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Nonprofits in Silicon Valley are being squeezed by fewer resources, higher demand for services and shifting federal priorities.
This finding is the key takeaway of the Nonprofit Pulse Report, a review of how federal actions are impacting nonprofits in San Mateo and Santa Clara counties. The report was created by Thrive Alliance and Silicon Valley Council of Nonprofits, two advocacy organizations that aim to amplify the voice of the nonprofit sector.
One-hundred-and-sixty-four nonprofits were surveyed about how shifting federal policies have impacted their workforce, financial conditions and progress toward racial equity objectives. A variety of nonprofit sectors were represented, including human services arts, education, environment and health. The survey was administered between Sept. 15 and Oct. 7, 2025, and the report released on March 18.
The nonprofit sector has absorbed significant shocks in recent years, said Georgia Farooq, CEO of Thrive Alliance, in an interview. While nonprofits coordinated with philanthropic organizations and local governments during the Covid-19 pandemic, federal actions during President Donald Trump’s second administration have caused material disruption to nonprofits in the area.
“Because of the confusion now and the lack of consistent information… I think institutions are trying to figure out how to protect their own interests,” Farooq said. “We’re looking for more of a coordinated response, especially right now as it comes to the health of the nonprofits, because we know that they are serving our frontline communities.
Immigration and Customs Enforcement activity was the most widespread source of disruption, with 63% of surveyed organizations reporting a significant direct impact. Farooq noted that some people have begun to decline services from nonprofit agencies due immigration-related fears. As a result, some nonprofits have had to tailor programs to provide psychological care for immigrant communities and have had to adjust how they deliver services.
Other nonprofits have suffered from an overall decline in federal funding for social services and healthcare. Covid-related funding for social services, including federal legislation such as the 2021 American Rescue Plan Act, has largely dried up. New federal legislation such as H.R.1, the megabill passed in the summer of 2025, significantly reduced funding health care and food assistance across the country and introduced new eligibility requirements and access barriers.
As a result, nonprofits are in a weakened financial position, the report stated, and funding is not being offset by private capital or philanthropy.
“Demand for services skyrocketed. We are not able to keep pace,” Farooq said. “We were already squeezed during Covid, and so it’s almost compounding right now.”
Arts agencies have also been impacted by attempted or realized funding cuts, the report found. President Trump signed an executive order in March of 2025 intended to dismantle the Institute of Museum and Library Services, an organization that provides resources and grants to libraries and museums. Months later, a federal judge ordered an injunction that reinstated funding for the organization. In May of last year, the Trump administration also canceled at least $27 million in arts grants that had already been approved through the National Endowment for the Arts. Some of these grants were later reinstated, while others remain canceled or in legal limbo.
President Trump has also signed a slew of executive orders that prohibit equity-related federal funding and terminates positions and programs related to diversity and inclusion. These DEI restrictions have impacted 79% of the surveyed organizations through funding cuts that can suspend programs and increase the stress of staff, the report stated.
Coupled with the uncertainty related to these federal actions, the report found that most nonprofits reported worsening revenue related to a weakening macroeconomy. In addition, demand for services including food assistance has surged, and local organizations like La Comida, Second Harvest and The Food Closet have been strained. Organizations that rely on federal funding and those who serve immigrant or minority communities have been disproportionately affected.
With increased demand and reduced financial strength, some nonprofits are facing closure, Farooq said. Should that happen, individuals and families may not receive certain services from organizations that may have served specific communities in culturally appropriate ways, she said.
“You have these really wonderful small nonprofits that have built these deep relationships in the community, and suddenly, they’re not able to provide those services,” Farooq said. “Maybe you’re talking about 50 families, but that is 50 families that received really important resources, and maybe they’ll fall through the cracks.”
The report found an increased openness for nonprofit collaboration, cost sharing and even merging. Nonprofit leaders also say they most need unrestricted funding, reduced administrative burden from partner organizations, support from philanthropic organizations and individuals.
‘There’s always been this call to action around local giving, [but] I think it tends to die down,” Farooq said. “Folks are oftentimes interested in thinking about being philanthropic elsewhere, globally, but there’s so much that you can do here back home.”
