When the Trump administration took office in January 2025 and quickly moved to pause and terminate billions in federal grants, many nonprofits saw major awards — including a $156 million grant to help lower-income households cut their energy bills — vanish.
As nonprofits strive to maintain their operations amid these cuts, four executives shared how their organizations regularly assess funding scenarios to determine which remaining revenue streams would best support their missions during the “Navigating the Shifting Landscape of Federal Funding: Strategies for Not-for-Profit Resilience” session at the recent American Institute of Certified Public Accountants’ Not-for-Profit Industry Conference in National Harbor, Maryland.
The federal grant freeze created much uncertainty last year for nonprofits like Resources for the Future, an economic and environmental research organization where Carolyn Mollen served as its vice president for finance and administration and treasurer. The organization’s leadership, staff and board of directors had to communicate frequently about funding availability, she said.
“Our strategy was to spend down as quickly as we could before funding would get terminated, which required shifting priorities and communicating with other donors,” Mollen said. “We then realized this would not be so much a year-one impact, but more of a year-two and year-three impact because we were able to finalize our grants before we had issues. The real problem was that there was a limited pipeline for the next two years for our programs because we didn’t think there would be much of a prospect for federal funding and that proved to be true for us.”
Along with the cuts to federal funding, Resources for the Future also experienced declines in foundation funding as foundations changed their priorities.
“That had a double-whammy effect on us,” Mollen, currently chief financial officer for Sherman Fairchild Foundation, said. “We had to look at the whole structure of our organization.”
Scenario Planning Becomes Core Practice
Resources for the Future received about 20% of its funding from federal grants as of several years ago. Mollen said its development team created a model that ranked funding prospects as “highly likely,” “likely,” “low likelihood” or “unlikely,” enabling financial plans across multiple funding scenarios — conservative, optimistic and best case.
“It’s tedious at first, but when you build the habit of [assessing scenarios] all the time and the development team knows they have to adjust the rankings, then you have the tools and data to run these scenarios,” Mollen said.
After federal funding disruptions in 2025, Resources for the Future shifted from semiannual scenario planning to weekly updates to track which scenario was unfolding and adjust expenses accordingly.
“I strongly recommend anybody who has multiple revenue streams in grants to start a process like that and do it in partnership with your development team because it is immensely helpful,” she said. “Really, all [nonprofits] should do such scenarios whether things are uncertain or not.”
Mollen encouraged nonprofit executives to have discussions with executives from other nonprofits with similar financial concerns.
“We were able to discuss issues together, which was helpful for us to go to our board of directors to let them know we talked with our peers to understand what other organizations were doing,” she said. “When you are in a crisis, these connections are the best thing you can have.”
Mario Jabbour, chief financial officer for Project Hope, which provides emergency response and humanitarian assistance to about 5 million people in more than 25 countries worldwide, reinforced that scenario planning should be a regular part of any budget process, and each organization should determine if they can realistically respond to any such scenario. For example, would an organization that relies heavily on funding from individual donors and foundations be ready to implement a reduced-revenue scenario should a recession force these funders to reduce their giving to the organization?
“You need to cross-check these numbers to see if they are realistic,” he said, adding that many nonprofits waited too long before addressing funding shortfalls due to lack of planning.
Bridge Funding and Revenue Diversification
Executives emphasized that replacing federal funding is slow, particularly for organizations that historically relied on it.
Because Project Hope received more than 120 grants (about 35% of which are federal awards) totaling $265 million, and the current administration terminated some of the nonprofit’s federal grant funds, Jabbour said his organization took a phased approach that included redesigning some programs to maintain program delivery and bridging some of the financial gaps with corporate funding. However, he warned that a shift toward other funding sources may not materialize immediately.
“For nonprofits that typically focused on federal funding and now have to look at other sources of revenue, they really should have started that process a long time ago because when you [prepare to seek funding] from a corporation, it will not materialize until at least two years,” he said.
Similarly, the Clean Energy Fund of the Carolinas, which assists low- and moderate-income households, small businesses and other nonprofits install clean and efficient energy solutions, had to halt a major initiative after losing millions in funding from the Environmental Protection Agency in August 2025, Jennifer Weiss, the nonprofit’s co-executive director, said.
Once the EPA froze Greenhouse Gas Reduction Fund programs in April 2025, the nonprofit assessed its options if the $156 million awarded in 2024 for the Solar for All program under the Inflation Reduction Act to put solar energy units on lower-income homes to reduce electricity bills was halted. While the organization’s investments in the Solar for All program were reimbursed over time, the organization was unable to provide all services prior to the funding cut.
In response, the organization worked to determine if it could fulfill its mission in different ways via other partnership opportunities. Eventually, the organization received $1.5 million in funding from the two states, and another $2 million from an investor to enable it to operate two programs.
“We had to go out and find some unique pockets to make some movement toward providing these programs, and maybe later we can, again, take advantage of federal programs in the future,” Weiss said.
Mission Alignment
Kim Snyder, chief financial officer and chief operating officer for Seattle King Snohomish YWCA, said her organization — which operates 40 programs and receives more than 150 direct and pass-through grants (52% federal, 22% state and city) to provide housing, economic advancement and health and safety assistance to 9,800 individuals annually — focused on grant alignment and financial discipline.
In response to the cuts in funding in 2025, her organization assessed various areas of operations, including confirming grant proposals and marketing language did not conflict with funding agency priorities and assuring the board of directors that the organization was still meeting its mission.
“It was a delicate balance,” she said. “We were looking at finances and managing cash flow. We tried to stay calm so that our case workers could focus on services and so we [could] ensure the board that we were not sacrificing the mission.”
Snyder said she assessed all of her organization’s grants to determine which were most aligned with her organization’s mission, and whether programs were being funded with both grants and donor contributions.
“We had to be transparent with our finance committee so that they knew we had a plan to mitigate risks and to monitor that closely,” she said. “We did scenario planning, looking at how much funding remained on our grant. We also had to determine if certain grants were eliminated, and how would that affect allocations and direct costs. Our finance team looked diligently at our cash flow and at our endowments, so we were clear about financials to ensure we could sustain our programs.”
