Local Nonprofits Are Essential

Every day, local people make the South Sound stronger through nonprofits. They protect forests and salmon habitat. They teach people how to read, create art, and start businesses. They answer the phone for people in crisis, tend wounds, build homes, provide food, and care for our kids’ mental health. They bring us local history, culture, and news. Their deep-rooted care for this place shows up everywhere.

Local nonprofits, and the people behind them, play a vital part in creating and sustaining positive change and well-being across Lewis, Mason, and Thurston counties. In fact, nonprofits touch every building block we know is essential for helping local people and communities thrive—basic needs, health and wellness, economic opportunity, climate and environment, place and belonging, democracy and civic engagement.

In addition to directly employing many of our passionate and community-minded neighbors in meaningful work, local nonprofits offer everyone opportunities to volunteer, give, learn, and come together to make a difference. It’s hard to imagine what life would be like without them.

The State of Our Sector

Across the U.S., including here in our region, nonprofits are doing good work under incredible strain. Two key recent national survey reports—from the Center for Effective Philanthropy (CEP) and the Nonprofit Finance Fund (NFF)—raise significant concerns.

Across the country, nonprofit leaders describe a climate of rising pressure. Community needs are growing, funding is tight, and operating challenges are intensifying. National findings from nonprofit survey respondents include:

• 36% ended 2024 with an operating deficit—a 10-year high in survey history (NFF)
• Only 41% can pay all full-time staff a living wage, and many (especially small nonprofits) do not offer employee health insurance (NFF)
• 85% expect service demand to increase in 2025 (NFF)
• 86% said high inflation costs have impacted their organizations and clients (NFF)
• Nearly 90% of leaders say burnout is affecting them and their teams (CEP)

The Community Foundation of South Puget Sound recently conducted our own Landscape Survey of local nonprofits to hear from people closer to home. What we heard resonated with national trends, especially the reality that demand for services is increasing while funding and capacity are not. Notably, 68% of local respondents reported an increase in demand for services already in 2025, 22% have already implemented layoffs, and 22% expect they will have to implement layoffs soon.

For nonprofits that receive federal funding or rely on state resources tied to federal dollars, federal cuts and policy changes are causing widespread local concern. According to the Urban Institute, Lewis, Mason, and Thurston County nonprofits receive approximately $162 Million in government grants, spread across 140 nonprofits, largely concentrated in already-strained systems, including Medicaid, public health support, and housing vouchers. The financial risk of federal cuts is especially high in Lewis County, where 78% of nonprofits face the risk of losing government grants, which would result in a 19% operating deficit.

Like many of you, when we look at this data, we see local people. After years of being in community together, we know the faces and names of dedicated nonprofit employees facing layoffs and service cuts. We’ve seen them in action, watched them grow as professionals, read their grant proposals, celebrated their wins, and felt the sting of their setbacks.

Equally, we see the local people served by the programs now in jeopardy. Programs currently at risk include housing, utility assistance, after school programs, environmental education, mental health services, Meals on Wheels, food banks and local farm purchasing, medical care, domestic violence services, arts, education, and veteran support. These are valuable programs that matter to people in our community.

How Did We Get Here?

There are no simple answers, but there are factors worth understanding as we face what’s ahead, especially historical context, evolving giving trends, and growing challenges to nonprofit capacity.

Indigenous communities have long practiced traditions of reciprocity, generosity, and community care on this continent; and people who migrated here from other continents and cultures have added more traditions to the mix. After the U.S. was founded, “voluntary associations”—people coming together to address community needs and promote common causes—took a central role in our nation’s social fabric and grew into the nonprofit sector.

As Eric Liu so powerfully reminded us at our recent Community Conversation, “America is an argument, and that’s a good thing.” Our nonprofit sector is a uniquely American way of doing things, and it’s raised some uniquely American debates. Who is responsible for our collective well-being? What matters most to us as a community? And how do we ensure that the systems supporting these things are funded, strong, and sustainable?

We’ve answered these questions in different ways over the years, but over time, cross-sector partnerships have played an increasingly central role. Following the War on Poverty in the 1960s, federal agencies began collaborating closely with nonprofits, funding services such as healthcare, education, housing, and food access at the local level. For many decades, the federal government has seen nonprofits as a vital partner in delivering essential public services.

Today, that relationship is shifting. Sudden federal funding cuts and policy reversals—combined with State and local budget cuts—are forcing the nonprofits counting on government partnership to scale back or seek new resources elsewhere to continue meeting community needs. This can create a sense of scarcity or competition around other funding sources, putting a strain on everyone.

At the same time, philanthropic giving has undergone significant changes. Fewer people are giving; inflation has eaten into household budgets, and charitable dollars are increasingly concentrated among larger institutions. This is leaving many community-centered and smaller nonprofits with fewer options—even as they’re being asked to do more. 

When this kind of pressure happens occasionally, nonprofits adapt. When it becomes the norm, it creates long-term strain—on missions, on people, and on the future of vital programs. For many organizations across our sector, that pressure has been building for years. Nonprofit capacity and burnout have been concerns for some time, both in terms of the human toll and the way they drain energy from the core work of advancing nonprofit missions.

We’ve reached a point where we must return to those core questions: Who is responsible for our collective well-being? What matters most to us as a community? And how do we ensure the systems that support those things are funded, strong, and sustainable?

Where Do We Go from Here?

There is no silver lining when it comes to job losses and program cuts, but we remain firm in our commitment to work through these challenging questions together. Having to re-engage with this argument comes with a lot of uncertainty—that’s daunting, but also full of the potential to reimagine the path we’re on or possibly choose a new one. We have faith that the South Sound will navigate these questions with care for each other and the place we call home.

One reason we have faith in our community’s ability to respond is that we see it all the time. In the months ahead, the Community Foundation will be gathering and sharing stories from across our community about how local nonprofits, municipalities, and communities are continuing to address needs and opportunities, despite the challenges. We hope these stories about strengthening food systems, health and care, economic mobility, housing, arts and culture, and community spaces will spark learning, collaboration, creativity, hope, and connection for everyone.

In addition to sharing these community stories, the Community Foundation is continuing to evaluate and expand our own role in supporting community well-being and local nonprofits.

• ‍Strengthening Give Local. Every year, Give Local ensures South Sound giving trends do better than the national average. In 2024,our 8th annual Give Local saw a record number of donors (2,168) and raised $1.18 Million for local nonprofits. We will be offering more support and resources for Give Local nonprofits this year, starting with a call on August 7 to hear directly from nonprofits about their needs.‍
• Offering free workshops. To continue supporting nonprofits beyond grantmaking, we’re offering several upcoming free workshops, including a succession planning workshop on October 22, and three more workshops with the Nonprofit Association of Washington (NAWA) between now and next year. Please sign up for our newsletter to stay informed about these and other opportunities!‍
• Keeping our grant programs strong. Now through July 31, we are accepting applications for Project Connect grants, which aim to support bringing people together in meaningful ways to strengthen civic life, connection, and belonging. On August 4th, Community Grants will also open. We will continue to keep most of these grants unrestricted as a steady, flexible funding source for local nonprofits.

We are also committed to an ongoing effort to listen, learn, and respond to the needs of our community. In addition to the recent Landscape Survey shared earlier in this story, we will continue to be in close contact with our nonprofit partners and will continue to share insights from them as we learn more about their needs.

Three Invitations

For those concerned or moved by what’s going on, we want to end with three invitations to get involved today and build something better together.

1. ‍Give something, do something, join something. The causes you care about need your support more than ever. Giving alone can’t make up for lost federal funding, but donations still make a big difference. Beyond money, there are other ways to show your support like raising awareness and volunteering.  Even the simple kindness of checking in on a nonprofit you love or sending a note of encouragement can go a long way.‍
2. Prioritize our local economy. Local businesses, community banks, and credit unions not only strengthen our local economy, but they also support local nonprofits. Every local transaction—purchases, accounts, and investments—strengthens the South Sound.‍
3. Join the conversation. As we share more community stories in the weeks ahead, we hope you will find opportunities to share and discuss them with friends and neighbors. We’d also love to hear any thoughts, ideas, questions, resources, connection requests, or stories that come from those discussions. What are the bright spots you’re seeing? Where are you finding opportunities to build community and plug in.

The challenges are big, but so are the hearts of this community. Everyone will be needed in the days ahead, and we are grateful to be facing these challenges alongside you.