Federal Funding Cuts and Policy Changes: A Warning to Nonprofits
The nonprofit community faces two unprecedented threats from the federal government that deserve your attention and your action.
First, the federal government has cut funding to programs on which many nonprofits rely to serve their clients. Cuts that began last year have continued – and threaten to grow. Remarkably, a study conducted by Give.org in September 2025 reports that only one-third of Americans realize that these cuts hurt safety net programs run by nonprofits. You need to educate your donors, constituents, and neighbors.
Here at Wastyn & Associates, we have sought to understand the direct impact of these cuts by sending periodic surveys. Those surveys have consistently found that about half of Quad City nonprofits have already experienced serious or minor financial impacts from federal funding changes, with 75% expecting some level of impact if they have not already.
As a results of these cuts, 60% of these organizations say they may have to cut or change programs, and 1 in 4 anticipate staff layoffs or furloughs — on top of those who already have. With nonprofits contributing approximately 5.2% of the national GDP — and approximately $1.8 billion in economic activity in the Quad Cities alone — the stakes extend well beyond any single sector.
Those numbers mirror what nonprofit leaders across the country report. From rural health systems to urban community action agencies, organizations everywhere face program cuts, staff reductions, and impossible choices.
And the funding cuts just keep coming. The proposed FY27 federal budget outlines even more cuts – $2.7 billion from higher education programs; $5 billion from HRSA, SAMSA, and the CDC; $3.3 billion from Community Development Block Grants; $393 million from Homeless Assistance Programs; and $1.3 billion from HOME grants, just to name a few.
Tell your Congressional representative that these cuts will hurt real people in their districts and hurt the economy for all of us.
Now a second, new layer of threat has arrived. On May 29, 2026, the U.S. Office of Management and Budget proposed sweeping changes to the Uniform Guidance — the foundational rules governing how federal grants flow to nonprofits, local governments, and other grantees nationwide. If enacted, these changes will rewrite the rules of eligibility, oversight, and accountability in ways that could permanently shift power away from communities and strip dollars from states and nonprofits.
Among the more egregious proposed changes, grants would undergo review by political appointees to ensure they advance the President’s policy agenda, a standard that ignores community need, evidence-based practice, or congressional intent. Agencies could also terminate active awards mid-performance without notice or appeal. Reimbursement-only payment structures could force nonprofits to front all program costs while awaiting federal repayment that may never arrive. Protections for language access, racial equity, and underserved communities face elimination. For some organizations this means inconvenience; for others, it spells doom.
You can make your voice heard. The National Council of Nonprofits urges every organization to take 3 actions:
Sign the national letter written by The National Council of Nonprofits
Submit a public comment before July 13, 2026 – or come to one of our Comment Writing Parties
Email your opposition to your members of Congress. Quad Cities nonprofits can find the contact information for their representatives through OneTable QC; others can find them at the official U.S. Congress website
The Project, OneTable QC, and the Quad Cities Community Foundation will host a Comment Writing Party for the proposed Uniform Guidance changes on July 7 from noon–1:30 PM at the Community Foundation, 852 Middle Road, Suite 100, Bettendorf — and virtually on July 7 from 4:30 – 6 or July 9 from noon-1:30. All are welcome. Sign up here.
Congressional outreach and the public comment process present two of the most direct and democratic forms of civic participation available to any organization or individual. As a citizen, you have every right to submit a comment about planned legislation. Your nonprofit status also allows you to educate members of Congress and federal agencies.
Make your voice heard. Every comment counts.
