In an op-ed in The Chronicle of Philanthropy, “Trump Funding Cuts Show Why Nonprofits Should End Reliance on Federal Grants,” Philanthropy Roundtable’s Vice President of Policy and Government Affairs Denis Dunn says an increase in government nonprofit funding and decline in private giving can steer organizations away from their mission and values. Dunn also provides guidance on how the philanthropic sector and policymakers can untangle and preserve critical nonprofit independence.
Below are excerpts from “Trump Funding Cuts Show Why Nonprofits Should End Reliance on Federal Grants”:
“Civil society is strongest when it’s rooted in voluntary action — neighbors helping neighbors and communities solving problems from the ground up. Yet today, much of the nonprofit sector is drifting from those roots. Organizations that once thrived on private generosity and civic initiative now find themselves shaped, in large part, by government priorities and funding streams.
“A report by my organization, Philanthropy Roundtable, released last week — Strings Attached: How Federal Grants Compromise Nonprofit Independence — outlines a quiet but growing risk: As public funding increases, the independence and flexibility that make nonprofits effective and trusted begins to erode.”
“The numbers laid out in the report are striking. Nearly one-third of nonprofit revenue comes from federal, state, or local government. In areas such as health, education and human services, the proportion is even higher.
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“Our study found that larger nonprofits are particularly affected. Those with budgets of more than $1 million reported that nearly half their revenue comes from government sources. These organizations are more likely to have the administrative infrastructure to manage complex grants, while smaller, grassroots nonprofits — those closest to the communities they serve — are often crowded out. The result is a more centralized, less diverse, and less representative nonprofit landscape.
“All of this runs counter to the needs of a strong, independent nonprofit sector, which draws its strength from private giving and its legitimacy from the people it serves. Independence isn’t just a philosophical preference. It’s a practical advantage. Independent nonprofits are more likely to take risks, challenge conventional approaches, and adapt quickly to change.”
Please continue reading at The Chronicle of Philanthropy.
