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The importance of nonprofits’ work in the United States cannot be understated. In the words of one nonprofit leader CEP interviewed in the fall of last year:
“Nonprofits are the backbone of our communities. We connect people to vital services, nutritious food, healthcare, and access to educational services for children and youth with disabilities. The escalation in negative rhetoric about nonprofits endangers our work. It endangers our staff. And it potentially threatens our services.”
But the U.S. nonprofit sector is in crisis. Yesterday, CEP released a new report in which nonprofits across the country report facing existential threats — simultaneously experiencing significant cuts in funding and increased demand for the services they provide.
This report follows on one released by CEP in March 2025, in which almost 600 U.S.-based nonprofits from CEP’s nationally representative survey panel reported that the political climate was already negatively affecting most of their organizations. Many told us they were concerned not only about their future funding, but also about the communities they serve.
Their concerns are, in yesterday’s report, magnified. One nonprofit leader interviewed in the report emphasized that they “have seen more use of our food pantry than at any other time in our organization’s history.”
The Foundation Response
While foundation leaders believe risk to their own foundation is currently low, they are aware that the nonprofits they fund face a very different reality in the current context and many are responding. The most common response from foundations has been to provide emergency or rapid response grants — for example, by giving out “$1 million in rapid response funding to our current grantees” and taking steps to “unlock $5 million in emergency funds in addition to our regular budget.”
At the time of our data collection, in August and September of 2025, almost a third of foundations also increased their organization’s payout beyond what was originally planned for 2025 to respond to challenges being faced by their grantees.
Most foundation leaders told us that they believe foundations have a significant role to play in supporting the nonprofit sector.
However, the majority of nonprofits, and a sizeable portion of the foundation leaders CEP interviewed, are dissatisfied with the overall response from foundations. One foundation leader sums this sentiment up, saying:
“There’s a lot of [what] almost feels like self-congratulations, of ‘look at us supporting and organizing each other,’ and there is not enough action. I think that [some foundation leaders] are being incredibly brave. But I see that effort as being primarily [in] defense of philanthropy rather than making common cause with a broader nonprofit sector.”
While there is disappointment among nonprofits and foundations alike regarding foundations’ responses (or lack thereof), some foundations aren’t sure about the idea of taking action, or to what end they might act. “We know there’s power in numbers,” one leader told us. “But I think there’s a little bit of a sense of, we don’t know what good it’s going to do.”
Others express uncertainty about whether it’s appropriate for institutional philanthropy to show a strong response to the current context at all, with one foundation leader saying “we reject that urge [to take a strong side] because we think it’s important to maintain voice with both sides of the aisle.” This leader goes on to say that they’re “not going to sit around throwing fireballs even though, honestly, that’s what’s rewarded in the foundation field right now.”
What Can Funders Who Do Want To Act Do?
How can funders support the organizations that carry out vital work? The nonprofit and foundation leaders that CEP surveyed and interviewed offered suggestions for how foundations can best help in 2026:
Be bolder and more outspoken in advocating for the nonprofit sector. One nonprofit leader explains the uncertainty that comes with funders who remain silent:
“A lot of the funders that we have received support from in these last eight months have been really quiet in ways that felt really scary, not knowing what they were going to do or how it was going to affect the funding to their grantees. That silence really had a chilling effect on our ability to plan, our ability to know who had our backs.”
Provide capacity-building support to the organizations foundations fund. “Having support from a foundation partner to navigate these challenges, especially pro bono legal advice, would be tremendous,” said one nonprofit leader. Another explains that:
“[M]any rural, community-based nonprofits lack access to professional grant writers, data analysts, or compliance specialists. Foundations can offer or underwrite technical support, shared back-office services, and training that strengthen long-term organizational capacity beyond any single grant cycle.”
Strengthen communication with grantees. Nonprofits ask that foundations “build relationships with those being funded to truly understand the impact and opportunities. The more trust that is built, the further both funder and agency can grow.” They also request that they “talk with us directly. Ask what we need and ways they can help. Don’t speculate about what we’re facing. Sit and talk with us.”
The future of the sector is still uncertain — and new challenges are on the horizon. But ultimately, we found elements to be encouraged by in this new data. Despite significant and ongoing threats to their funding and work, many nonprofits tell us they remain completely committed to living up to their organization’s long-standing mission, values, and goals. As one leader shared with CEP:
“When I look around and see what people are doing in our local community, it gives me hope. And it gives me hope from the commitment that we all have to each other to do good in the world. That reinforces the work that the team is doing. [We] share that with others when we have successes. And it’s a message of hopefulness, but also of steadfastness in our mission [and] in our commitment to that mission.”
In 2026, CEP looks forward to continuing to collect data on how nonprofits and foundations are thinking about and responding to the myriad challenges facing the social sector.
Ellie Buteau is director of research projects and special advisor on research methodology and analysis on the Research team at CEP. Seara Grundhoefer is a senior analyst on the Research team at CEP. Find her on LinkedIn.
Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.
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