How Project 2025 Could Affect Non-Profit funding
Project 2025, developed by The Heritage Foundation, proposes significant policy changes that could substantially impact nonprofit organizations' funding:
Federal Funding Freeze
In January 2025, the Office of Management and Budget (OMB) issued memo M-25-13, initiating a temporary pause on the disbursement of federal financial assistance, including grants and loans, to review programs aligned with diversity, equity, inclusion (DEI), and environmental initiatives. This freeze affected approximately 2,600 federal programs, creating uncertainty and financial strain for nonprofits reliant on federal support. en.wikipedia.org+3en.wikipedia.org+3en.wikipedia.org+3
Elimination of Specific Federal Agencies
The administration's executive order to dismantle several federal agencies, such as the Institute of Museum and Library Services and the U.S. Interagency Council on Homelessness, directly threatens funding streams for nonprofits engaged in cultural, educational, and social services. The removal of these agencies could result in reduced grants and resources for organizations serving vulnerable populations. wsj.com+1politico.com+1
Cuts to Social Programs
The proposed budget includes significant reductions to programs like the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. Nonprofits that provide food assistance, healthcare, and other essential services may face increased demand as individuals lose access to federal benefits, while simultaneously experiencing decreased funding to support these services.
Impact on International Aid Organizations
A 90-day freeze on U.S. overseas aid led major international aid organizations to cut thousands of jobs, undermining their capacity to respond to global crises. This reduction affects nonprofits involved in international development and humanitarian assistance, leading to project closures and diminished global support. politico.com+2theguardian.com+2wsj.com+2
Increased Scrutiny and Potential Defunding
The administration's scrutiny of organizations like NPR and PBS, including investigations into their compliance with federal regulations, signals a broader intent to defund public services. Nonprofits associated with public broadcasting and media may face financial challenges due to potential funding cuts. theverge.com+1en.wikipedia.org+1
In summary, Project 2025's policy proposals could lead to reduced federal funding, increased operational challenges, and heightened uncertainty for nonprofit organizations across various sectors.