Podcast Summary: Giving Done Right

Episode: Mounting Pressure on Nonprofits: What Donors Need to Know with Elisha Smith Arrillaga

Hosts: Phil Buchanan (The Center for Effective Philanthropy)
Guest: Dr. Alicia Smith, Vice President for Research, CEP
Date: November 13, 2025

Overview

This episode examines the mounting pressures facing nonprofits in 2025, exploring new data collected by the Center for Effective Philanthropy (CEP). Dr. Alicia Smith joins Phil Buchanan to discuss the existential risks nonprofits are facing due to funding cuts, political headwinds, and an overall challenging environment. The conversation also explores how foundations and individual donors are responding to these shifts and offers guidance on how donors can make a meaningful impact in this unprecedented moment.

Key Discussion Points and Insights

1. Dr. Alicia Smith’s Background and CEP’s Approach

Timestamps: 01:09–04:53

• Dr. Smith shares her journey from Mississippi civil rights roots to philanthropy, highlighting her belief in data as a tool for community empowerment (01:42).
• CEP distinguishes itself by:
  • Using representative samples of both nonprofits and foundations.
  • Prioritizing rigorous data analysis, including nonresponse bias assessments.
  • Rapid turnaround of research findings to provide timely insights (03:45).
• Recent fast-paced data releases (e.g., 10-day turnaround for a major survey) reflect the urgency of the moment (04:53).

2. The Current Context: Existential Threat to Nonprofits

Timestamps: 05:39–19:30

• Nonprofits face steep challenges: 30% report losses from government sources, 42% expect certain federal bills to impact fundraising negatively, and nearly 50% worry about needing to close or merge due to the current context (08:24).
• “Two thirds of organizations that responded to the survey said that the current context poses moderate to significant risks for them to continue to operate. So I would say that's a pretty existential data point.” – Dr. Alicia Smith [00:02, 19:17]
• Groups already marginalized (POC and female leaders, those serving immigrants/refugees, environmental orgs) are disproportionately impacted, though the differences are small but significant (10:12).
• Regional differences are minimal among nonprofits, but Midwest funders report more requests for funding (13:28).

3. Nonprofit Voices: Lived Experience Amid Crisis

Timestamps: 14:06–16:18

• Nonprofit leaders describe survival as a “win condition,” citing rising costs and shrinking funding:
  • “There is no viable win condition. The wind is to tread water, costs are increasing simultaneous to a much more difficult funding environment. The well is running dry, operating runway is shrinking, and those staff want to move in a proactive direction. I am most worried about base level subsistence.” – Dr. Alicia Smith (quoting respondent) [14:17]
• Sizeable drops in funding come from all sources: government, foundations, and individual donors (15:10).
• Anticipated cuts to vital programs (like SNAP) add to the anxiety about what’s next (15:33).

4. Historical Context: Unprecedented Threat

Timestamps: 16:50–19:30

• The sector has faced targeted attacks before (e.g., civil rights era), but never at this scope and scale; scholars agree this is an “unprecedented level of threat” (18:50).
• Dr. Smith confirms: “I mean, we asked a different way nonprofits, we asked about their thoughts on their risk to continue to operate. And two thirds of organizations that responded to the survey said that the current context poses moderate to significant risk for them to continue to operate.” [19:00]

5. Foundation and Donor Response Data

Timestamps: 19:30–24:43

• 55% of foundation leaders report the context negatively impacts their progress toward goals (20:00).
• 87% of funders have experienced increased demand for grants, 64% provided emergency/rapid response grants, but only 30% increased their giving budgets (20:00–22:19).
• “If we look back two or three years from now and the sector's in a very different state, will we be proud of the decisions that we made at this moment?” – Dr. Alicia Smith [22:19]
• Average increases in foundation giving are relatively modest: typically 2% of endowment value (e.g., from 5% to 7%) (23:30).
• 15% of foundations are considering increased payouts; still a minority (23:55).

6. Bridging the Perception Gap: Nonprofits vs. Foundations

Timestamps: 25:15–28:30

• Notable disconnect in perceptions:
  • 93% of funders think they effectively understand grantee challenges; only 53% of nonprofits agree.
  • On willingness to take risk: 69% of funders say they’re effective, versus only 29% of nonprofits.
• “If we don't have a shared understanding of how we're both seeing challenges or risk… that moment is definitely now.” – Dr. Alicia Smith [26:50]
• Funders (and donors) must find ways to get candid feedback, especially during crisis (27:13).

7. Practical Guidance for Funders and Donors

Timestamps: 28:30–34:18

• Effective funders are fostering collaboration, supporting mutual aid, and providing nonfinancial resources (e.g., legal aid, security, capacity-building) (29:24–31:08).
• Individual donors have more flexibility and can be deeply responsive to pressing needs (31:05).
• Addressing the psychological toll: Organizations are contending not just with resource shortfalls, but also harassment and safety risks (32:00–32:30).
• Dr. Smith and Buchanan urge listeners to “double down” on values, find ways to counteract hate, and recognize individual agency—volunteering, showing up, and sustained engagement are all powerful acts (32:50, 33:26).
• “There are all kinds of things that we can do. And to me, that was the most powerful thing in the interviews we conducted… there are folks doing amazing things in every part of this country every day, courageously.” – Dr. Alicia Smith [33:26]

8. What’s Next: Continued Research and Reporting

Timestamps: 34:18–35:13

• CEP will continue tracking and reporting on the state of the sector throughout 2026 (35:05).
• Forthcoming report will synthesize survey and interview data (34:34).
• Data and resources available at cep.org.

Notable Quotes & Memorable Moments

• Dr. Alicia Smith on existential risk:
  “Two thirds of organizations… said that the current context poses moderate to significant risks for them to continue to operate. So I would say that's a pretty existential data point.” [00:02, 19:17]

• On the lived nonprofit experience:
  “There is no viable win condition. The wind is to tread water, costs are increasing simultaneous to a much more difficult funding environment. The well is running dry, operating runway is shrinking, and those staff want to move in a proactive direction. I am most worried about base level subsistence.” [14:17]

• On donor responsibility in crisis:
  “If ever there was a moment to stand up and live by values, this is that moment for sure.” – Dr. Alicia Smith [12:57]

• On the perception gap:
  “93% of funders thought they were being very effective, and only 53% of nonprofits rated that way… willingness to take risk… only 29% of nonprofits rate funders as being willing to take risk at this moment.” – Dr. Alicia Smith [25:31]

• Empowerment and practical action:
  “There are all kinds of things that we can do… there are folks doing amazing things in every part of this country every day, courageously.” – Dr. Alicia Smith [33:26]

Timestamps for Critical Segments

• 01:42: Dr. Smith’s journey into philanthropy and CEP’s research philosophy
• 08:24: Key data on funding losses, closures, and existential threats
• 10:12: Disproportionate impact on marginalized leaders
• 14:17: Illustrative nonprofit leader quote
• 18:50: Unprecedented vs. historical threats to the sector
• 20:00: Foundation response statistics
• 25:31: Perception gap between funders and grantees
• 29:24: Creative and courageous approaches by nonprofits and funders
• 32:50: Call to action for donors—showing up and supporting at multiple levels
• 34:34: Forthcoming report plans and ongoing research

Final Takeaways

• The nonprofit sector faces unparalleled existential risks due to combined economic and political pressures in 2025.
• Marginalized groups and organizations serving vulnerable communities are hardest hit.
• Rapid, strategic, and values-driven responses are urgently needed from both foundations and individual donors.
• Donors are encouraged to act boldly, collaborate, seek candid feedback, and provide both financial and nonfinancial support to trusted organizations.
• Continued data collection, transparent reporting, and community-centered action will be key to navigating the ongoing crisis.

For deeper insights and the latest data, visit cep.org and check for the upcoming comprehensive report.