A Quiet War Is Targeting America's Nonprofits—Most Don't See It Coming

Forbes

5 days ago

Public funding is being weaponized—and the civic backbone of the country is under attack.
The Trump administration is triggering a systemic unraveling of nonprofit America. Federal grants ... More have been frozen. Education, healthcare, public broadcasting, the. arts, and global diplomacy programs are all taking direct hits…all while foundations can't keep up with the wave of emergency appeals.
The Stakes
President Trump's second term is triggering a systemic unraveling of nonprofit America. Federal grants have been frozen. Education, healthcare, public broadcasting, the arts, and global diplomacy programs are all taking direct hits. Foundations can't keep up with the wave of emergency appeals—and many nonprofits are running out of lifelines.
With government dollars now used as leverage, the institutions that have long held civil society together are being quietly dismantled. This piece breaks down the damage, exposes the political intent, and lays out five ways the sector can fight back before it's too late.How Trump's Return Is Disrupting the Nonprofit Economy
It didn't start with a budget cut. It started with a message: you no longer matter. And for nonprofits across America, that message is now being delivered in silence, shortfalls, and shutdowns.A Tale of Two Crises: Red Cross and Emerson Collective Overwhelmed
In early June, the American Red Cross announced it would scale back regional emergency response teams—despite record flooding and wildfires. The reason: a $120 million shortfall tied to rescinded FEMA reimbursements. 'We're flying blind,' said one regional executive.
Simultaneously, the Emerson Collective was inundated by emergency appeals—from food security nonprofits in Arkansas to refugee resettlement efforts in Queens. 'Many partners are in existential danger—not from mismanagement, but from political abandonment,' read an internal memo.
These aren't isolated events. They are warning flares from a collapsing ecosystem.The Federal Grant Freeze That Sparked Collapse
On January 23, 2025, President Trump ordered the Office of Management and Budget to freeze all new and pending federal grants. It affected everything from education to public health, the EPA, and even foreign aid.
It was framed as a routine 'review,' but insiders made the real agenda clear: halting 'radical leftwing' spending. Within weeks, $6.8 billion in K–12 education funds vanished—including for afterschool, summer, and English learner programs. Thousands of school districts and nonprofit partners were left scrambling.
On January 23, 2025, President Trump ordered the Office of Management and Budget to freeze all new ... More and pending fedral grants. It affected everything from education to public health, the EPA, and even foreign aid. (Photo by)
Existential Questions for a Sector Under Siege
This isn't just a funding crunch. It's an ideological shift. The nonprofit sector now faces questions that go beyond survival:Public Broadcasting and Journalism Slashed
Soon after the grant freeze, the administration rescinded $1.1 billion in Corporation for Public Broadcasting funds, cutting support for NPR and PBS. Executive Order 14290 made the cut explicit—and permanent.
NPR's Editor-in-Chief resigned. Local affiliates from Detroit to Northern California warned of permanent station closures. Dozens of rural and Indigenous-serving PBS affiliates risk going dark. The result? The collapse of a civic storytelling ecosystem.
Arts and Culture Defunded
The National Endowment for the Arts was similarly gutted. In New York, Roundabout Theatre Company lost funding for national tours and educational outreach. Other institutions serving youth, rural, and BIPOC communities were also affected, many of them losing the only public arts support they've ever had.
'It's not just lights out onstage,' said one nonprofit leader. 'It's a blackout for creativity, culture, and access.'
Arts and culture organizations such as the Roundabout Theater Company—largest nonprofit Broadway ... More theater company—have lost funding that is critical for maintaining services for the public (Photo by)
Local Nonprofits Shift to Survival Mode
Across the country, smaller nonprofits have gone from planning to panic.
The Meriden Boys & Girls Club in Connecticut cut afterschool transportation for 180 students. In D.C., La Clínica del Pueblo—long a lifeline for immigrant and uninsured communities—lost Title X and Ryan White HIV-prevention grants. 'We're rationing public health,' a clinic official said. 'There is no backup.'Diplomacy, Foreign Aid, and Fulbright Crippled
The retreat isn't limited to domestic programs. USAID funding across Latin America, Africa, and Southeast Asia was frozen or canceled, crippling public health and human rights work.
The Fulbright Program, a pillar of American diplomacy, canceled over 600 international exchanges. 'We're not just retreating from diplomacy—we're burning bridges built over decades,' said one administrator.
Philanthropy Buckles Under the Weight
With public dollars vanishing, foundations are being pushed beyond their capacity.
Emerson Collective, Tides Foundation, MacArthur, Surdna, Open Society, and Robert Wood Johnson all reported historic spikes in emergency requests. In some cases, demand tripled overnight.
Even elite universities—Howard, Carnegie Mellon, Johns Hopkins, University of Michigan—and community colleges in Texas, Georgia, and Ohio saw research and workforce training programs halted due to lost federal funding.
'We're no longer choosing who to fund,' said one program officer. 'We're choosing who we let die.'
Interestingly, not all funding news is bleak. In mid-July, Forbes reported that Bill Gates, Charles Koch, and three other billionaires have pledged $1 billion toward economic mobility programs, including tech training and AI-related workforce initiatives. While welcome, this level of private giving only reinforces the deeper truth: philanthropy is being asked to patch holes that were never supposed to exist. And too many communities are falling through.
In the wake of dramatic government cuts to nonprofits, Bill Gates, and other billionaires, have ... More pledged $1 billion towards economic mobility programs, including tech training and AI-related workforce initiatives as well as research. (Photo by Dave Thompson - WPA Pool /Getty Images)
A Systemic Dismantling—By Design
This isn't budget tightening. It's strategic disinvestment.
A May 2025 Urban Institute report found that nearly 1 in 3 federally funded nonprofits had already laid off staff or shut down services. The Foundation Center reported that even the top 100 funders could only replace 28% of lost public investment.
And it's accelerating. A June DOJ memo floated additional cuts to nonprofits deemed 'ideologically biased'—a clear signal that civil rights, reproductive health, and legal advocacy organizations are next in line.
How Nonprofits Can Respond: Five Strategic Imperatives
1. Get Louder, Not Quieter
Silence won't protect you. In fact, it's a liability. Nonprofits must function as storytellers, truth-tellers, and public advocates. Expand media strategy. Activate supporters. Speak up before others rewrite your story. This isn't just about being seen—it's about being trusted.
2. Don't Just Diversify Funding—Insulate It
Funding diversity is no longer enough. Nonprofits must build insulation from political volatility. That means cultivating unrestricted gifts, long-term philanthropic partners, earned income, and community-aligned donors. Build reserves. Think like an institution, not a startup.
3. Invest in Institutional Power
Stop playing small. Nonprofits are essential infrastructure. Strengthen boards. Grow policy capacity. Upgrade tech. Train future leaders. Organizations that endure won't be the loudest—they'll be the most prepared.
4. Reclaim the Middle
Polarization is a trap. Nonprofits must reclaim their role as civic connectors—trusted, nonpartisan conveners who serve all communities. This is not about neutrality. It's about moral clarity and public trust.
5. Radical Transparency Is Protection
In an era of politicized audits and online disinformation, transparency is armor. Publicly share your funding, partners, governance, and outcomes. Make it harder for bad actors to distort your mission—and easier for allies to defend it.
What's at Stake—and What Must Happen Now
This is no longer about nonprofit viability. It's about the unraveling of the public good.
When government abandons its role in education, health, journalism, diplomacy, and the arts, the institutions that sustain civic life begin to vanish.
Foundations cannot replace public infrastructure. Nor should they be asked to.
What's needed is not just more giving—but more organizing.
Not just more funders—but more resistance.
Not just survival—but a defense of civil society itself.
Support the nonprofits under siege. Contact your representative. Don't wait until they're gone.