As we reported back in July, uncertainty around federal funding has left many nonprofits rethinking their financial strategies. How can organizations equip themselves for success in 2026 and beyond? How has the One Big Beautiful Bill Act (OBBBA) impacted organizations’ finances? Let’s explore what’s changed and some key strategies to consider. 

What is happening with nonprofit federal funding?

Nonprofit leaders are facing unprecedented financial uncertainty in 2025 and  into 2026 due to rising demand for services, inflation, and delays in federal appropriations that are slowing down reimbursements and grant disbursements across the sector. While these challenges are significant, leaders can take proactive steps to maintain operations and build resilience.

What new challenges has the OBBBA introduced to nonprofit organizations?

Check out our blog, One Big Beautiful Bill Becomes Law: What Nonprofits Need to Know for a comprehensive summary of the provisions impacting nonprofits and their donors. 

When it comes to federal funding challenges, the OBBBA:

• Introduces new reporting and compliance requirements that may require additional administrative capacity.
• Changes corporate giving incentives, which can influence donor behavior and long-term funding strategies.
• Provides opportunities for strategic partnerships and advocacy, allowing nonprofits to align with funders’ updated priorities.
• Encourages organizations to rethink cash flow and reserve strategies, since timing of reimbursements and grants may shift under the new law.

5 Key Strategies to Stay Resilient

1. Engage Your Team

• Involve board and staff in financial planning and scenario discussions.
• Boards can provide legal, financial, and technical expertise.
• Leverage connections to other organizations, donors, community leaders and legislators.

2. Focus on Core Programs

• Clarify what activities are mission-critical versus mission-adjacent.
• Use this clarity to prioritize resources and make tough program decisions.

3. Strengthen Financial Planning and Systems

• Develop scenario budgets and full-cost budgets including fair compensation and operational needs.
• Build cash reserves and diversify funding streams.
• Use tools and training to improve tracking of cash flow, grants, and compliance.

4. Communicate Clearly with Funders

• Share how funding delays impact programs.
• Highlight broader community and economic benefits.
• Seek flexible, multi-year support and explore partnerships.

5. Plan for Risks and Partnerships

• Build contingency budgets for different scenarios and test them with your team.
• Collaborate with other nonprofits, corporations, or government partners to share resources and access new funding.
• Advocate for policies that support stable nonprofit funding.

FAQ

1. How can nonprofits prepare for federal funding delays? Build cash reserves, diversify revenue streams, and develop scenario-based budgets to manage gaps.
2. What should boards do during uncertain times? Engage in financial planning, provide expertise, and help test “what-if” scenarios.
3. How does the OBBBA affect donor behavior? Changes in corporate giving incentives may shift donor priorities, so nonprofits should communicate their impact clearly and pursue flexible support.
4. How can nonprofits make the most of partnerships? Collaborate with other organizations, corporations, or government entities to share resources, advocate for funding stability, and explore joint initiatives.