Over the past year, volatility and uncertainty have become defining features of the nonprofit landscape.
Federal and state policy shifts, the cancelation of critical federal funding, delayed reimbursements, the unwinding of pandemic-era supports, and rising operating costs are converging. For many nonprofits, these pressures are no longer episodic; they shape everyday decisions about staffing, services, and sustainability.
As these trends were coming into focus in early 2025, Episcopal Health Foundation (EHF) was also in a period of transition. As we began implementing our new Strategic Framework, we chose to focus on community-based and comprehensive health care services and enrollment in health coverage and public benefits. These areas were already seeing the effects of policy and funding changes put in place by the new federal administration. As we navigated our pivot and tried to make sense of unexpected policy and funding changes, listening to grantee partners became a practice in stewardship and is now central to our work.
Listening in a Moment of Instability
As EHF moved into the summer, we were preparing grantmaking decisions in areas already showing signs of strain. We were following national reporting and peer research pointing to funding volatility, delayed payments, workforce pressures, and rising costs across the nonprofit sector. At the same time, our own interactions with grantee partners offered glimpses of disruption, important signals, but fragmented and incomplete.
What we lacked was a timely, grounded understanding of how these forces were shaping day-to-day decisions across our grantmaking portfolio, and how they were affecting the services communities rely on. We were mindful that nonprofits were operating under significant stress.
Rather than launching a time-intensive request, we invited grantee partners to share with us the impact of federal changes on their organizations, clients, and communities. Participation was optional. The survey was brief. Follow-up conversations were offered, not required. Our aim was to learn in ways that could guide EHF’s grantmaking and inform our policy work, while remaining attentive to the burden placed on grantee partners.
In total, we heard from dozens of grantee partners across EHF’s 81-county service area in Texas, including health care providers, benefits enrollment organizations, and other organizations focused on non-medical drivers of health. A smaller group of Federally Qualified Health Centers also participated in deeper financial conversations.
What emerged from those conversations was sobering.
“It feels like every day some new development is coming in, and it feels like we’re doing a lot of mental gymnastics. And every time we think we’ve come up with a valid plan to address whatever the obstacle is before us, the next day that really good idea is now not a good idea. We have to pivot again. I’m just trying to paint the picture around this constant need to pivot, this constant place of being in limbo.”
— Health Services Grantee Partner
Widespread, Layered Funding Losses
Nearly all participating grantee partners reported unexpected funding reductions or delays in the first half of 2025. These losses were rarely confined to a single source. Instead, organizations described multiple funding streams shifting at once: federal dollars ending or slowing, state reimbursements lagging, philanthropic support becoming less predictable, and earned revenue declining.
Among this group—a focused subset of 54 existing grantees rather than a representative sample—the median reported budget reduction was approximately 10 percent, representing more than $123 million in cumulative losses. Federal funding accounted for the largest share of these reductions. At the same time, many emphasized that instability in philanthropic support felt just as consequential.
“It’s not even about the threats of funding being cut. It’s the unknown and the lag of time it takes when you’re trying to make business decisions for an organization looking six months to a year ahead.”
— Health Care Services Grantee Partner
When Delays Become Destabilizing
About half of participating grantee partners reported delays in funding, particularly for reimbursement-based federal and state programs. In many cases, reimbursements that once arrived within days were now taking weeks, and sometimes more.
For organizations carrying high fixed costs, timing alone became destabilizing. Even grantees that had not yet experienced permanent funding losses described the delays as a source of strain. Planning, hiring, and committing to future services became harder.
“You’re having to carry those costs for 30 to 90 days, and we’re talking about multi-millions of dollars. That adds up very quickly.”
— Health Care Services Grantee Partner
Rising Costs, Fewer Buffers
Meanwhile, funding delays and reductions collided with the end of temporary pandemic-era supports. An internal survey found that many of EHF’s grantee partners, particularly Federally Qualified Health Centers, used one-time COVID-era funds to stabilize staffing, maintain wages, and expand capacity during a period of extraordinary demand. Those funds largely expired in 2024.
What remains are higher, structurally embedded operating costs without corresponding long-term or policy-aligned revenue streams. Several grantees described this moment as one of growing misalignment between the cost of delivering care and the funding structures now available to support it.
Adaptation Has Consequences
Grantee partners are responding in multiple ways to remain viable. On average, they reported taking four actions to address the uncertain and quickly changing environment: using reserves, freezing hiring, reducing or restructuring programs, seeking emergency or bridge funding, and pursuing new earned revenue streams.
These adaptations carry real tradeoffs. Time spent on contingency planning and financial restructuring is time diverted from mission, even as demand for services rises. Workforce morale is increasingly strained as layoffs, benefit reductions, and the elimination of professional development become more common.
“Our management team, from the executives all the way to the front-line supervisors, have faced ongoing stress over the last year: trying to help the center increase revenues, reduce expenses, while at the same time trying to keep up the morale of their teams. They are weary.”
— Health Care Services Grantee Partner
Eroding Confidence—and Ripple Effects
Looking ahead, most grantee partners expressed limited confidence in their ability to maintain current service levels, even in the near term. Many anticipate further funding reductions, while others remain uncertain about what the future will bring.
Organizations that focus on enrolling Texans in health-related benefit programs described rising demand paired with shrinking eligibility thresholds, driven in part by recent policy changes and the expiration of enhanced federal subsidies for Affordable Care Act (ACA) health insurance. As eligibility narrows, fewer families qualify for services known to improve health and stability.
A recurring theme across conversations was interdependence. Even organizations without direct funding cuts described ripple effects as partners reduced services, closed programs, or exited communities altogether. Because health care, benefits enrollment, and other social services are deeply interconnected, instability in one part of the system quickly reverberates across others.
“There are so many partnerships in place that if one partner is impacted, it impacts others downstream. The uncertainty we are facing is so intersectional, it’s almost like trying to play whack-a-mole.”
— Enrollment Services Grantee Partner
What This Asks of Philanthropy
For EHF, what we heard shaped grantmaking decisions in fall 2025. We accelerated grants to organizations supporting ACA enrollment, increased the use of general operating support—where most of our funding is typically project-based—and funded revenue-generating initiatives at a higher rate than in prior years. Listening early also positioned us to respond more quickly to rising food insecurity following federal SNAP disruptions.
More broadly, it prompted reflection on a question many funders are facing: in periods of instability, how do we balance our role as innovators and systems-change partners while also being a steadying force amid disruption?
Taken together, what we heard points to structural, not merely temporary, disruption across the health care and public health ecosystems. These pressures are not isolated to single organizations; they are reshaping the conditions under which care, coverage, and basic supports are delivered.
For philanthropy, several tensions arise.
Philanthropy occupies a rare and privileged position, with the ability to hold a long-term vision. Yet it must still wrestle with how that vision is carried forward when short-term disruptions strain the systems communities rely on.
The role of stabilizer grows more complex in deeply interconnected systems, where an individual investment may remain intact even as the surrounding ecosystem begins to fray.
Listening more deeply during periods of uncertainty also carries weight. By asking questions and inviting conversation, there is a moral responsibility to respond, alongside an honest reckoning with how difficult that response can be, especially when acting with courage can be met with resistance.
“It is very likely that not all nonprofits are going to survive. There needs to be key institutions that can wrap their arms wide and make sure the impact on our communities is lessened.”
— Behavioral Health Grantee Partner
Reflection: Listening as a Form of Stewardship
In moments like this, listening is not passive, nor is it simple. Practiced as stewardship, listening asks us to stay with complexity and tension, to hold long-term vision while sitting with immediate disruption, and to remain close to lived experience even when the path forward is unclear. It calls for recognition of how deeply interconnected these systems are, and for carrying the weight of what we hear with humility and care, especially when responding requires courage amid uncertainty.
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