Nonprofits Face Funding Crisis After Rescue Plan Ends

American nonprofits face a looming funding crisis exacerbated by the loss of the American Rescue Plan Act and ongoing federal, state, and local funding uncertainties, potentially forcing 10% to 20% of organizations to close by 2028. Experts suggest nonprofits should innovate, form strategic partnerships or mergers, and invest in sustaining assets rather than merely cutting costs to survive this shift. Meanwhile, the Bill and Melinda Gates Foundation announced plans to sunset within 20 years, accelerating its $200 billion asset distribution to combat disease and poverty, which could lead to increased funding opportunities but also shift the philanthropic landscape significantly. Nonprofits reliant on Gates funding and similar philanthropy must adapt to this accelerated giving timeline and focus on scalable, tech-driven innovations. Additionally, new legislation, such as President Trump's One Big Beautiful Bill passed by the House, proposes changes affecting nonprofits, including modifications to college endowment taxes and limits on corporate charitable deductions, though some controversial provisions were omitted. These evolving financial and regulatory environments require nonprofit leaders to strategically navigate funding challenges and policy changes to maintain their missions.