Facts about the state of the infrastructure and needs
When funding drops, organizational leaders tend to translate headlines into numbers: how big the gap is, how long the cash supply can last, and how to overcome the limited resources in a short amount of time. Many nonprofits exist one unexpected cost away from financial instability, and many lack the cash to manage delays or emergencies, or to make strategic investments.
A 2025 national survey by Nonprofit Finance Fund reports that 2025 brought an overall crunch for nonprofit organizations, fueled by the following:
- Inflation: 85% of the survey participants stated that from insurance to supplies, the expenses have been increasing.
- Government support: 84% of those surveyed who rely on government funding expect cuts bigger than 10% of their government revenue. The expectation is that the result will be paused programs, hiring freezes, and fewer services offered.
- Increased demand: many nonprofits allow those living near or below the poverty line to meet their basic needs. The demand for these services has been continuously increasing since 2024, and it is expected to worsen in the upcoming years.
Rebuild budgets on a full-cost basis
Accounting advisors help organizations shift from “emergency” budgeting to full-cost budgeting, ensuring every program budget includes its fair share of administration and facilities (indirect) costs. This protects programs from being silently subsidized.
For federally funded work, the updated Uniform Guidance allows eligible recipients and subrecipients to raise the guaranteed de minimis rate for indirect costs from 10% to 15% of modified total direct costs. Rely on your accounting advisor to guide you through the latest legislative and reporting requirement updates.
Secure budget flexibility on grants before it becomes urgent
Cuts often arrive alongside shifting program realities. Advisors help nonprofit leaders plan and request re-budgets early and track the approval process and timeline. They also set up internal flags to report and track documentation changes.
Strengthen liquidity and board-level visibility
Hardened nonprofit reporting requires a plan for how the organization will meet cash needs over the next year. Accountants use this framework to build internal dashboards (cash/quick ratios, days cash on hand, restricted vs. unrestricted trends) and to rehearse board communications that connect tough choices to liquidity data the audit will later echo.
They also help estimate the right-sized operating reserves with policy guardrails, optimize lines of credit and covenant monitoring, and map temporarily restricted assets and release schedules so leadership knows what really can be spent now.
Triage programs with contribution margin and mission fit
Accountants partner with program heads to produce program contribution margins and overlay it with mission criticality. The result is a smart triage: protect high-impact, near-break-even programs; redesign or pause chronic deficit programs unless they are strategic loss leaders with a short, funded path to sustainability.
Tighten cost controls without hurting service quality
Experienced controllers and CFOs bring a sequence of freezes on nonessential spending, renegotiating leases and vendor contracts, standardizing purchasing, and improving efficiency.
Make every restricted dollar count
In an era of delayed reimbursements and policy volatility, accountants help convert programmatic wins into cash. They surface compliance-friendly opportunities to reclassify allowable costs that can be beneficial to the organization.
Tell the financial story donors and boards need to hear
In downturns, transparency earns trust. Accountants translate dense financial data into donor-ready narratives: what changed, what the plan is, and how the organization will protect mission delivery. They prepare scenario-based funding needs and produce evidence-backed overhead explanations, so funders fund the actual work, not just direct line items.
Build resilient infrastructure for the “next cut”
Finally, accountants leave systems stronger than they found them. Funding cuts don’t have to mean mission cuts. With rigorous forecasting, full-cost budgeting, smart grant negotiations, and clear liquidity storytelling, accounting experts can convert financial headwinds into organizational resilience and keep services flowing where they’re needed most.
