The role of government is being redesigned. It is comically safe to say the architects of this redesign do not know how our government works or what it does for Americans and people the world over.
However, the chaos and redesign by a blunt instrument are nothing compared to what will likely happen when Congress needs to come up with a federal budget. The administration’s priorities are already becoming apparent (think Project 2025) with the initial budget outline that the house speaker is all giddy about.
March is Next Month!
This budget is the warmup to the big show, a likely government shutdown. I don’t think there is a scenario where the Senate Democrats yield to a budget that is so heartless and cruel. The voters who supported Donald Trump, for the most part, hoped he would bring the cost of living under control. Instead, they may get inflationary tariffs and tax cuts for the top 5%.
I predict a government shutdown. Some in the administration welcome this scenario and, perhaps, designed the Republican budget to spark it.
The Cascade
Much has been written about how nonprofits can prepare for the immediate budget siege, but not much addresses a government shutdown. There is no silver-bullet solution. The cascade of intended and unintended consequences of a shutdown will swamp most nonprofits.
Any funds received from government sources will be negatively affected. The donor pool of smaller donors will contract even more, the wealth of affluent donors will eventually increase, and there will be much more competition for their philanthropic support.
Operating Reserves
This moment embodies the argument for nonprofits to build up operating reserves to have more options to weather such storms. Healthy nonprofits have at least half of annual operating expenses in reserve.
Whatever your reserves, I implore nonprofit leaders to factor your reserve fund into your mitigation planning. Times like these force the wise and compassionate use of your liquid assets to help you reimagine fulfilling your mission.
Photo by Thiébaud Faix