The D.C. area was hit the hardest by federal layoffs and that greatly impacted the amount of people turning to nonprofits for help.
But those nonprofits themselves saw major cuts to the amount of federal funding they received, with some seeing all of it disappear.
Laura Tomasko, senior policy program manager at the Urban Institute, said her organization’s new analysis looks at how D.C.-area nonprofits fared and what could happen next.
“Nonprofits not having access to funds they were counting on could mean a disruption to their ability to carry out their mission,” Tomasko said.
Their analysis shows 43% of nonprofits in the D.C. area reported experiencing a disruption to their government funding, compared with 33% of nonprofits nationwide.
“These findings suggest a potential for a perfect storm with job losses in government and other sectors like nonprofits that are making finances tighter for people already squeezed by the high cost of living in a region affected by an affordability crisis, and nonprofits might be less equipped to meet the growing demand due to government funding disruptions,” she said.
And with the D.C. region being one of the most expensive places to live in the U.S, she said 2026 could be tough for many of the nonprofits hit by these cuts.
“Our research shows the ripple effects of disruptions to nonprofits’ government funding on a myriad of factors — employment opportunities, affordability and demand for nonprofit services in the greater D.C. region,” Tomasko said.
Their analysis also showed 21% of nonprofits headquartered in the D.C. region reported they had decreased their total number of employees in the first four to six months of the year, compared with only 15% of nonprofits nationwide.
“It could mean food not being able to be delivered to seniors. After-school tutoring programs having to reduce the number of students they serve, or hotlines not being able to field as many calls from people experiencing mental health crises,” Tomasko said.
For some nonprofits, she said this could mean having to find funding elsewhere to keep functioning in the community.
“And what happens from here is a great opportunity for nonprofit leaders, philanthropists, state and local policymakers, to come together and to craft solutions to figure out how best to meet rising demand in the area,” Tomasko said.