With a shutdown looming, few nonprofits are bracing as hard as the Capital Area Food Bank. In 2019, the longest government shutdown in U.S. history forced thousands of federal employees to turn to the group’s pop-up food distribution points across the Washington, D.C., area.
This year, with another shutdown on the horizon, the food bank has already mapped out the places where hunger will likely grow. Where cafeteria workers on Capitol Hill, air-traffic controllers, and hundreds of thousands of other federal employees and contractors will go without pay. Where tens of thousands of local families will struggle to afford infant formula or peanut butter after losing benefits from the Women, Infants, and Children, or WIC, program.
If Congress fails to pass a budget by midnight Saturday night, when the fiscal year ends, the federal government will lose the ability to pay its 4 million employees, renew or award new contracts, or sustain many programs that Americans — and nonprofits — rely on. In what’s become a bitter cycle, nonprofits across the country are creating contingency plans for yet another government shutdown.
It couldn’t come at a worse time for burned-out charities already buckling under high demand, says Radha Muthiah, president of the Capital Area Food Bank. The organization has gone from providing 30 million meals’ worth of groceries before the pandemic to a projected 50 million annually since pandemic-era food benefits expired in March.
“We’ve been working in overdrive to get food out to the people who need it,” she says. “This potential federal government shutdown just adds another burden to an already stressed network.”
What will happen if the government shuts down?
During a shutdown, the government ceases all operations that are deemed nonessential. Millions of federal employees will be furloughed or asked to work without pay until the government reopens.
Some federal benefits, like Social Security and Medicare, don’t require annual congressional approval and, barring an exceptionally long shutdown, will continue to operate. Others, like WIC and the Supplemental Nutrition Assistance Program, known as SNAP, are at greater risk.
If Congress fails to make a deal, WIC will immediately stop providing nutritious food and support to nearly 7 million mothers and children, although cut-off dates might vary by state. SNAP recipients will continue to receive benefits through October, but the program could run out of contingency funds if the shutdown lasts longer than 30 days.
That could be disastrous for the more than 40 million people — or 12.5 percent of Americans — who rely on SNAP to afford groceries each month.
Without it, charities could fall under immense strain as families scramble to get food on the table. Food banks “can come nowhere close to addressing the gap that would be created if food-stamp recipients weren’t getting their SNAP benefits,” Muthiah says.
Head Start and other federally funded programs are at risk.
Just as the new school year begins, as many as 10,000 children could lose access to education programs if the government shuts down next month.
Head Start, a free, federally funded early-childhood program, serves more than 800,000 low-income children through 1,600 nonprofits nationwide. Ten of those organizations are due to renew their federal Head Start grants on October 1, with more scheduled to renew on November 1.
While some groups plan to take out lines of credit or tap other funds to stay open, many will be forced to close their classrooms if the government shuts down for even a few weeks.
For children born during the Covid pandemic and just settling into the school year, even a short disruption could be painful for families, says Tommy Sheridan, deputy director of the National Head Start Association.
“A lot of these children are just getting used to their routines — to this kind of social engagement — and they’re really trying to learn how to learn,” he says. “Anybody who’s had a young child knows that stability is absolutely critical.”
In 2013, a 16-day government shutdown affected nearly two dozen Head Start grantees in six states. Many were forced to close their doors before the philanthropists Laura and John Arnold offered Head Start grantees a no-cost $10 million loan to stay afloat.
Other federally funded nonprofit programs are also at risk.
Funding for federally qualified health centers, a lifeline for primary-care services for more than 30 million low-income Americans, is set to expire if the government shuts down, forcing clinics to cut services. Domestic-violence shelters, which rely on a slew of federal grants, nearly closed their doors in 2019 when the shutdown jeopardized critical reimbursements from the Department of Justice.
Expect even longer waits for contracts and grants.
More than 30 percent of nonprofit revenue comes from government grants, many of which are tied to the federal government. The federal government is a major source of support for charities, but one that can be fickle and hampered by delays and bureaucracy on a good day — let alone during a shutdown.
“It’s a severe stressor for organizations, who don’t know what’s going to happen or how they’re going to get through this period,” says Annie Chang, vice president of community engagement at the Nonprofit Finance Fund, which offers loans and financial advice to nonprofits.
While each federal agency boasts its own contingency plan — a road map for who should keep working and what should remain functional in case of a shutdown — it’s difficult to predict exactly how programs and nonprofits will be affected, Chang says.
She recommends that nonprofits look to their philanthropic partners, local government, or line of credit to help ease any cash-flow problems.
During the 2019 shutdown, many homeless shelters were unable to renew important contracts with the Department of Housing and Urban Development. In a hopeful sign, this year’s HUD contingency plan does include provisions to keep renewing such contracts.
The road could still be bumpy, says Marcy Thompson, vice president for programs and policy at the National Alliance to End Homelessness, which advocates for policies to end homelessness in the United States.
“Think about when you go on vacation for only two weeks and then try to catch up — imagine all 8,000 people in the same boat,” she says, referring to what will happen when government workers return. Thompson says that a prolonged shutdown will cause “ripple effects” in the form of long delays in government processing that will extend well beyond the shutdown’s end.
In the meantime, Thompson recommends that nonprofits try to take care of any pending questions or processes about federal grants before time runs out.
“If there’s anything that you have a question about — especially if it’s related to anything related to your grant and access to funds — get that taken care of before October 1.”
