Federal Cuts could Hurt Nonprofits

With federal dollars accounting for over one-third of total nonprofit sector income, cuts in various federal programs over the next five years are expected to hurt the fiscal health of nonprofits. A recent study shows that federal programs linked to nonprofits will likely be cut between $40 and $70 billion in the next five years, and private charitable giving will have to increase two to three times its current rate to offset the reductions. While deductions in housing, employment, education, and social services programs will inevitably increase demand for nonprofit services, the study suggests the sector will be unable to handle the demand due to the overall decline in federal funding.