Many nonprofits are reeling from federal funding cuts — and are holding their breath in an uncertain economy, wondering how they would respond to a potential recession.
There are signs that the national economy is starting to slow. But several regions of the country have already experienced some of the economic pain that comes with a recession. Both the Washington, D.C., and Atlanta regions have had significant federal work force cuts due to DOGE, as well as private job losses from reduced government contracts.
“We were not anticipating 2025 to be as difficult of a year as it was,” says Scott Schenkelberg, CEO of Miriam’s Kitchen, a Washington nonprofit working to end homelessness. “People have literally lost income because they’ve lost their jobs, either because they were a direct federal government employee or they were working for an organization relying on government funding.”
That’s caused the giving environment in the city to change profoundly. The same is true in Atlanta, says Wesley Myrick, executive director of the Georgia Interfaith Public Policy Center.
“Without that stability, it’s a very challenging proposition to raise individual dollars, corporate dollars, or philanthropic dollars,” he says. “All those things are working in an ecosystem that relies on the idea that people can predict what their expenses are going to be and where the money to support those expenses are going to come from.”
While nonprofits have managed through recessions before, this time feels different, says Liz Livingston Howard, executive director of the Kellogg School Center for Nonprofit Management at Northwestern University.
One difference: The number of donors has been declining over the past decade. “That would not have been the case in previous recessions,” Howard says. “This is a unique moment in time for fundraising as we look at the raw number of donors going down, the increased influence of high-net-worth individuals, and the uncertain economy all at the same time.”
To get a handle on what may be brewing if the nation slides into a recession, the Chronicle spoke to nonprofits in Washington and Atlanta. They offered a glimpse of how job losses coupled with federal budget cuts are impacting individual, corporate, and foundation giving. Unfortunately, it’s not a pretty picture.
Some nonprofits are not prioritizing fundraising.
It’s logical to assume that if a nonprofit loses revenue, it will quickly turn to fundraising. However, the reality is more complicated, say consultants and community foundation leaders. Many nonprofits are short-staffed and focusing their energy on short-term budget strategies to keep the doors open — not on raising money.
“People are really looking on the expense side of the balance sheet,” says Tonia Wellons, CEO of the Greater Washington Community Foundation, which works with both nonprofits and donors in the area.
Some nonprofits are also choosing not to ask for gifts, worried their donors are struggling, says fundraising consultant Kerry Watterson. His firm, Fundraising Well, held a free workshop for nonprofits in Baltimore-Washington area. Watterson wanted to help fundraisers improve their solicitations by offering constructive feedback and tips to improve recent asks they’d made. He asked attendees to volunteer examples.
“It was crickets,” Watterson says. No one had been soliciting gifts. “I asked, ‘What’s going on?’ And people would say, ‘Well, you know, with all these cuts, we just don’t know if people have the money to support us.’ But that’s for them to decide, not you.”
He says nonprofits have to keep engaging with donors and asking for gifts, especially in turbulent times.
When groups do ask for money, they’re not raising as much.
While some nonprofits are backing off asks, those still making appeals are seeing declines in giving. Miriam’s Kitchen’s fundraising is down nearly $1 million in 2025.
“We’re projecting about a $900,000 decrease across our private fundraising categories,” Schenkelberg, the CEO, says. “All of this uncertainty has made people much more reluctant to give of their discretionary income — if they still have income.”
Miriam’s Kitchen has an annual budget of about $13.5 million, according to Schenkelberg, with roughly half its revenue coming from individuals, corporations, and foundations, and the rest from local governments, which have “not yet been affected by any of the cuts.”
Bread for the City, a nonprofit that provides food, clothing, and other essentials for people in need in the D.C. region, is also seeing drops in giving, says Ashley Domm, chief development officer and head of advancement.
“We’re seeing pretty significant decreases in our bread-and-butter typical individual donors,” she says.
By way of example, she points to the first days of a recent email appeal. Back in 2019, pre-pandemic, an appeal to the organization’s list of 30,000 supporters might raise $15,000 “in a couple of days,” she says. During COVID, the same mailing might raise $100,000.
“Back then, we saw this big bump in individuals saying, ‘Yes, I’m going to donate. I’m going to participate in this emergency,’” Domm says. Cut to this year, and the picture is very different. “When we had our federal funding freeze happen, and we sent out a similar emergency appeal to say, ‘We’re very worried about our federal funding; this is what it funds, this is where the gap is,’ we raised $185.”
The current fundraising environment can be frustrating, Domm says, because “we feel like we’re in emergency times, but we’re not getting the kind of emergency funding that we’ve been used to in emergency times.”
Across the region, it’s the same picture, says Rosie Allen-Herring, CEO of the United Way of the National Capital Area, who talks to many nonprofits in the region.
“A large number of donations come from federal government employees,” Allen-Herring says. “Now that they feel impacted by this, they are not feeling secure, safe, or probably not as charitable when they don’t know what their employment situation is going to be like.”
The Atlanta area is experiencing similar issues, says Karen Beavor, CEO of the Georgia Center for Nonprofits. “We have a lot of service businesses here in Atlanta — accounting firms and consulting firms — that have had government contracts dramatically reduced,” she says. “So we’re seeing some effects of those cuts. That uncertainty translates into their giving patterns.”
Corporations are pulling back.
Corporate giving has dropped in both Washington and Atlanta. Beavor, in Georgia, says many businesses are looking at their budgets, the political situation, and lost jobs in the local area and pausing their giving while they take stock.
“There’s a tremendous amount of uncertainty with the tariffs on, tariffs off and what that really means.”
Schenkelberg says business donations have “declined significantly as corporations are trying to figure out how to navigate the political and economic uncertainty. Charitable giving absolutely does take a hit in all of that.”
The good news, he says, is the corporate partners haven’t stopped donating altogether. “It’s been reduced giving or ‘not now, maybe later,’” Schenkelberg says. “I’m not aware of any corporations out there who have said, ‘Not now, not later. Don’t call us. We’ll call you.’”
Corporations are backing off from giving to causes the current administration is openly hostile toward, such as diversity, equity, and inclusion or immigration work.
“If their corporate citizenship work could be perceived as DEI, then they’re pulling back on that,” says Allen-Herring, of the United Way. Some corporations that still give to nonprofits that do such work are being “more restrictive” about how their dollars can be used, she says.
Beavor says the same is true in Georgia. “We have seen certain groups not be funded,” she says. “There’s no overt communication related to that, but we have seen that as a pattern across certain giving.”
The Latino Community Fund Georgia says fear of retaliation has affected fundraising.
“There’s this domino effect because funders have become quite shy,” says Gilda Pedraza, executive director of the group. “It creates the appearance of exposure. If funders, like corporations, decide to continue working with you to be supportive and you are a target, it can potentially create liabilities.”
Allen-Herring said some corporations are ignoring concerns about backlash and still giving. Some nonprofits the Chronicle spoke to said they’d seen an uptick in anonymous donations, as these donors still want to give but don’t want to become targets of the administration.
Foundations are helping their grantees. But newcomers need not apply.
Whether nonprofits can turn to foundations for assistance depends on whether they already have a relationship.
“For dollars that have already been allocated, they’ve been very open to saying, ‘What sort of flexibility can we give you?’” says Myrick, at the Georgia Interfaith Public Policy Center. “Some foundations have simply said, ‘OK, we’re not funding new people this year. We’re going to focus on the group of partners that we’ve worked with already because we want to go deep with this group. We want to sustain that work.’”
Wellons, at the Greater Washington Community Foundation, has seen similar moves. “They are doing rapid-response grants to nonprofits within their existing portfolio,” she says.
Part of the reluctance to support additional nonprofits may be a desire to craft a plan for the changing funding landscape. “We’re seeing the [foundation] donor community trying to understand,” Beavor says. “They’re trying to work behind the scenes. If this happens, what will be our response? How do we leverage process considerations, multi-year funding, more operations?”
Demand for services has surged.
With government job reductions and additional layoffs resulting from federal funding cuts, the need for nonprofit services in Washington and Atlanta has spiked.
“We saw hundreds and hundreds of people coming in during one day in one pantry — over 300 more than we normally would,” says Domm, at Bread for the City. “Three hundred doesn’t sound like a big number, but that’s more than we would typically see in the month of May or in the month of June. We’re seeing service levels that we would see in November around the week of Thanksgiving.”
At the Latino Community Fund, there’s been an increase in demand for health services, such as screenings for glucose or blood pressure, because of both job losses and increased immigration enforcement. “We don’t have enough personnel to meet the demand, which has increased, because people don’t want to go to [other] health centers because they are afraid,” Pedraza says.
Job losses and reduced hours in the Atlanta region means that the nonprofits the Georgia Interfaith Public Policy Center works with are seeing increased need for their services. “The demand has just ratcheted up 20, 30, 40 percent for people who were already on the brink,” Myrick, the executive director, says. “Human-service organizations that do rental assistance or counseling services — they’ve had rental-assistance applications skyrocket.”
Nonprofits are worried about the future.
The leaders the Chronicle spoke with fear things could get worse if government funding decreases further.
“We’re all holding our breath about what does it mean in the fall” if government funding drops sharply, Beavor says.
Miriam’s Kitchen has one program that relies heavily on Medicaid funding, Schenkelberg says, so severe cuts would be devastating.
“We’d have to think about are we doing a hiring freeze? Are we reallocating caseloads for that program so that there are higher caseloads per person in a lower head count?” he says. “There’s no way we’re going to make up for the loss of significant Medicaid revenue.”
At Bread for the City, the feeling is similar. While the group’s food programs are funded primarily through donors, its medical center relies almost entirely on federal funding. Losing that money would mean cutting the program altogether or locating another clinic that could take its 4,000 patients, Domm says.
Pedraza worries that the economic environment will continue to decline, leading to more inflation, more need, and fewer donations.
“All the dominoes haven’t fallen,” Pedraza says. She notes that a high percentage of food and construction workers are Latino, and some are not going to work because they are afraid of being detained by immigration officials, who have at times wrongly detained immigrants and U.S. citizens. “Things are only going to get more expensive for everyone, and that has the potential to depress even more philanthropic contributions.”
While worry about the future is very real, Schenkelberg is trying to take the long view and lean on his team. He hopes others in the nonprofit world will do the same.
“Really look around the community that you’re in, the people who are supporting you, the co-workers you have, and take solace in that,” he says. “It’s really important because you can shoulder a lot if you come together and you’re focused on the same mission. It doesn’t change the reality on the finances, though. It just makes it makes the work feel easier and more fulfilling.”
To learn what fundraising tactics leaders in Washington and Atlanta are trying in this environment, read our upcoming story, which will run soon.
