New Report Shows SW Washington’s Nonprofit Sector Is Strained By Federal Funding And Policy Changes (Photo) - 03/24/26
Vancouver, Wash., March 24, 2026 — A year of federal funding and policy changes have strained southwest Washington nonprofits, according to “Finding New Ways Forward,” a new report published by the Community Foundation for Southwest Washington.
The report presents data from the organization’s 2025 nonprofit survey, which polled more than 100 nonprofit leaders across Clark, Cowlitz and Skamania Counties. The responses reveal a sector navigating major financial challenges and growing uncertainty. Acute concerns include staffing reductions, program closures, additional administrative burdens and a rising demand for services.
“Nonprofits are a critical part of our region’s social and economic infrastructure,” said Matt Morton, president of the Community Foundation for Southwest Washington. “They employ thousands of people and deliver essential services that keep our communities thriving. As funding disappears, the impact is felt beyond board rooms and offices — it’s felt in our families and neighborhoods.”
Larger organizations carry the greatest financial exposure, with cause areas like early childhood education, food security, and physical and mental health most reliant on federal funding. Because of this, leaders across the sector — including those insulated from federal changes — anticipate ripple effects that will increase competition for philanthropic resources and weaken essential community services.
One behavioral health nonprofit said, “Recent changes are likely to cut a quarter of our funding and leave Medicaid beneficiaries who need services in the lurch. As a result, we’ll see increased overhead costs, changes in the scope of our services and lost staff time as we focus on contingency planning.”
Key findings include:
- 60% of respondents feel insecure or worse about the state of the sector.
- 32% of nonprofits receiving federal funds are experiencing or anticipating reductions in staffing or employee pay.
- 51% of surveyed nonprofits have been or will be impacted by federal funding changes.
- 62% of organizations said new federal policies already are or will soon impact operations.
The report also illustrates how nonprofits are responding. Nonprofit leaders emphasized creativity and collaboration, including efforts to diversify revenue streams, strengthen partnerships and invest in shared infrastructure.
“Nonprofits have always shown incredible resolve through crises, even more so when local support buoys their efforts,” Morton said. “This is yet another moment for collective action, and nonprofits need sustained, flexible investments as they work to find new ways to meet local needs.”
“Finding New Ways Forward” is designed to guide local funding and advocacy efforts. The report outlines recommended actions for donors, volunteers and other community partners, while also providing key insights for nonprofit leaders navigating the current climate. Read the full report at cfsww.org/forward.
About the Community Foundation for Southwest Washington
Established in 1984, the Community Foundation helps residents create a flourishing and just southwest Washington by fostering impactful giving, trusted partnerships and civic engagement. Its team of experts has partnered with local donors and professional advisors to establish more than 380 charitable funds. Collectively, these funds expand opportunities every year by providing grants for nonprofits and scholarships for students. Find out how you can become a part of its giving community at cfsww.org.
