On January 13, nonprofit organizations providing mental health and addiction treatment services across the country were notified that their federal grants were being terminated, effective immediately. It is estimated that more than 2,000 grants, totaling over $2 billion, were affected. The form letter from the Substance Abuse and Mental Health Services Administration (SAMHSA) stated that these grants were not aligned with agency priorities, despite supporting active programs, staff positions, and essential services.
By Wednesday night, January 14, following backlash from national advocacy organizations and bipartisan members of Congress, the administration reversed course and restored the funding.
The immediate crisis may have been short-lived, but it was not without impact. For 24 hours, organizations were figuring out how to continue providing lifesaving services. It was a moment of chaos, but it wasn’t an isolated event.
For nonprofits, this episode is the most recent in a long line of destabilizing events.
The day of chaos
Almost exactly one year ago, on January 27, 2025, the Office of Management and Budget issued a memo freezing all federal operations; loans and directing federal agencies to do a comprehensive assessment to ensure all federal funding aligns with the policies and priorities of the Trump administration. Within 48 hours, courts paused key provisions, and the memo was rescinded. Just as we saw last week, nonprofits were thrown into confusion about ongoing programs and commitments just to see the decision walked back.
At the same time, the federal government-initiated reductions in force and offered buyouts to career staff, including program officers who serve as critical points of contact for nonprofit grantees. This created a loss of points of contact and delays in processing awards and payments of promised funding to add yet another layer of uncertainty.
Increased scrutiny undermines sector credibility
In December, the Department of Housing and Urban Development (HUD) tried to institute last minute policy changes to the Continuum of Care (CoC) program that would have disrupted funding starting January 2026. The shift would have diverted funding away from supportive housing and rapid rehousing, putting an estimated 170,000 households nationwide and roughly 10,000 Ohioans at risk of losing supportive housing. After significant advocacy and legal challenges, HUD withdrew the changes.
Proposed cuts would have put an estimated 170,000 households nationwide and roughly 10,000 Ohioans at risk of losing supportive housing. After significant advocacy, HUD withdrew the changes.
To justify cutting off federal dollars to nonprofits, the White House issued a memo asserting many nonprofits are “engaged in actions that actively undermine the security, prosperity and safety of the American people.” Such language from the highest levels of government heightened scrutiny and signaled a troubling shift in how nonprofit partners are viewed, despite their central role in strengthening communities.
Across these episodes, there have been legal challenges, resulting in paused enforcement or restored funding. But even with those protections, nonprofits still endured months of confusion, shifting expectations, and inconsistent guidance. Scenario planning is becoming a permanent state of operation instead of a tool to prepare for rare circumstances.
Unpredictable decisions jeopardize essential programs
Last week’s near-shutdown of mental health and addiction programs reinforces the growing concern and experience of uncertainty that is prevalent across our sector.
Over decades, federal, state, and local legislators have allocated public funds to meet community needs that are most effectively addressed by nonprofits. After receiving a government grant or contact, nonprofits hire staff, build programs, and create pathways to housing, health, safety, and opportunity. They let residents know that services are available if and when they need help.
Over the past year, abrupt and unpredictable decisions have eroded nonprofit capacity.
Organizations cannot sustain programs when funding can be withdrawn overnight, or threatened, paused, or altered with no clear rationale. Even brief disruptions weaken frontline services, pulling staff away from direct care and into crisis management, contingency planning, and damage control.
Advocacy is more than crisis management
Here in Cuyahoga County, nonprofits are still the backbone of our human services system, connecting residents to care, supporting people through crisis, and anchoring the wellbeing of our communities. The Cuyahoga Human Services Chamber serves as a collective voice for this sector, providing members with prompt information, opportunities for coordination, and a platform for mutual support. We also work to ensure the community understands what nonprofits are experiencing as they serve people across a wide range of needs.
Despite growing volatility in federal decision-making, human service nonprofits continue to work, plan, adapt, and innovate.
They do this because the people they serve cannot wait for clarity or consistency. When the ground shifts overnight, nonprofits still show up. Still, nonprofits can’t create and sustain thriving communities in an unstable system.
Another year of uncertainty
As we enter another year of volatility, the consequences will extend beyond organizational operations; they will be felt directly by our neighbors in the services available. Our community deserves more than reactive crisis management. It deserves stable, predictable investment in the organizations that hold our human services infrastructure together.
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