Government shutdown and nonprofits: what you need to know & how to stay funded

When the federal government shuts down, it’s not just lawmakers who feel the pressure — it’s the nonprofits on the ground doing the work of feeding, housing, and caring for communities every day.

Federal shutdowns — whether partial or full, past or future — can create significant uncertainty. But with the right tools and strategies, your organization can stay financially resilient and mission-focused.

What is a government shutdown?

In the United States, a government shutdown happens when Congress fails to either pass funding legislation for the upcoming fiscal period or reach a temporary agreement (a continuing resolution). Without legal authority to spend money, many federal operations shut down. Agencies pause services, furlough employees, and delay payments.

What agencies are affected by a government shutdown?

Any federal agency can be affected — but certain ones have historically seen greater disruption during shutdowns. These include:

• Department of Health & Human Services (HHS): Delays in grant reimbursements can affect nonprofits offering public health services, maternal care, and mental health support.
• Department of Housing & Urban Development (HUD): Funding interruptions can delay rent subsidies, housing vouchers, and support for homeless services.
• Department of Education: School meal programs, early childhood education grants, and special education funding may be delayed.
• Environmental Protection Agency (EPA): Environmental justice grants and community health initiatives can be paused.
• Small Business Administration (SBA): Delays in nonprofit loans and community development funding.
• National parks, museums, and cultural institutions: These closures can affect tourism-driven nonprofit programming.
• Grant-making agencies like Department of Labor: Workforce development programs and volunteer service projects may be interrupted.

If your nonprofit partners with or receives funding from any of these agencies, expect slower communication, stalled grant processes, and funding gaps.

Who does not get paid during a government shutdown?

Federal workers deemed “non-essential” are typically furloughed and do not receive pay during the shutdown period. Contractors and nonprofits operating under federal agreements may also see payment delays, especially for services already rendered.

How do government shutdowns affect nonprofits?

When government services pause, nonprofits step in to fill the gap. However, during a shutdown, many nonprofits face:

• Disrupted programs and delayed reimbursements
• Communication breakdowns with furloughed grant managers
• Increased demand in areas like housing, food, and health
• Additional financial and emotional stress on nonprofit staff and infrastructure

How to prepare your nonprofit for a government shutdown (checklist)

These steps from the National Council of Nonprofits can help your organization stay proactive and prepared.

1. Assess impact on federal grants and contracts

Start by understanding how a shutdown might affect your existing federal funding and reporting requirements. Clear documentation now can help your organization recover faster later.

• Review grant terms for performance obligations and delay clauses
• Document outreach to federal contacts (in case they’re furloughed)
• Track program activity in case reimbursements resume post-shutdown

2. Monitor and protect your cash flow

Cash flow is critical during uncertain times. Take proactive steps to forecast, preserve, and stabilize your organization’s finances.

• Review your budget and estimate how long reserves will last
• Delay non-essential expenses and re-forecast your cash runway
• Explore short-term funding options (bridge loans, community foundations, individual donors)

3. Adjust programs and operations

Evaluate which programs are essential and where you can temporarily scale back. Focus resources on maintaining your mission’s most vital work.

• Prioritize core services and community impact
• Coordinate with local partners to cover gaps
• Scale or pause non-essential programs temporarily

4. Communicate transparently and often

Keep your stakeholders informed. Open, consistent communication builds trust and can rally support during uncertain periods.

• Use email, your website, and social media to share updates
• Let funders and stakeholders know how the shutdown is impacting you
• Keep staff and volunteers informed

5. Step up advocacy efforts

Your voice matters — especially when public services and community programs are at stake. Engage in collective advocacy to highlight nonprofit needs.

• Contact your representatives and urge them to support bipartisan solutions
• Share how the shutdown is impacting your work and your community
• Join other nonprofits in coalition letters, press efforts, and policy briefings

6. Support your team

Your staff and volunteers are your organization’s backbone. Offer clarity, compassion, and support to help them navigate stress and uncertainty.

• Provide clarity on payroll or HR issues
• Offer mental health resources or peer support
• Recognize their dedication during stressful times

7. Prepare for recovery

Once a shutdown ends, take time to reflect and rebuild. Use what you’ve learned to strengthen future readiness and relationships.

• Document all delays, missed deadlines, and disrupted activities
• Debrief internally and revise your contingency plan
• Plan a donor re-engagement strategy once the shutdown ends

In the US, shutdowns of the federal government are becoming increasingly common. Nonprofits should always have a financial contingency plan and a proactive communications strategy.

What to do if your nonprofit is impacted by a government shutdown

If your programs are already being affected by a shutdown, here’s what you can do to stay mission-focused and financially resilient.

Assess and reallocate resources

Review your programs and operations to identify what can continue, what to pause, and where to reallocate staffing or funding. Prioritize services that meet immediate needs in your community.

• Create or update a budget forecast based on worst-case scenarios.
• Communicate changes clearly with staff and stakeholders.

Launch emergency fundraising campaigns

Donors are more willing to give when they understand the urgency. Create donation forms specific to your shutdown-related needs, such as emergency housing, food relief, or gap funding for programs. Allow donors to select where they want their donations to go with bonus features like funds and designations.

Prioritize recurring revenue

Now is the time to emphasize sustainable support. Promote recurring giving for donors to help you weather unpredictable disruptions — not just this month, but year-round. You can set up flexible plans with recurring donations and use email to keep your recurring donors updated and appreciated.

Track every dollar — online and offline

Record checks, in-kind gifts, and other offline donations as soon as they come in. You’ll need accurate reports to demonstrate fiscal responsibility and resilience post-shutdown.

Communicate proactively

During a government shutdown, nonprofits shouldn’t wait until a donor or funder asks what’s going on. Send regular updates via email and social media explaining:

• How the shutdown is impacting your work
• What you’re doing to adapt
• How your community can help

Engage elected officials and the media

Your story matters. Contact your representatives and explain clearly and compassionately how the shutdown harms your work and the people you serve.

• Use email templates or phone scripts to make it easier for staff and board members to speak up.
• Consider writing an op-ed or letter to the editor to raise awareness locally.

Document everything

Track the real-time impact of the government shutdown for your nonprofit: delayed payments, canceled programs, staff overtime, and more. This documentation will be critical when it’s time to resume operations and apply for reimbursement or additional funding.

Stay resilient. Stay funded.

Shutdowns may be inevitable. Chaos doesn’t have to be. With preparation, donor trust, and the right tools, your nonprofit can continue to serve — no matter what’s happening in Washington.

Need help setting up your forms or communicating your impact? Reach out to our team or explore the Give blog for more nonprofit fundraising tips.

Resources for nonprofits during a government shutdown

Government Shutdown: What Should Nonprofits Do?