Samwise Nonprofits and Charities Newsletter
Tuesday, June 2, 2026
New CEP Study Finds Two-Thirds of Nonprofits Fear Financial Collapse Amid Federal Funding Cuts
A new report from the Center for Effective Philanthropy (CEP) reveals the American nonprofit sector faces an unprecedented existential crisis. According to the study, 73 percent of nonprofit leaders report increased demand for services, while 66 percent express concerns about financial stability. The share of organizations reporting a deficit rose from 22 percent in 2022 to 39 percent in 2026. Nearly 30 percent have already cut staff, and CEO burnout has reached record levels: 46 percent of leaders call it a major concern, up from 29 percent in 2025. More than 40 percent report reduced foundation funding and 36 percent report reduced federal funding.
Sources: Nonprofit Quarterly
Federal Agencies Including IRS and Medicaid Repurposed for Immigration Enforcement, Nonprofits Report Service Decline
The Trump administration has expanded immigration enforcement to include the IRS, Housing and Urban Development, Medicaid, and the Department of Education, according to an analysis by Nonprofit Quarterly. The IRS shared taxpayer addresses with Immigration and Customs Enforcement, generating errors affecting thousands of citizens. A proposed HUD rule would evict mixed-status families from rental assistance programs. Noah Gottschalk, chief external relations officer at HIAS, told NPQ that clients now avoid public spaces previously considered safe. Church World Service reported sharp declines in participation in food programs due to fear. The Protecting Immigrant Families Coalition noted that 83 percent of Americans support safety-net access for lawfully present immigrants.
Sources: Nonprofit Quarterly
Trump Budget Proposes Eliminating $1.3 Billion Afterschool Grant as States Build Independent Funding Streams
The Trump administration's fiscal year 2027 budget proposal would zero out the Nita M. Lowey 21st Century Community Learning Centers grant—the only dedicated federal funding stream for out-of-school programs, currently funded at $1.329 billion—replacing 16 Education Department programs with a $2 billion MEGA block grant. Senators Susan Collins and Shelley Moore Capito cautioned at an April Senate hearing that the proposal would harm rural communities. In May, a bipartisan coalition introduced the Afterschool for All Act to grow funding to $10 billion annually for a decade. Vermont dedicated cannabis tax revenue generating $15.6 million over its first two fiscal years specifically for afterschool programs.
Sources: Nonprofit Quarterly
Nonprofit Founders Reflect on Sector’s Irreplaceable Role in Building Democracy at America’s 250th Year
Sayu Bhojwani, board chair of the North Star Fund, writes in Nonprofit Quarterly that the nonprofit sector serves as an essential lever for democratic participation, particularly for immigrant communities. Bhojwani traces how South Asian organizing from the 1990s onward—through organizations including South Asian Youth Action, founded in 1996, and New American Leaders—built civic infrastructure that culminated in Zohran Mamdani's election as New York City's mayor in 2025. She identifies five principles through which nonprofits build belonging: making paths that don't exist, shaping inclusion through language, setting new tables, using organizational voice for advocacy, and bridging communities to government and to each other.
Sources: Nonprofit Quarterly
Nonprofits at America’s 250th: Five Historical Stories Illuminate the Sector’s Enduring Role in Balancing Democracy
Writing for Nonprofit Quarterly's #WeTheCivic series marking America's 250th anniversary, Emily Ball Cicchini examines five nonprofit stories spanning U.S. history to argue the sector's true function is maintaining democratic balance rather than achieving permanent victories. The essay surveys the Underground Railroad networks of the Mosher family in Morrow County, Ohio; Jane Addams' Hull House and its legacy of immigrant assimilation; Sarah Josepha Hale's advocacy for Thanksgiving as a national cultural institution; Planned Parenthood's mission-driven transformations; and the collapse of regional theater, noting the sector cut 29,000 jobs in 2025 with 2.8 million more at risk from ongoing funding erosion.
Sources: Nonprofit Quarterly
Indian Nonprofit Founder Builds Safe Spaces for Youth While Breaking Gender Barriers in Mizoram
Rebek Lalruatdiki Khiangte, co-founder and director of Full Life Access Trust (FLAT) in Lunglei, Mizoram, northeast India, describes building a women-led nonprofit against entrenched social resistance. Founded in 2015 with co-founder K. Zothanpuii, FLAT operates Ka Thiante In—a listening room where young people can discuss mental health and personal struggles without judgment. Khiangte recounts funders questioning whether women could sustain nonprofit work long-term and describes casual sexism in networking spaces. Despite these barriers, FLAT developed a Personal Safety Education Program on child abuse prevention and life skills curricula now delivered to schools and communities across the region, as the organization enters its second decade.
Sources: Nonprofit Quarterly
Curated by JD · samwise.agency
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