“This current situation involves grants that were already committed through Congress. When you have a grant through the government, it’s a contractual obligation,” said Kathleen Reardon, CEO of the New Hampshire Center of Nonprofits.
Nonprofits nationwide have been caught in a whirlwind of confusion about the future of federal funding.
President Trump issued a memorandum Jan. 27 ordering federal agencies to temporarily pause “all activities related to obligation or disbursement of all federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology and the green new deal.”
The memorandum was followed by the subsequent halt of the freeze by a Washington, D.C., judge, the White House’s rescission of the memo (but not the freeze), and the most recent extension of the halt, which has left nonprofits reeling.
“The last couple of weeks have been extremely chaotic,” said Kathleen Reardon, CEO of the New Hampshire Center of Nonprofits. “Nonprofits work in partnership with the government, and the services that they are providing are a direct result of public policy efforts.”
“Nonprofits touch every single resident of New Hampshire, one way or another,” said Simon Delekta, vice president of community engagement and impact at the New Hampshire Charitable Foundation. “Nonprofits are businesses, and are expected to run regularly and provide services without having a consistently defined source of revenue.”
Grants and contracts through the federal government are often structured as reimbursement grants. The vagueness of the original memo sent nonprofits into a scramble to figure out their immediate financial situations should their reimbursement not come through.
“It’s very challenging to manage those finances,” Reardon said.
Nonprofits across the state have a myriad of concerns amid the uncertainty, Reardon said. Their first concern is how they will continue to provide their services. For a number of organizations, like shelters and food assistance, people’s lives are at stake.
“Organizations that receive federal funding include organizations providing food assistance, after-school programs, educational programs, health care, child care, housing services for people who are homeless, shelters, programs to prevent domestic and sexual assault, home care services for the elderly and small business assistance,” Reardon said.
“I think people don’t always think about all of the other economic development types of initiatives like community development block grants, community infrastructure programs, community facilities, small business technical assistance support — it really touches almost every aspect of people’s lives,” she said.
The next point of concern is how organizations will sustain themselves if a freeze went into effect. Reardon noted that 14% of New Hampshire’s workforce is employed by a nonprofit, which means a freeze could result in potential layoffs, resulting in a significant economic ripple statewide.
“(There is an) incredible reliance that all of our communities across New Hampshire have on nonprofits (without) knowing it … This uncertainty disrupts progress to helping every person in New Hampshire, and making every one of our communities across the state better … there is such a caring and wonderful nonprofit workforce in New Hampshire,” Delekta said.
The temporarily extended halt on the freeze has given NH nonprofits some sense of relief, but the fear and worry is ongoing — especially with congressional appropriations process on the horizon.
“This current situation involves grants that were already committed through Congress,” Reardon said.
“When you have a grant through the government, it’s a contractual obligation. Congress will have this appropriations process coming up, as well as a tax debate, so there’s a lot looming in addition to this situation.”
Even if funding continues to flow from the federal government, nonprofits likely will see bigger impacts, Delekta said.
“The reality of the upcoming state budget, and what it will mean for services and nonprofits across the state is really concerning,” Delekta said.
The New Hampshire Center for Nonprofits has advised its members to do scenario planning, and make sure they have an understanding of the full scope of their finances, and how reliant they are on federal funding.
On April 8, the center will hold the first part of a webinar series titled “Navigating Funding Uncertainty with a Sustainable Revenue Strategy.” The webinar, which is held in partnership with Saint Anselm College Center for Ethics in Society, will allow the opportunity for organizations to dig deep into their business plans.
“We’re working with nationally recognized expert, Steve Zimmerman, who has a process to help organizations really consider what their intended impact is and how you can align your revenue strategies with that,” Reardon said. “Between webinars, there will be opportunities for them to do very specific, tangible work.”
Understanding and navigating these ever-changing financial waters is a team effort, with nonprofits and organizations across the state banding together to weather the storm. While the New Hampshire Charitable Foundation doesn’t receive federal funding, Delekta says that they are committed to helping any way they can.
“We have the ability to respond to immediate financial needs when they crop up. The complexity in that is that we have a limited pool of resources, and the scale of need dwarfs the possibilities of us filling those gaps,” Delekta said. “We are trying to understand what our collective resources are that could be provided that would be helpful, and that don’t duplicate the excellent resources that are becoming available nationally through the National Council of Nonprofits or other entities like that.”
Primarily, the New Hampshire Charitable Foundation is looking for ways to continue providing unrestricted operating support and flexibility in their grants, while lifting up the stories of those impacted by a cut in funding, Delekta said.
“We will continue to have an open-door grant program, which responds to all needs,” he said.
As the fate of federal funding remains up in the air, Delekta notes that there are ways for everyone to get involved.
“(It’s important to) understand the reality, which is that whether you like to walk on a trail that happens to be stewarded by a nonprofit, or you go to Fold’d up in Somersworth, which is a cafe that is a nonprofit … nonprofits touch your life,” Delekta said.
“Ask ‘what can I do to support you?’ The answer might be a financial gift, it might be volunteering or tell your friends about the service. There is definitely always a space for folks to help.”
