Tracking Federal Policy Changes and Their Effects on Nonprofits
March 18, 2026
In January 2025, changes in federal policy caused significant disruptions and
challenges within the nonprofit sector. That same month is also when we officially launched the Goodman Nonprofit Center at Madison Community Foundation. As we worked to get the Center off the ground, we wanted to collaborate with others to stay informed about all these federal changes and their effect on our local nonprofit community.
Measuring the Impact
One such effort, together with United Way of Dane County, was to engage UW-Madison’s Center for Community and Nonprofit Studies (UW-CommNS) to track and compile these changes, and to survey organizations about how they’ve been affected. You can find results from UW-CommNS’ work on their website, and they continue to track developments.
In the February 2026 Executive Summary of the project thus far, the UW-CommNS researchers note important effects not just on nonprofits but on the communities they serve. Some local nonprofits did lose funding. Even for those who didn’t, the multiple rounds of halting and releasing of funds, loss of key relationships with government staff and concerns about targeted attacks on nonprofits created deep uncertainty (if not moments of chaos).
Government Funds Play an Important Role
For those who may wonder about the importance of government funding, nationwide grants and contracts from government comprise more than 30% of nonprofit revenue. Fees for service make up 50% of revenue, philanthropy accounts for roughly 15%, and investments and other miscellaneous income make up the remaining income.
In addition to the direct role government funds play, changes to funding in other areas can have a large impact on nonprofits by affecting the demand for services. The reductions to food assistance (SNAP), restrictions on access to healthcare (Medicaid and other programs) and changes to immigration enforcement that were part of the budget passed in late 2025 all lead to increased challenges for community members and therefore drove up demand for services from nonprofits.
Throughout the year, we spoke directly with leaders who were having to create widely different budget projections because of the uncertainty of key federal grants, facing potential budget cuts of 10% to 40% of their revenue. Other leaders talked about closing childcare facilities for low-income families because there were no government workers to distribute previously appropriated funds. Leaders of human services organizations repeatedly emphasized the uptick in demand for their services and how these changes have caused a sharp increase in stress for a sector already stretched thin.
This research helps provide additional detail to what we’ve been hearing; namely, that this is an especially challenging and head-spinning time for our nonprofit community. As we continue to partner with others in the Madison area, like UW-CommNS and United Way to stay informed and listen to the community, we will be working to share information and provide support. And we encourage others in the community to do so as well.
Offering Ways to Connect and Learn
The Goodman Nonprofit Center will be ramping up programming soon to offer additional workshops, trainings and opportunities for those in the sector to connect. Applications for the second cohort of the Goodman Nonprofit Fellowship, a leadership development program for current executive directors, are now open. We will also be using this blog and other methods to share updates on resources and opportunities made available by others, such as those listed below.
If you know of additional resources that would help nonprofits navigate these challenging times, please reach out to us at gnpc@madisongives.org or call us at 608-232-1763.
Resources and Upcoming Workshops
Propel Nonprofits is providing free office hours (30- to 50-minute time slots) to help nonprofits across the Midwest with questions about finance, governance and strategy. Based in Minneapolis, Propel is a federally certified community development financial institution (CDFI) that provides a range of capacity-building services and access to capital. For more information and to sign up, visit: https://propelnonprofits.org/services/office-hours/.
UW-Extension is delivering a five-session webinar series on the basics of Nonprofit Fund Development and Donor Relations beginning on April 1. This is part of their statewide nonprofit program offerings for new and smaller nonprofits. The cost is $75 for the full series. To register, visit: https://eventreg.wisc.edu/en/5f4YRxR7/g/extension/level-up-your-fundraising-5a2TQr1CAPd/overview.
Scholz Nonprofit Law has posted recordings of past webinars on topics such as how nonprofits can engage in advocacy and the legal and organizational processes for mergers or dissolutions. You can find these resources here: https://scholznonprofitlaw.com/resources/.
Mission Forward is running a three-part board development workshop online this April, designed in partnership with UW Extension. Participants are encouraged to attend with members of their Executive Committee or fellow board members. The cost is $99. For more information and to sign up, visit: https://missionfwd.thrivecart.com/nonprofit-board-leadership-training/.
Madison College is offering a free one-hour session on AI for Small Business Marketing on April 23. The workshop aims to help small businesses (including nonprofits) “turn data into actionable insights, use customer reviews to build trust, and strengthen their marketing plan.” For more information on this program, or to register, visit: https://lp.constantcontactpages.com/ev/reg/uyb2cdz.
Nonprofit Vote and National Council of Nonprofits have created a Nonpartisan Voter Engagement Guide. This tool provides “a roadmap of how charitable nonprofits can effectively engage in elections on a nonpartisan basis, leverage networks for greater impact, and build relationships with elected officials.” Access the guide at https://www.councilofnonprofits.org/nonprofit-nonpartisan-voter-engagement-guide.
