By Laura Altieri
Over the past five decades, the United States has experienced more than 20 government shutdowns. While these events have far-reaching implications across various sectors, the nonprofit industry stands particularly vulnerable to the effects. The 2023 State of Grantseeking report highlights that 40 percent of nonprofits nationwide rely on federal grant funding. This places tremendous importance on understanding the critical impact a government shutdown can have on both the sector and the people it serves.
Since our founding in 2007, Grants Plus has partnered with nonprofits to navigate funding over the past four government shutdowns. With this experience, we have identified three common scenarios and outlined practical steps to help nonprofits adjust and continue serving the community when faced with a shutdown.
Scenario 1: Your nonprofit currently receives government grant funding
During a government shutdown, nonprofits need to continue grant-funded work, but can expect limited access to government resources for support. You will likely lose contact with your program officer, so be sure to monitor the agency’s website and your email for updates. While deadlines could change, you should plan for reporting requirements to stay the same.
In the case that a prolonged shutdown occurs, the timing of grant payments and reimbursements could be impacted. Prepare contingency plans – such as reducing discretionary expenses, seeking short-term bridge funding, drawing from endowments, tapping lines of credit, or reallocating resources – to sustain your organization’s operations.
Scenario 2: Your nonprofit is expecting a funding decision
Organizations can expect to receive no notifications about pending grant applications during a government shutdown because there are no active review panels, few program officers reporting to work, and little administrative support to advance pending applications. Further, a shutdown often has ripple effects across the government funding landscape. Timeline changes during the shutdown may impact the release, review, and award of grant opportunities for months to come.
Plan for flexibility with regards to grant seeking resources and tactics. Nonprofits should explore alternative funding options, such as individual donors, foundations, and corporate sponsorships, and honestly convey the human and financial toll of a shutdown to mitigate gaps and delays in funding.
Scenario 3: Your nonprofit is pursuing open federal grant funding opportunities
Proceed as if the application is still due by the stated deadline. Keep a close eye on the federal agency’s website, grants.gov, and email communications for updates about changes, but do not assume that deadlines will be pushed back.
When preparing the application, remember that no government representatives will be available to answer questions or provide guidance. Therefore, expert grant consultants can be especially helpful to follow the funding opportunity announcement’s guidelines as closely as possible and emphasize the impact and value of your proposed project to fulfilling unmet needs of your communities.
Nonprofits and the people they serve can use this painful situation as an opportunity to share their experiences with elected officials, emphasizing the importance of reliable federal funds to solving society’s most critical challenges.
Amidst the backdrop of inflationary pressures and economic uncertainty, a government shutdown only serves to add more turmoil to the nonprofit sector. However, by taking practical measures that prioritize preparedness, flexibility, and honesty – as highlighted in the steps outlined above – nonprofits can bolster their ability to carry out effective grant strategies that serve the communities they work with.
Laura Altieri is an Assistant Director at Grants Plus and leads the firm’s Government Grant Writing services. She and her team have helped to secure over $50 million in federal grant funding for nonprofits across the nation.
