Washington State’s nonprofit sector has long been an essential backstop for families living with economic uncertainty. Food banks, housing programs, healthcare services, workforce development programs, and more fill the gap when government programs are insufficient. Today, however, nonprofits are not just coping with the increasing need in our communities. They are fighting to stay afloat.
A Perfect Storm of Demand
The current government shutdown is having far-reaching effects beyond Washington D.C. Here in Washington State, families are being squeezed. Federal employees without paychecks have turned to food banks and social services. At the same time, sweeping changes to federal policies have added to the stress.
New requirements for SNAP benefits mean some families are no longer eligible for the food they once counted on. Shorter unemployment benefits mean less time to get back on one’s feet. Healthcare is becoming more expensive. Gas prices are rising, putting transportation out of reach for families living on thin margins.
In each of these areas, one of these forces would be challenging. The combination is an unprecedented erosion of the financial safety net for Washington State families. Nonprofits are responding just as they have for decades. The problem is that the need is outpacing the sector’s ability to help.
Nonprofits Are Closing
What is most concerning is that the organizations best placed to help are themselves in crisis.
In the short time the current administration has been in office, nonprofits have continued to close their doors at an escalating rate. The reason is structural. The federal government’s disruption in funding, including the delay in reimbursements and the sudden termination of contract funds, leaves nonprofits unable to pay the bills. The problem is complicated by the fact that the nonprofit is expected to continue doing the work as the funding goes away.
This is the very reason that, for the last four years, the Nonprofit Association of Washington (NAWA) has made government contracting reform one of its highest legislative priorities. The idea is simple: ensure that the state’s contracts with nonprofits are equitable, timely, and sustainable. The coalition is broad, but success has been slow. The struggle to ensure equitable contracts will continue in 2027.
Small Wins
The 2026 Washington legislative session was short, and the policy environment was challenging. But the news is not all bad.
A tax exemption on live presentations, an amendment to ESSB 5814 from 2025, was a win. While NAWA continues to advocate for broad and explicit tax exemptions, the success shows that sustained advocacy is the key to success.
In other good news, the Texas federal district court just DISMISSED the Johnson Amendment case!
A Texas federal district court released its decision, dismissing a case involving a legal settlement with the IRS, which, if approved, would have undermined a landmark federal law that has protected charitable nonprofits, including churches, food banks, and community groups, from partisan politics for more than 70 years.
In its decision, the court held that it is barred from hearing the case under the Tax Anti-Injunction Act because the issue at hand is whether the two churches involved in the case would lose their tax-exempt status – and therefore, face tax liability – if they engage in partisan politics. This is a sure win for nonprofits.
Democracy Is Part of the Picture
Any conversation regarding the future of the nonprofit sector is incomplete without discussing the state of our democracy. With the midterm elections coming up, every citizen in Washington state has the opportunity to affect the course of the state and the country.
One such proposal that is worth keeping an eye on is the “Safeguard American Voter Eligibility Act,” or “SAVE Act.” While its intent is to ensure that noncitizens are not able to vote in federal elections, something that is already against the law, this proposal would require individuals to prove their citizenship through an in-person documentary proof, effectively eliminating online and mail-in registration. The groups that would be impacted would be caregivers, working families, and those who have changed their names through marriage, many of the same people nonprofits work hardest to serve.
What Comes Next
Nonprofits are, by nature, resilient. They exist because a community or society needs them, and they continue to exist through even the worst of circumstances that would cause any business to close its doors. However, even nonprofits have limits to this resiliency, and the situation that is currently playing out is testing those limits.
The future is not just about determination, though that is certainly a part of it. It is about action, and that action is something that is required to be taken by those who are impacted, such as the constituents, and those who are able to make a difference, such as those who donate to these organizations and those who volunteer for these organizations. It is about the people that nonprofits serve and those people putting those experiences into words and directly into the hands of those who are able to make a change. This is, ultimately, what advocacy is based on.
