What do Johnson & Wales University, Head Start, WaterFire, Amos House, and organizations that provide thousands of Providence residents with food, shelter, workforce training, education, and other services have in common?
They’re all nonprofits. And they’re under attack.
Recent executive orders by the Trump administration are touching off fear and uncertainty among nonprofits in Providence and other cities across the country. The fear is justified: Just weeks after the inauguration in January, the administration issued an executive order freezing federal funding for nonprofits. Diane Yentel, CEO of the National Council of Nonprofits (NCN) calls these efforts a “coordinated assault on civil society and democracy.”
Although public outcry and lawsuits were successful in quashing this initial salvo, the administration has made it clear that it will continue to seek to reduce or eliminate federal funding for nonprofits totaling several hundred billion dollars.
Much of this funding comes in the form of government grants or contracts for nonprofits providing vital services and programs essential to preserving the safety net in their communities. This system is the result of attempts to scale back the size of the government during the past few decades, leaving government agencies to hire nonprofits to do much of their work. Exact numbers are difficult to nail down, but it is estimated that Rhode Island nonprofits receive around $1 billion in these kinds of government grants and contracts, with those in Providence, Kent, and Newport counties receiving the most funding.
To say that many nonprofits would cease to exist without this funding is putting it mildly. According to a recent study by Candid and the Urban Institute, about a third of nonprofit government grantees rely on these grants and contracts for more than 50% of their total revenue.
That’s particularly true for organizations delivering health care to low-income families, housing for the homeless, services in case of abuse and neglect, support for immigrants and refugees, food and job training, and “other services that are critical to keeping the social safety net in Providence and the state strong,” says Tanja Kubas-Meyer, executive director of the Providence-based Rhode Island Coalition for Children and Families (RICCF) whose 44 member organizations provide front-line child and family services and collectively advocate for state and federal resources that meet child wellbeing as well as family safety and support needs.
Shannon Carroll of Genesis Center, which provides education and workforce training to marginalized populations in Providence, points out that despite nonprofits’ reach and impact, there is still a surprising lack of awareness about what they do, why they’re important, and the devastating impact federal or state budget cuts have on their work. “Federal grants are investments in our community organizations—hospitals, schools, libraries, and other institutions that a lot of people don’t realize are nonprofits,” Carroll notes. “The services we provide are important to building a strong local economy that depends on people being able to speak English and have the skills required to get a job.”
As reported in The Boston Globe, Farm Fresh RI is yet another nonprofit that serves people in need that is experiencing nearly $3 million in USDA cuts. That will affect over 100 small farms and businesses that provide fresh, locally grown food to Rhode Island schoolchildren, food banks, and low-income families. Without this funding, many of these farmers face an uncertain future, wondering how they will sell their produce and sustain their businesses.
Nonprofits working with immigrants and refugees and LGBTQ people have been especially concerned about losing the protections they once had under previous administrations. Now, they and others that diverge from the current administration’s ideology on immigration, race, and gender identity are on high alert.
Teddi Jallow, Executive Director of Refugee Dream Center in Providence, told The Public’s Radio that it has already lost federal funding and laid off some of its staff members as a result of the State Department’s suspension of all refugee settlement programs. An interviewee for this article from another nonprofit that serves immigrants and refugees was unwilling to provide their name for this story because of concern that they’d have their funding rescinded. “There’s a palpable fear among the people who we’re helping,” they said. “Where will they go if we’re not here to help them?”
Some RI nonprofits are fighting back with lawsuits. A group of Rhode Island environmental nonprofits has joined with other national groups to sue the Trump administration over a funding freeze that’s forced them to halt projects and consider staff layoffs. One of the groups leading that effort is the Woonasquatucket River Watershed Council, (WRWC), which has had to stop an urban forest project along the Woonasquatucket Greenway and disrupted its operations, the suit says. In a report from the Providence Journal, Alicia Lehrer, Executive Director of WRWC, they were slated to funding from the Hispanic Access Foundation, one of the groups selected by the U.S. Forest Service in 2023 to oversee $25 million in funding for Nuestros Bosques, or Our Forests, a program designed to enhance the tree canopy in underserved communities around the country.
Recently, Rhode Island Latino Arts, The Theater Offensive, National Queer Theater, and Theatre Communications Group filed a court case to challenge an executive order that challenges the Trump Administration’s attempts to halt federal support and funding from the National Endowment for the Arts (NEA) for organizations that “promote gender ideology.” Those grants are essential to arts groups’ ability to put on performances that involve LGBTQ actors and storylines.
It may be hard to believe this financial crisis could get any worse, but it’s occurring at the same time that billions in funding from the American Rescue Plan Act of 2021 (ARPA) to help nonprofits provide COVID-related services is ending. Nancy Wolanski, Executive Director of the Alliance for Nonprofit Impact, a nonprofit resource center housed at United Way RI, says “the end of this funding, coupled with state budget deficits and severe cuts at the federal level, are leaving nonprofits on a fiscal cliff, forced to shut down vital programs or close their doors altogether.”
A recent Alliance-commissioned survey of 265 Rhode Island nonprofits (nearly half of which were Providence-based) substantiates that concern. The survey found that fewer than 25% of organizations who received ARPA or other governmental supplemental COVID funding have secured replacement funds. At the same time, 65% said the need for their services have increased since COVID, leaving a huge funding gap that will be almost impossible to close, Wolanski says, without “some creative thinking about new revenue streams like increased fees for services or social enterprise ventures.”
To help stem the bleeding, a growing number of foundations and other donors are stepping up to provide resources in response to this crisis. In late March, the Rhode Island Foundation announced that it is deploying $3M in emergency funds to help nonprofits weather federal funding freeze and cuts. It’s also asking the public to contribute. President and CEO David Cicilline said these funds are responding “to the many nonprofit organizations that were telling us they are struggling with interruptions in the payment of federal grants or outright elimination of federal funding and contracts, which threaten to undermine their work to improve the lives of Rhode Islanders.”
The United Way of Rhode Island is also doubling down on its support for nonprofits by expanding their grantmaking, as well as offering legal supports to help nonprofits navigate the new regulatory environment, assistance in fund development and revenue generation, and financial management. “It’s been dizzying to try and keep up with the barrage of funding and policy shifts coming out of Washington, but one thing is certain: what’s being targeted would be devastating to nonprofits…. You cannot have strong families and strong communities without also having strong nonprofits,” says Cortney Nicolato, United Way’s President and CEO.
While these funds are an essential part of nonprofits’ financing, Cicilline acknowledges that “the magnitude of potential federal funding decreases and continuing service demands will create a financial void that cannot be filled by philanthropy alone.” Wolanski agrees: “Closing this massive funding gap will be enormously challenging for most nonprofits, to say the least. Yes, foundation grants and individual donations will help provide a critical stopgap measure during this crisis, over the long-term, these organizations will have to find new sources of revenue. What’s clear is that nonprofits don’t have the luxury of waiting.” Shannon Carroll, for example, says the Genesis Center has already begun to explore new funding streams, including reaching out to corporations and engaging in social enterprise ventures.
Tanja Kubas-Meyer says RICCF nonprofit members are heavily engaged in educating legislators about the impact of the cuts, doing scenario planning, and assessing the strategies they can use to keep going alone or in partnership with others. In the face of these cuts, Jammat Housing, which runs Turning the Corner Residential Treatment programs, is doing scenario planning that is preparing for the potential closure of these programs. That, says Lauri Smalls, Executive Director of TCRT and RICCF’s chair, “would have a devastating impact on some of the state’s most vulnerable youth.”
Smalls also warned that over 100 employees providing crucial therapeutic and rehabilitative services would lose their jobs, and the state would lose its only emergency assessment center for juvenile males. “This isn’t just a fiscal issue—it’s a humanitarian and public safety crisis in the making,” Smalls said. “The dismantling of this infrastructure would leave a gaping hole in the continuum of care and jeopardize years of progress made in youth rehabilitation and community protection.”
What won’t be helpful right now, Wolanski says, is for funders to “give into the temptation to take a wait and see approach—to see who’s still standing after all this and then make investments. Funders and all Rhode Islanders need to see that nonprofits are too important to lose and do what’s necessary to support them.” Not doing so, says Carroll, ignores the fact that nonprofits drive the local economy. “We’re taking people on public assistance and turning them into taxpayers. Poverty is seen as an individual problem, but it affects us all.” About 17% of the Rhode Island workforce is employed by a nonprofit, Wolanski says. “If you don’t have this, the economy collapses.
But nonprofits do much more, Wolanski notes. “When people think about nonprofits, they tend to think of food banks, homeless shelters, and disaster relief. Those are extremely important but they’re only part of what nonprofits do. They’re the organizations providing arts and culture, preserving open spaces, ensuring affordable places to live, and helping our kids to thrive and reach their potential. These are all things we want to be a part of—a thriving healthy community. All of this is provided by nonprofits.”
RESOURCES
National Council of Nonprofits – Provides information on every aspect of nonprofit sector and nonprofit organizations at the state and national levels. A chart outlining all executive orders and their impact on state and national nonprofits is here (updated continuously).
Alliance for Nonprofit Impact (RI) – Rhode Island’s nonprofit resource hub that supports nonprofit staff, strengthens nonprofit organizations, and improves the ecosystem in which nonprofits work.
Tracking Federal Actions Impacting the Nonprofit Sector (updated continuously)
What to Do if Your Federal Government Grant or Contract is Cancelled
Interactive Tool: Financial Risk of Nonprofits Losing Government Grants?
DATA: Government Grants and Contracts for Nonprofits – 2023 Data
12 Urgent Financial Action Steps for Nonprofits: A 2025 Checklist
Cynthia Gibson, Ph.D. (www.cynthesisconsulting.com), is principal of Cynthesis Consulting, which provides strategic planning, program development, evaluation, and communications assistance to hundreds of US and international philanthropic institutions and nonprofits. She is also a writer whose many publications on philanthropy and the nonprofit sector, civic engagement, democracy, education, and other issues have influenced public discourse and policy change.
