The latest findings from the Social Impact Staff Retention project are here! If you’re short on time, check out the 2025 infographic for a quick summary. Learn why nonprofit staff look to leave their current roles and why they stay.

This project is fueled by a deep commitment to the nonprofit sector—helping decision-makers understand what practitioners are experiencing so they can lead more effectively.

You can also hear more insights from the project in recent interviews on:

• Nonprofit Lowdown with Rhea Wong
• What The Fundraising with Mallory Erickson

President Trump’s newly released Fiscal Year (FY) 2026 “skinny” budget outlines sweeping federal spending cuts that would deeply impact public services and nonprofit organizations. The proposal calls for a 22.6% ($163 billion) reduction in domestic discretionary spending, while increasing defense funding by 13%. The budget slashes critical programs in education, housing, environmental protection, public health, and more, while openly targeting nonprofit institutions as “wasteful” and ideologically driven. If enacted, these cuts could have severe consequences for vulnerable communities across the country.

Key Highlights from the Budget Proposal

President Trump’s FY2026 “skinny” budget proposes:

• 22.6% cut ($163 billion) to domestic discretionary spending
• 13% increase in defense spending
• Increased funding for homeland security

OMB Director Russ Vought explained that the administration believes federal spending is “laden with spending contrary to the needs of ordinary working Americans” and criticized funding for nonprofit organizations and institutions of higher education as advancing “radical gender and climate ideologies.”

The budget identifies and denigrates specific nonprofit organizations as “wasteful,” “liberal,” and pushing a “leftist agenda.”

Proposed Cuts to Programs and Services

The following departments and programs would be among the most severely affected:

• Education, HUD, Labor, Interior, EPA, USAID
• Infrastructure Investment and Jobs Act: cut by $15.2 billion
• Energy efficiency programs: cut by $2.6 billion
• FEMA preparedness grants: cut by $646 million
• Substance use disorder programs (SAMHSA): cut by $1.06 billion
• EPA clean and drinking water support: cut by $2.46 billion
• Refugee assistance: cut by $650 million
• Fair housing enforcement: cut by $60 million
• Low-income heating assistance (LIHEAP): cut by $4 billion
• Community Services Block Grants: cut by $770 million
• Rental assistance & affordable housing: cut by over $30 billion
• AmeriCorps and other workforce programs: proposed elimination

Escalating Tensions with the Nonprofit Sector

The budget continues a trend of executive actions aimed at weakening the nonprofit sector:

• In January 2025, the White House attempted to freeze all federal financial assistance, prompting the National Council of Nonprofits (NCN) to file litigation.
• The administration has terminated contracts, rescinded grants, and refused to allocate congressionally approved funding.
• President Trump threatened to revoke Harvard University’s nonprofit status.
• DOGE staff were assigned to oversee the Vera Institute, an independent nonprofit receiving federal funding.

What’s Next?

While the skinny budget signals the administration’s funding priorities, Congress holds the power of the purse. A more detailed budget is expected later this month, followed by the start of the FY2026 appropriations process in the House and Senate.

Congress must pass final spending bills or a continuing resolution (CR) by October 1 to avoid a government shutdown.

Call to Action

As federal funding decisions take shape, nonprofit leaders, advocates, and community members must:

• Stay informed
• Connect with partners and coalitions
• Engage with elected officials

Our collective voice is critical in protecting the programs and institutions that ensure equity, safety, and opportunity in communities across the country.

Governor Glenn Youngkin has announced a $900 million reduction in the state’s budget as a precautionary measure in response to anticipated economic uncertainty tied to the federal policy direction of President Donald Trump’s new administration.

Budget Overview

The cuts primarily target one-time capital improvement projects at public colleges and universities that have not yet begun construction. Youngkin characterized the move as fiscally responsible, citing potential federal actions such as workforce reductions, spending cuts, and new trade tariffs that could significantly impact Virginia’s economy, particularly its federal workforce and contractor base.

Political Response

The budget revision has drawn mixed reactions from lawmakers. Republican leaders largely praised the decision as a prudent step to prepare for fiscal turbulence. In contrast, Democratic leaders criticized the governor for acting unilaterally without broader consultation, raising concerns about transparency and legislative oversight.

Investments Maintained

Despite the cuts, the revised budget preserves key investments in:

• Maternal health initiatives
• Disaster relief efforts
• K–12 public education
• Water infrastructure, including a $25 million allocation to address water treatment concerns in Richmond

Youngkin noted that the deferred capital projects are not off the table permanently. He indicated a willingness to revisit these proposals in a supplemental budget later this year, allowing the General Assembly to take them up during the 2026 session.

Why It Matters

With Virginia’s close ties to federal employment and contracting, the state is particularly vulnerable to national policy shifts. This budget maneuver signals a strategic, though politically contentious, effort to shore up financial stability in uncertain times.

April 2025

At the Center for Nonprofit Excellence – Virginia, we are proud to stand alongside you as champions and advocates for the nonprofit sector. We recognize that this year has brought an overwhelming amount of change and uncertainty. Information is coming at us quickly, and many of these shifts—particularly in government funding—have been detrimental to nonprofits’ ability to meet urgent community needs, from child care and food security to affordable housing and mental health services.

As we work through this complex moment together, we encourage nonprofit leaders to prioritize open conversations with funders—local, state, and philanthropic—about how to strategize collaboratively and think differently in the face of significant funding deficits due to federal or state reductions. Now is the time to assess risks, adapt creatively, and lean on our collective strength to sustain our missions.

Federal Policy Developments

Courtesy of the National Council of Nonprofits (NCN)

Executive Orders: What Nonprofits Should Know

The NCN’s Executive Orders Affecting Charitable Nonprofits chart now includes a helpful “status” column that clarifies which executive actions are in effect, under legal challenge, or pending review.

Additional Resources:

• Nonprofit Risk Assessment Checklist
• General FAQs on Executive Actions

Legal Spotlight: Woonasquatucket et al. v. USDA

In March 2025, NCN and the Woonasquatucket River Watershed Council, among other plaintiffs, filed a lawsuit against the U.S. Department of Agriculture. The case challenges new federal grant policies that restrict nonprofit access to public funds without clear justification or due process.

• NCN Lawsuit Overview
• WRWC’s Statement

Medicaid Cuts & Federal Budget Threats

From The Commonwealth Institute

The U.S. Senate is advancing a budget framework that could lead to deep cuts to Medicaid, potentially affecting hundreds of thousands in Virginia.

A report by CBPP estimates $880 billion in proposed cuts would lead to:

• Reduced benefits
• Lower enrollment
• Decreased provider payments

What’s at Risk for Virginia:

• Over 874,000 Virginians may lose coverage due to harsh new work reporting requirements.
• A per capita cap could shift $16–27 billion in costs to Virginia over 10 years.
• Lowering the federal Medicaid match from 90% to 51% would cost $2.28 billion in 2025 alone.
• Vital services—like addiction treatment, foster care screenings, and disability supports—would be impacted.

“We have to fight for Medicaid. We have to fight for SNAP.” — Rep. Suhas Subramanyam (VA-10)
“Over 600,000 working Virginians could be thrown off Medicaid rolls.” — Del. Rip Sullivan (D-Fairfax)

Action Needed: Contact your members of Congress. Advocate for Medicaid and SNAP.

Virginia Budget & Policy Updates

Via The Commonwealth Institute & Virginia Funders Network

General Assembly Reconvened: April 2

Lawmakers reconvened and rejected most of Governor Youngkin’s proposed amendments to the 2025–26 budget. This includes cuts to education and Medicaid planning.

What Was Protected:

• Lifting the arbitrary cap on funding for school support staff
• Increasing the refundable EITC for low-income working families
• Rejected: Medicaid contingency planning tied to federal cuts
• Rejected: Expanded private school voucher program

Budget Comparison Tool
TCI Budget Response
Virginia Budget Process Visual

What You Can Do

• Talk with your funders. Start honest, creative conversations.
• Scenario plan with your board and leadership.
• Share tools and resources with your team.
• Advocate. Call your elected officials. Join coalitions.
• Center well-being. Caring for your self and your team is part of resilience.

You’re Not Alone

The challenges are real—and so is our shared commitment to community. If you’re feeling overwhelmed or unsure how to respond to these changes, reach out. CNE-Virginia is here to help—whether it’s breaking down policy, identifying action steps, or just brainstorming next moves.

Together, we will keep showing up for the people and places that depend on us.

Mariane Asad Doyle

Executive Director, CNE

Information and updates on a new executive order restricting voting from the National Council of Nonprofits.

President Trump just issued an executive order affecting voting: Preserving and Protecting the Integrity of American Elections. The EO is very broad and restricts access to voting by requiring proof of citizenship, changing voting standards and guidelines, removes federal funding to states for noncompliance, and prohibits foreign nationals from contributing or donating in elections.

Of particular concern, Section 8: Preventing Foreign Interference and Unlawful Use of Federal funds directs the Attorney General to “prioritize enforcement” to “prohibit[] lobbying by organizations or entities that have received any Federal funds”. Organizations and entities are not defined and therefore could apply to nonprofits that receive federal funds and are lawfully advocating and lobbying for their missions.

We expect the EO to be challenged in court quickly.

More information on the EO:

• Trump signs executive order that will upend US voter registration processes, The Guardian, Mar. 25, 2025.

The EO is modeled after the SAVE Act (H.R. 22), which has been raised by many in the network. More information on the bill:

• SAVE Act Would Undermine Voter Registration for All Americans, Brennan Center, Feb. 11, 2025.

We’ll be updating the Chart soon with the EO. In the meantime, here are the main provisions:

Preserving and Protecting the Integrity of American Elections

• Requires the mail voter registration form to require proof of citizenship.
• Requires recording of the type of document an applicant uses as proof of citizenship.
• Requires identification of “unqualified voters registered in the States”.
• Requires information on foreign nationals who have registered or have voted.
• Requires assessment of citizenship prior to providing voter registration forms for public assistance programs.
• Prioritizes enforcement against noncitizens registering to vote.
• Removes federal funds to states that do not comply.
• Changes voting standards, guidelines, administration, and electronic systems.
• Conditions funding for the states on “uniform and nondiscriminatory standards…that define what constitutes a vote and what will be counted as a vote.”
• Prioritizes enforcement against foreign nationals from contributing or donating in elections.
• Prioritizes enforcement against lobbying by organizations or entities that have received federal funds.

This incredibly helpful checklist from the National Council of Nonprofits (NCN) offers steps you can take if your federal grant funding or contract is terminated.

Read the article and checklist on NCN’s website

The article is from the Nonprofit Financial Commons, written by Steve Zimmerman and Ruth McCambridge.

For nonprofit leaders, 2025 started with a bang, featuring first a set of executive orders that targeted a specific set of issues and organizations but progressed quickly to a general order from the Office of Budget and Management (OMB), placing a freeze on all federal grants. This last directive, which occurred on January 27, was immediately stayed by a DC circuit court judge in response to lawsuits filed by NCN and others, and while that legal fight goes on, particular fields of nonprofits, like international aid organizations, are still being subjected to a wide array of more immediate cuts and threats.

Many nonprofits, of course, did what they always do in such situations — laying quick groundwork to explore the full range of their possible choices for delivering on mission even when it appeared that a good part of their funding bases might be disrupted and maybe even eliminated virtually overnight.

This article is intended to help nonprofit organizations take on the first phase of what is likely to be an extended period of financial uncertainty. It is structured as an action checklist designed to build your organization’s agility under turbulent conditions. The first part focuses on the importance of building your ongoing access to unrestricted and liquid dollars, while the second part is about using our network and advocacy to protect ourselves, other nonprofit organizations in our community, and the people being politically targeted by these actions.

The Twelve Steps

1. Check and monitor your cash flow and liquidity.

How much time do you have before needing to reorganize, if that is required? Disruption, whether caused by economic, regulatory, or political forces, is often first felt in cash flow. Understanding the organization’s cash position will help leadership determine the urgency of their response.

To assess financial health, calculate the organization’s reserves using this formula:

(Net Assets Without Donor Restriction – Fixed Assets) ÷ Typical Month’s Expenses

This ratio, commonly referred to as LUNA, or Liquid Unrestricted Net Assets, indicates how many months of operating expenses the organization has if no additional income were received. The higher the number, the more time leadership has to make strategic decisions.

2. Bill paying: Begin to identify the timing of and need for expenditures.

Identify any possible expenditures that can be put off. These include, but are not limited to, capital expenditures the organization was going to undertake. However, whatever you do, DO NOT stop paying payroll taxes. Manage payables carefully, taking advantage of the full time the organization has to pay expenses.

3. Inventory all contracts, along with their associated risks and requirements.

Leadership should inventory all contracts to see how much latitude for renegotiation exists in them. Contracts should include funding agreements, as well as any contracts for services the organization may have. Knowing when grants or revenue contracts are up for renewal is essential to understanding when risk may be higher. Likewise, understanding cancellation terms on contracts is important to know where levers might exist for reducing costs.

4. Be realistic and active on all elements of cash flow projections and management.

If you have suffered from late payments on government contracts, it might be safest to assume that the problem may worsen in the near future. Take the time to make sure that you have a realistic cash flow projection updated and ready to be used by staff and board.

5. Address any external barriers to the use of cash.

Consider your banking relationship and any precarity in your line(s) of credit with an eye to retaining access to that debt. This is a great place to engage board members in the discussion and utilize any relationships they may have with your bank. Get involved with advocacy coalitions to ease issues with late payments and related problems wherever possible.

6. Address any internal barriers to the use of cash.

Check board-imposed requirements regarding the use of reserves (and possibly some types of endowments) both for cash flow and replacement of at-risk operating funds. Begin a conversation at the governance level to lay the groundwork for this possibility.

7. Measure the risks in existing revenue mix.

To understand financial risk, analyze revenue sources. Determine the percentage of total revenue that comes from government contracts, individuals, foundations, and other sources. Then, assess concentration within each category. For example, if the organization receives 30% of its revenue from foundations, but 95% is from a single funder, the organization is highly vulnerable. This information provides context for understanding the implications of potential funding changes.

8. Refresh all local and field networks so you are looped in on all the information related to changes in revenue streams and regulatory schemes as soon as possible.

Things are changing quickly. Even if you don’t have federal funding, state and local funding may come from the federal government and be impacted by these changes. Additionally, as the changes flow through the economy, there may be an affect on individual donations or fee-for-service programs. Stay aware of the latest happenings by connecting to your local networks to listen and learn about the environment from others.

9. Push funders to increase liquidity, ease transaction requirements, and increase revenue dollars overall.

During the pandemic, many foundations relaxed their restrictions on funding, even in existing grants. Approach local foundation funders to ask them to:

• Remove any restrictions on grants already made or under consideration
• Begin to consider the need to give at a higher rate than usual — and potentially out of their endowments
• Make loan monies available to affected groups when the problem is not revenue but cash flow

One of the problems in this situation is that nonprofits that are highly dependent on government grants tend to have less unrestricted funds proportionate to overall operating costs, and those funds may already be tied up in the cash flow needed to cover late payments and operating costs not covered by government contracts. This means the very nonprofits that would be most affected by potential federal freezes, cuts, and terminations are likely to be those with the least flexibility. These organizations are anchor agencies in our communities that address basic needs such as health care, housing, early childhood education, and refugee settlement. They may need to access funds from places they may not have previously connected with. Make introductions to other organizations and approach funders collectively to address this community challenge.

10. Communicate, communicate, communicate.

While the intensity of a crisis may fluctuate, the importance of clear communication on strategies and the potential role of stakeholders in carrying those out remains constant. The current uncertainty has created anxiety among leadership, board members, staff, volunteers, and constituents. Transparency, built trust, and acknowledgment of the personal stresses caused by this situation are all key.

Avoid making promises you cannot keep. Rather than guaranteeing programs will remain open, commit to inviting participation in finding the way forward while sharing what you do know, acknowledging what you do not know, and providing regular updates — even when there is no new information. Consider increasing the frequency of communications with key stakeholders and staff so they are informed and know the latest information. Establishing a predictable communication routine reduces anxiety and builds trust.

11. Build and deploy social capital.

In moments of crisis, nonprofits will generally find they can benefit greatly from engaging their human and social capital wisely. This realm of currency exists in your staff, networks, and program participants, and you will find it can often eventually be converted to dollars and cents, though it is enormously valuable on its own.

Empower the people closest to an organization — board members, staff, donors, volunteers, community members, and constituents — to spread the word. Encourage them to speak with friends, neighbors, elected officials, and other stakeholders about the organization’s impact and financial needs.

When doing strategy, we often ask the question, “If we went away today, who would it matter to and why?” Unfortunately, this is no longer a hypothetical question for many organizations. Use this question to articulate both the impact the organization has on direct program beneficiaries as well as the broader community impact strengthens advocacy efforts. Then, share this information with your friends and partners to amplify the organization’s story. Too often, nonprofit organizations are so busy delivering services that they neglect to advocate for their own survival. Now, more than ever, they must share their stories effectively.

12. Support other organizations.

In this precarious time, remember that you are not alone. Nonprofit organizations must work together to support each other and find solutions. Reach out to other organizations to understand their needs, how you might help them, and how they might help you. This collaboration to protect the most vulnerable in our communities is central to our identity.

Read the article on the Nonprofit Financial Commons website

211 is a vital service leveraged by millions of people across North America. 211 Virginia is a free and confidential service that connects people with information on available local resources throughout the Commonwealth. Every day, clients contact 211 to access free and confidential crisis and emergency counseling, disaster assistance, food, health care and insurance assistance, stable housing and utilities payment assistance, employment services, veteran services and childcare and family services.

211 Week is happening this week from February 10 – 14. The week will kick off with an event from 211 Virginia’s leadership team with the State of 211 Virginia. Throughout the week 211 Virginia will be sharing about their new website, directory of resources, and community partners.

Learn more and register: https://211vauniversity.mailchimpsites.com/211week