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What Nonprofits Do — Good and Bad — When a Shutdown Looms

January 18, 2018

Congress has until Friday to pass a budget deal to prevent a government shutdown. Many federal programs will expire if a spending bill is not passed, which could have a big impact on nonprofits.

Here are some ways nonprofits have reacted during other recent government shutdown threats:

They prepared.

Nonprofits collectively get about a third of their revenue from government service fees, contracts, and grants. The Chronicle asked experts what nonprofit leaders can do to prepare for a government shutdown.

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Congress has until Friday to pass a budget deal to prevent a government shutdown. Many federal programs will expire if a spending bill is not passed, which could have a big impact on nonprofits.

Here are some ways nonprofits have reacted during other recent government shutdown threats:

They prepared.

A few examples:

Look for an emergency alternative funding source such as a line of credit or tap a community foundation for an emergency grant.

Contact federal grants and contracting officers to ask about expectations during a shutdown.

Postpone activities and events if necessary.

Record all expenses and find out what can be paid retroactively.

Communicate with staff so everyone understands the potential impact and actions that need to be taken.

They watched, worried and waited.

As a shutdown loomed in 2015, some nonprofits wrung their hands but did little to prepare. Fortunately, a shutdown didn’t occur.

They kept employees informed.

The last time there was a government shutdown, in 2013, social-service and housing nonprofits were among those affected. Charities warned some employees that their jobs were at risk if Congress did not pass a spending bill to end the government shutdown, which ended after 16 days.

They suffered delayed or stopped aid payments.

During the 2013 shutdown, an informal survey of 93 nonprofits that received federal aid found that 43 said federal aid payments had been delayed, and 13 percent said they’d stopped.

They tried to find out which programs would be affected.

Any time a government shutdown looms, nonprofits try to figure out which programs will actually be affected, because certain programs deemed vital are exempt.

During a shutdown threat in 2011, which didn’t materialize, federal officials tried to provide some guidance. However nonprofit leaders at international aid and disaster-assistance groups were among those who said they got no clarity on whether they would be affected.