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What Funders Can Do in the Face of Federal Policy Chaos

February 26, 2025

By Heather Iliff, CEO and President, Maryland Nonprofits

Nonprofits providing communities with vital services are being undermined as the federal government has issued stop work orders, pauses on disbursements, confusing guidelines and reckless actions with seriously harmful consequences.

As philanthropy navigates this landscape, we understand that the size of federal government funding for nonprofits could not be replaced by philanthropic resources. Yet, funders are eager to support nonprofits in this crisis. Based on input from nonprofit leaders and funders responding to the situation, the following are some ways philanthropy can support nonprofit missions, sustainability and leadership.

Make No-Cost Shifts to Existing Funding

  • Convert restricted grants to general operating
  • Suspend or cancel grant report requirements
  • Remove requirements for renewal proposals – automatically renew grantees
  • Speed up payments – i.e. fund the entire grant amount now rather than in multiple installments

Step Up Resources in the Present Environment

  • Provide emergency grants
  • Provide cash-flow loans
  • Support coalitions, organizations that engage in advocacy, and infrastructure organizations
  • Provide general operating support
  • Increase your payout amounts

Use Your Words and Connections

  • Put your brand behind your values in visible ways.  Don’t hide your commitment to diversity, equity and inclusion out of fear.
  • Engage your board in being vocal and supportive of nonprofits you are serving and of your mission
  • Promote your grantees in social media
  • Make connections to resources, including legal support, other potential donors
  • Provide cover to nonprofits that may be targets for stop work orders or lawsuits.  Remove qualifying information about your grantees from your websites.
  • Offer care and empathy for nonprofit leaders facing cash flow problems, staffing shortages, and other challenges that may be impacting the organization’s performance on their grant with your organization.