By: Owner & Attorney, Michael Jonas, JD, MBA

I attended a Nonprofit Association of Oregon (“NAO”) event today and walked away with a clarity that was both grounding and deeply concerning. The nonprofit sector is being asked to carry more than ever with almost no structural support to do so.

NAO’s most recent survey, conducted with the Coalition of Communities of Color, and countless national and statewide studies including one we completed this spring and summer, all confirm the same truth. Nonprofits are not simply stretched past capacity. They are navigating a funding ecosystem that is collapsing from multiple directions. Government contracts are ending or shrinking. Foundation dollars are tightening. Corporate commitments to equity are being rolled back. Donors who once gave generously are giving less because of rising costs, investment losses, and new tariffs.

These pressures are not theoretical. They are here now. Government budgets are being cut now. DEI programs are under attack now. Funding that once seemed secure is being delayed, reduced, or withdrawn now. These are the conditions shaping the nonprofit environment today.

Even as hard working and resourceful as they are, our community organizations (especially those whose budgets are built around government contracts) cannot realistically replace that funding through grants, donations, or earned income. Real talk.

In this context, Jim White, Executive Director of NAO, named something essential at today’s event. When organizations reach a certain level of strain, their options condense into three paths. I agree with him completely.

The Three Choices Facing Nonprofits Right Now

Restructure Shift to a smaller and more sustainable footprint. Narrow programs. Reduce overhead. Protect the mission.

Consolidate Merge or partner to stabilize services, share infrastructure, and build long term resilience.

Wind down Close in a planned, thoughtful, dignified way that honors community trust.

These are not signs of failure. They are responsible and strategic adaptations to structural realities. This is hard. This is adulting. This is real life.

As someone who served as a pandemic attorney, working 60 to 70 hours a week to help nonprofits and small businesses stabilize under urgent and unprecedented conditions, I have seen what happens when a sector is expected to hold everything together without coordinated infrastructure.

Nonprofits Are Businesses and Avoidance Creates More Conflict, Not Less

A nonprofit is a business. A nonprofit corporation with HR responsibilities, regulatory compliance obligations, IRS oversight, budgeting requirements, and operational complexity equal to any midsize company.

We appreciate nonprofit staff, boards, and volunteers, yet we often assume they also have scaling expertise, HR capacity, financial management strength, risk and compliance knowledge, communications strategy, and familiarity with DOJ and IRS rules. These assumptions set leaders up for burnout and organizations up for instability.

I have learned that my early warnings are not always welcomed, but I am often the first person people call when the crisis hits. I have seen it over and over. And still, I come back, because I am hopeful and committed to solving problems, preferably before they become emergencies.

What the Data Shows, Including One Stark Finding

Surveys reveal consistent themes: rising community need, shrinking revenue, burnout and turnover, boards overwhelmed by fiduciary responsibilities, and increasing regulatory complexity.

One finding from NAO’s study cannot be ignored. More than 80 percent of nonprofits had lost or expected to lose government funding shortly after completing the survey. This is not a subtle warning. It is a bright red flare.

Nonprofits are contracted with cities and counties to deliver essential social services including housing stabilization, behavioral health, domestic violence support, youth programming, food access, climate work, crisis response, outreach, and reentry services. If a nonprofit collapses, the city or county cannot suddenly take over that service. They do not have the funding, staffing, expertise, infrastructure, or agility to do so.

Why are we not being real about that? If a nonprofit fails, the service fails. If the service fails, the community suffers. And when the community suffers, the government eventually pays far more.

A System Built for Small Business, Not Nonprofits

Unlike small businesses, nonprofits do not have a federal support system designed for them. The Small Business Administration was created in 1953 through the Small Business Act to strengthen and support small for profit businesses by providing loans, contracting support, counseling, and technical assistance.

Because of this statutory mandate, Small Business Development Centers funded through the SBA cannot legally assist nonprofit corporations. They cannot provide technical assistance, advising, or training to nonprofits, even though nonprofits are employers and economic drivers that manage complex public responsibilities.

This means that while small businesses have access to SBA programs, SBDC, SCORE, incubators, accelerators, mentorship networks, and structured support, nonprofits face this storm without equivalent infrastructure.

An Unpredictable and Politicized Economic Environment

Layered onto this gap is an increasingly unpredictable economic landscape. Organizations are trying to plan around rising costs, volatile markets, philanthropic pullback, and federal executive orders that create additional fear and confusion, particularly around anti terror vetting and perceived political alignment.

The so-called war on woke may be the most counterproductive narrative of all. It encourages communities to distrust equity efforts, dismiss critical thinking, and abandon empathy. The message, spoken or unspoken, is that care itself is suspect.

A Nation With Misaligned Priorities

Meanwhile, as a nation, we consistently find funding for endless wars, tax breaks for billionaires, and corporate subsidies that rarely produce public benefit. Yet we are told there is no money for housing, food access, behavioral health, youth programming, or the basic necessities that allow people to survive.

The gap between corporate greed and moral responsibility widens every year, and nonprofits are left stretching themselves across the chasm.

A Democracy Under Strain

Untangling these dynamics and rebuilding a representative democracy grounded in community well being cannot happen overnight. And we must be honest about the timeline.

We are only one year into a four year administration, and nonprofits are already absorbing the consequences of policy choices that deprioritize community stability. The next three years will require clarity, coordination, courage, and proactive infrastructure if the sector is going to withstand what is coming.

Even the Nonprofits That Support Nonprofits Are Struggling

Organizations that support the sector, including those offering technical assistance, capacity building, and sector wide education, are experiencing the same shortages and pressures.

And nonprofits who partner with other nonprofits to offer wrap around services are deeply worried that their partner organizations may not make it. When one collapses, the entire network becomes unstable.

A Coming Shock to the Social Safety Net

Federal Medicaid reimbursement changes will intensify the strain. More people will lose access to essential care. Emergency rooms will become the default safety net. Behavioral health demand will rise sharply. Community health organizations will be overwhelmed.

Neighborhood based nonprofits will absorb unmet needs without additional funding. We are asking nonprofits to withstand a policy earthquake without tools or reinforcement.

And Yet, Portland Still Has Something Special

Despite all of this, we are fortunate. Portland and Oregon are home to values driven, community rooted organizations doing essential work every day. And we now have a mayor and city council who, even in the middle of real budget constraints, are showing signs of listening, learning, and thinking more creatively about what our communities need.

We will not agree with every decision or every elected leader, but absolutism is not helping us move forward. We have lost nuance, critical thinking, and the civic imagination required for what I call the politics of possibility. We need to return to a place where asking hard questions is not treated as criticism but as commitment. Light touches and surface level progressivism cannot solve structural problems. Systems change requires candor, courage, and a willingness to look directly at what is not working.

I am tired of hearing issues labeled as humanitarian crises only to then be told, in the next breath, that meaningful action is impossible. Bureaucracy, regulations, and political caution too often get in the way of moral clarity. And if those in power at the federal level can wield authority in harmful ways, then surely we can find the will to use power in service of community well being, dignity, and stability. The question is not whether we have the capacity. The question is whether we have the resolve.

What Oregon Needs: A Funded Nonprofit Triage Lab

At today’s event, I asked a question that continues to echo in my mind. Where is Oregon’s nonprofit triage system. If we want organizations to survive the next several years, we need a coordinated, statewide, and fully funded support network that meets nonprofits where they are, not where we wish they were. That network has three essential components.

1. Triage and real talk Nonprofits need early intervention long before the crisis point. This requires honest conversations without shame or stigma. When an executive director or program officer is facing an immediate emergency, directing them to apply for a leadership program that begins months from now is not the right solution. Real triage means sitting down, assessing the situation, and determining what must happen now, next, and never.
2. Topical and rapid response guidance Policy shifts do not wait for organizations to catch up. Changes to SNAP, Medicaid, federal budgets, court rulings, and executive orders require immediate interpretation and practical guidance. Nonprofits need experts who can translate these changes in real time and help them adjust operations so they can continue serving their communities.
3. A nonprofit accelerator Once an organization stabilizes, it needs a pathway to rebuild systems, strengthen operations, explore restructuring, or prepare for consolidation. This should be intentional, supported, and rooted in long term sustainability rather than crisis management.

Right now, no statewide system exists to provide this. NAO is not funded for this level of intervention. People’s Nonprofit Accelerator is strained. Business Oregon is legally prohibited from serving nonprofits. There is no coordinated infrastructure to support the organizations we rely on for everything from food access to housing stabilization to behavioral health to climate resilience.

We need structural investment. We need real coordination. And we need to move from optics to outcomes.

Ways You Can Take Action, Starting Today

Fund or advocate for funding for a Nonprofit Triage Lab. Cities, counties, credit unions, foundations, stable nonprofits, and values driven businesses all have a role to play. Some early efforts exist, but scaling this work to the level required must happen now. Share this with your elected officials at every level. Elevate it in policy conversations, budget discussions, and community forums. We know money is tight. The real question is whether there will be more money available when the situation becomes even more costly and disastrous if nothing is done.

Seek help or refer organizations that need support. We assist nonprofits with restructuring, governance, consolidation, risk evaluation, and responsible wind downs. The earlier these conversations begin, the more options organizations have. Services: https://www.narwhallawandbusinessstrategy.com/nonprofit-resilience

Normalize real conversations, even painful ones. Hope matters, but preventative and actionable hope matters more. Light touches and surface level reassurance help no one. Honest dialogue is the first step toward systemic change.

Foster environments where vulnerability is safe. Asking for help is a strategy, not a weakness. Abundance thinking begins with the question, how do we serve the most people with what we have.

Use or join NarwhalPod. We recently built the Pod because outdated, non-values-based provider lists were not serving our community. People needed something searchable, relational, and rooted in shared values, so we created it. Handing someone a list of 10 accountants without knowing who does audits or forensic accounting or who works with nonprofits or who does not, isn’t helpful.

NarwhalPod helps community organizations find their people, their squad, their pod. Think of it as integrative health and multi-faceted solution providers for multi-faceted challenges. And beginning in January, a team of four Portland State University – School of Business MBA students will help us expand and refine the platform for their capstone project.

Community-focused service providers are invited to apply. Organizations can start using the Pod today to find support that truly fits.

https://www.narwhalpod.com/

In Conclusion

Across Portland and throughout Oregon, the talent, wisdom, and heart we need are already here. We have the thinkers, builders, healers, organizers, policy minds, creatives, strategists, advocates, elders, and emerging leaders who make this place resilient. Our challenge is not a lack of brilliance or care. It is the illusion that we can continue as we always have.

We are at a pivotal moment. We can hold onto comforting narratives that keep us in place, or we can build the systems that match the scale of our values. I choose the work of building. I choose the path toward a community that can withstand uncertainty. And I hope we walk that path together.