and a significant minority of Millennials (25%) and Gen X (20%) report the same. In short, if your nonprofit isn’t actively present and storytelling on platforms like Facebook, Instagram, LinkedIn, and TikTok, you’re missing out on a huge pool of potential supporters.
To harness social media and boost donor engagement for your organization, try these tactics:
- Tell Your Story Visually: Use the power of photos, videos, and personal stories on social platforms to put a human face on your mission. Content that sparks an emotional response – especially joy or hope – tends to be widely shared. For example, share short videos of the impact you’re making or success stories of people you’ve helped. Behind-the-scenes clips, volunteer spotlights, or client testimonials can deepen connection. Video is the most engaging format on social media, so even low-budget smartphone footage of your team in action can resonate more than polished text alone.
- Launch Social Giving Campaigns: Make it easy for followers to donate in-app or via links. Facebook and Instagram offer built-in fundraising tools; while their revenue cut is small, they can reach friends-of-friends seamlessly. Peer-to-peer fundraising is especially potent: encourage your passionate supporters to create personal fundraisers on their social profiles to benefit your nonprofit. When a donor or volunteer shares why they care and asks their network to chip in, it taps into trust and personal relationships. According to recent reports, one in four Gen Z donors has given based on a recommendation from a social media influencer or creator they trust. In your case, your “influencers” might be your own supporters and beneficiaries – empower them to spread the word.
- Emphasize Recurring and Small Gifts: Social media is great for attracting new donors, often through small initial donations. Promote options for those new supporters to become monthly donors. For instance, run a campaign like “Give $5 for the Future” asking for a $5 monthly pledge. Many people are willing to set up a small recurring gift when prompted on social media, and over time this builds a reliable donor base. Highlight how even modest monthly gifts add up to big impact (e.g. “Just $10 a month feeds a child each week”). This lowers the barrier to entry and grows your sustainer program.
- Personalize Engagement: Use the interactive nature of social and digital communication to build one-to-one relationships with donors. Unlike mass appeals of the past, modern donors (especially Millennials and Gen Z) crave a personal connection. Simple actions go a long way: respond to comments and messages promptly, thank donors by name in posts or videos, and share updates showing donors the difference they made. For example, if someone donates to your Facebook campaign, send a quick personal thank-you video or a tagged shout-out (with permission). Implementing a donor stewardship journey – from welcome emails to impact reports tailored to their interests – can turn a casual social media donor into a lifelong advocate.
- Leverage Multiple Platforms Strategically: Different social platforms reach different audiences. Facebook remains popular for ages 30+, while Instagram and TikTok engage younger supporters with visual content. LinkedIn can be useful for reaching professionals and corporate partners. You don’t need to be everywhere, but pick the top 2–3 platforms where your target donor demographics hang out and focus efforts there. Post consistently (e.g. a few times a week) and vary your content. Perhaps use Twitter/X for advocacy alerts and quick news, Instagram for inspirational stories and behind-the-scenes, and LinkedIn for thought leadership on your cause. Social media fundraising isn’t one-size-fits-all, but a tailored approach will maximize engagement and donations.
- Invest in Donor Acquisition (if budget allows): If you have some marketing budget, consider social media ads or Google Ads to reach new potential donors beyond your followers. According to nonprofit marketing data, social media is the second most effective digital tool for nonprofits to find new supporters, just behind their own websites. Even a small ad campaign around a year-end fundraiser or a viral challenge can bring in fresh attention. Many platforms allow fine-grained targeting (by interests, location, etc.), so you can reach people likely to care about your mission. Just track your results to ensure the return is worth it – paid ads should supplement, not replace, organic outreach and peer sharing.
Ultimately, individual giving and social media outreach can help replace lost federal dollars by building a broad base of community support. Unlike government funds that can vanish with a signature, a diversified pool of donors – each giving what they can, whether $10 or $10,000 – is a more stable foundation. It also puts your nonprofit’s fate back in your own hands and those of people who genuinely believe in your work. By focusing on donor engagement, recurring giving, and personalized communication, you’ll not only raise funds but also create a tribe of champions for your cause.
Moving Forward: Building Resilience and Hope
The road ahead for nonprofits may be filled with funding twists and regulatory turns, but it’s also inspiring new agility and innovation in our sector. Nonprofits are proving once again that when the landscape shifts, we adapt, collaborate, and find new ways to carry out our missions. By understanding the changes in federal grantmaking and proactively adjusting your strategies – tapping emergency funding, broadening your revenue, retooling grant efforts, doubling down on compliance, and energizing your individual donor base – your organization can navigate this storm and emerge even stronger.
Remember, you’re not alone in facing these challenges. In fact, many nonprofits are discovering that these trials are forging stronger relationships with their communities and donors. When government support falters, the community often steps up. With a hopeful spirit and a strategic plan, you can not only replace what was lost but potentially unlock new sources of support that propel your work to new heights.
Ready to strengthen your fundraising strategy in this new era? We’re here to help. If you’re unsure what’s working and what’s not, or you just need an expert sounding board, let’s chat. Schedule a free consultation with our team to discuss your fundraising challenges and opportunities. We’ll work together to ensure your nonprofit continues to thrive – no matter what changes come your way. Here’s to resilience, innovation, and the incredible impact we’ll create, together.
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