
(UPDATE, Jan 29: The administration has rescinded their order to pause federal financial assistance.)
(UPDATE, Jan 28: A federal judge in Washington D.C. has issued a temporary stay blocking the pause on federal assistance. This was in response to a lawsuit filed by a collection of groups including The National Council for Nonprofits. The stay will be in effect until next Monday, Feb 3, at which point the judge will issue a more permanent ruling.)
Yesterday, the Acting Director of the Office of Management and Budget, Matthew J. Vaeth, announced that the Trump administration was temporarily pausing all (yes, all) federal financial assistance in order to assess whether these programs align with the new administration’s priorities.
That assistance includes government grants that many nonprofits rely on in order to do their work.
But surely this will all be resolved quickly, right?
Well, the memo announcing the pause (which you can read here) states that it goes into effect at 5:00 pm today, January 28, 2025. It does not include any kind of timeline for when the pause might end.
On the other hand, there are already plans in motion from several state attorneys general to sue over the action, which could easily lead to a judge putting the pause on … pause. At that point, the issue will wind its way through the court system. And the only thing we can guarantee there is that it will take awhile.
Either way, this pause—and the broader questions it raises about the future of federal funding for nonprofits—will have a big impact on the sector. We’re not going to pretend otherwise.
But neither are we going to pretend that you’re powerless to do anything—especially when it comes to deciding how your nonprofit is going to respond, both in the short term (to this event) and the long term (to the half dozen other crises lying in wait down the road)
With that in mind, here are seven steps you can take right now to help steady your nonprofit today and better prepare yourself for a sustainable tomorrow.
Step 1: Don’t Panic
There’s the kind of obvious that goes without saying—like breathing. And there’s the kind of obvious that’s so obvious that actually it needs to be said loudly and repeatedly—like breathing during a moment of crisis.
That’s what we’re doing here. Don’t panic. Don’t panic. Don’t panic.
People are already working to make sure nonprofits’ voices are heard, including people from organizations like The National Council of Nonprofits and others. You’re not in this alone—the nonprofit community is rallying to make sure people like you have advocates.
In the meantime, put down your phone. Step away from your computer. Go for a walk. Buy a coffee —actually, scratch that, buy a calming herbal tea. (We mean it: The first 50 people to email us at [email protected] about this article will get a $5 Starbucks gift card.) Sit on a bench. Look at a duck. Find your inner calm, then pin it to the ground and hog tie so it can’t get away again.
Once you get back to the office (and the group chat), try and keep your thinking positive and proactive. A little gallows humor may serve you well, but straight-up panic benefits no one.
If the people around you are stressed, help them find some calm, too. Your resilience will help you build a resilient nonprofit.
Step 2: Assess Your Finances
So how, exactly, is this pause (or any future pause) going to affect your nonprofit’s finances? Consider both the short-term impact and the potential impact in the long run.
Start by taking a look at your cash flow. Determine how long your existing cash and reserves can cover essential expenses. Map out your monthly expenses against your new revenue numbers and identify where potential shortfalls might open up in the near future.
Obviously, this process is going to take awhile. You’ll be moving onto steps three, four, and five as you work through the questions here in step two. Beyond the immediate snapshot of your cash flow, here are some other financial actions you should take:
- Create an updated budget and financial forecast that reflect the potential loss of these funds.
- Map out scenarios for worst-case, moderate, and best-case (but still conservative) outcomes.
- Determine the mission-critical activities that must continue to fulfill the organization’s core purpose.
- Identify non-essential costs that you can reduce or defer to protect core services.
We’re trying to keep the tone light and breezy here but, oh buddy, you try making jokes about cash flow, forecast models, and deferred expenses. It’s not easy!
Thankfully, the next section’s gonna open with a layup.
Step 3: Gather Your Board
Time to grab the conch and blow, for your board must assemble.
It’s important that you do this quickly. If your nonprofit has rules about holding board meetings in person, it might be good to dig around for any emergency protocols left over from Covid that you can dust off and use to convene a quick online meeting.
Give your board the full financial picture, or at least as full a picture as you can given that no one knows how long this pause is going to last or how these grants will look in the future. Be transparent about the potential impact this will have on your ability to serve your community, and be clear about how you need your board to help you respond.
Have your board create a dedicated subcommittee to address this issue. Give the members of that committee a clear idea of what questions you want them to answer. Nonprofit board subcommittees are not exactly known for being engines of dynamism, so make their jobs easy. If you’ve intentionally invited lawyers, accountants, or local politicians on your board, they will be excellent additions to this subcommittee.
Finally, prep the entire board to tap their networks and raise awareness for your cause. Create crisis communication kits for them so that they’re all sharing the same message. You’re setting the stage for major community outreach, and your board members are key.
Step 4: Communicate With Your Donors
Hopefully, you’re reading this blog post in full before you act on any of this advice, because communication with your donors is something that should be happening, to some degree, from the very beginning of this whole shebang.
First of all, you should be talking to your major donors, corporate partners, and other key supporters by phone immediately. Don’t make them any promises—you don’t have the answers, and neither do they—but you can tell them about the concrete steps you’re taking to respond and remind them about the positive impact your work is making in the community.
Next come your mid-level and small donors. Send them an email soon with a similar (if more generic) message to the one you’re giving your major donors: We don’t have a crystal ball, but here are some steps we’re taking, here’s how we make an impact, and here’s how your support makes that impact possible. Remind them how much their support matters and lay the groundwork for a fundraising push in the near future should the need arise.
Finally, if you have any grants from private foundations or the like, you should reach out to them for a similar convo. Make sure you have your impact stories and stats in hand, because that’s going to matter even more for an institutional grantor.
Step 5: Contact Your Representatives
Shoutout to our colleague, partner, and frequent Neon One contributor Cherian Koshy of Kindsight for his awesome LinkedIn post about what nonprofits can do in this moment.
In that post, Cherian makes a really insightful point about why nonprofits should be contacting their local representatives regarding this situation and what kinds of arguments they should make.
From Cherian:
This is a critical moment for nonprofits to lean into what we do best: telling stories of impact. Your stories don’t just inspire—they inform and advocate. Legislators and community leaders need to hear how your work transforms lives today, even in the face of uncertainty.
In advocating for the nonprofit sector on the Hill for the last several years with Association of Fundraising Professionals (AFP Global), I know that legislators want to hear who you are impacting but they also need to know the economic impact – the jobs of nonprofit staff that will be impacted. In most states this is approximately 10% of the workforce.
He’s right on the money. Arguing for the importance of your particular mission might not connect with your legislator’s priorities, but having a massive bite taken out of your district or your state’s economy via job losses almost certainly will.
When it comes to something like this, there’s strength in numbers. Collaborate with other nonprofits in your area to create a joint advocacy campaign—and make sure everyone’s board members are involved to tap any personal political connections they might have.
Step 6: Rally Your Community
If you can no longer rely on grant funding from the federal government, you should turn to your local community for help. These are the people who are being helped by your work. This is where you’re making a real and tangible difference.
You can rally your community to advocate for your nonprofit, but you can also rally them to support your mission directly. In the long run, that’s the path that’s going to really help you.
To quote Cherian Koshy again, “When public funding pauses, private generosity powers on.”
Here are 10 things you can do to rally support from your community and increase your local giving.
- Develop a compelling message that articulates the urgency of your work, prioritizes individual stories over big picture statistics, and really emphasizes local impact.
- Launch a grassroots peer-to-peer fundraising campaign that leverages your existing supporters enthusiasm to supercharge your local profile—while also raising much needed funds.
- Host a public fundraising event like a potluck or walk-a-thon to help build a sense of community ownership and solidarity. Partner with local businesses for in-kind donations to defray costs.
- Create a group of community ambassadors by empowering engaged volunteers and supporters that understand the issues and can recruit new supporters.
- Collaborate with other community organizations—like-minded nonprofits, faith-based groups, and civic associations—on joint awareness campaigns and co-hosting public events to raise your collective profiles. This is an opportunity for you to build relationships and partnerships with other organizations in your area that will benefit both of you and the community you serve.
- If your area has any local media organizations (an increasingly big if), reach out to them with a press kit to pitch them on covering your nonprofit’s funding situation and community campaign.
- Reach out to local influencers or community leaders on Instagram, Twitter, TikTok, or LinkedIn and ask them to spread the word or host live streams about this community need.
- Reach out to corporate and small business partners that provide these companies with a way to give back that will boost their reputation in the community.
- Lean into the power of volunteerism by offering a variety of volunteer roles—administrative, hands-on program work, event staffing, or online advocacy.
- Focus on donor engagement and activation by creating a communications plan that prioritizes consistent updates and next steps. Share positive news when you can—celebrate new partners, give kudos to people who step up and help you address new challenges, and include success stories.
The best way to protect your nonprofit long term is to build a thriving base of local support that mixes together small, mid-level, and major donors to create a resilient web of support that no single funder can tear down by walking out.
We never said it would be easy. In fact, we’ll plainly state that it’s not! But this federal funding pause might just be the kind of seismic—and really, really high-profile—crisis that gives the jump start you need to future-proof your organization’s funding.
Step 7: Plan for the Future
If this can teach us anything, this freeze—however long it lasts—underscores the importance of having myriad diverse revenue streams. Even if your grant funding is restored, avoid looking at it as a return to normal. Instead, it’s a temporary (there’s that word again) reprieve that your nonprofit can use to build a more resilient model.
Nonprofit professionals are resilient. You are resilient. What you need to do is create plans now that will let you and your organization be even more resilient in the future.
Plan for a world where you aren’t reliant on a single source of funding and where your support is closely integrated into your local community you’re serving. Plan for a future where you can tune out the noise and focus on your mission, on the absolutely vital work that’s right there in front of you.
Luckily, most of the advice we’ve included in this article—the financial forecasting, the board involvement, the community outreach, and the move to a donor-focused model—can all contribute towards that planning.
For more on our vision of building and fostering communities of generosity, check out this blog post on Generosity Experience Design.
You Can Do This
As we collectively navigate this uncertain time for the nonprofit sector, here’s another reminder to take care of yourself. You’re not dealing with this alone.
Tap into your support networks, whether you’re reaching out to other nonprofit professionals or are simply stepping away from your computer to hug a friend.
It’s okay to be worried. It’s okay to be stressed. Taking care of yourself is the best way to make sure you can take care of your community, too.

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