Riding the Waves: How Nonprofits Can Stay Steady While Federal Funding Is in Flux

Updated: 
May 16, 2025
5
min read
By
Melissa Vermillion, Chief Strategy Officer

I was conducting a training a couple of weeks ago in WesternKentucky and an executive director of a small nonprofit asked me during a break in a quiet but steady voice, “What are we supposed to do while the federal grants are stuck in limbo?”

It’s a question I’ve heard dozens of times in the last few months. From food pantries to workforce development nonprofits, from after-school programs to housing groups — organizations across Kentucky are asking the same thing. And I hear the fear behind it. Delays in federal grant programs, shifting agency priorities, and policy uncertainty are more than just bureaucratic hurdles. For many nonprofits, they’re existential threats.

But here’s the truth I shared with her — and what I want to share with you: this moment of uncertainty can also be a moment of strength, if we choose to meet it with strategy, not fear.

Let me explain.

The Waiting Game Is Not a Wasted Game

When systems stall, our instinct is to hustle, to scramble for the next pot of money or short-term fix. But this may actually be the perfect time to pause — not to stop serving, but to regroup and retool.

At Grant Ready Kentucky, we encourage nonprofits to use this“waiting period” as a window for internal reflection. Ask yourself: Where are we most vulnerable? Which revenue streams have we come to rely on too heavily? Do we have the staff and systems in place to support complex grants? Is our messaging clear — do we know how to tell our story in a way that resonates with funders?

These are not abstract questions. They are the foundation of true grant readiness — not just for federal grants, but for any funder, public or private.

Turning Toward New Opportunities

One of the most important shifts you can make right now is widening your lens beyond federal grants. While those large programs might be on hold or evolving, Kentucky is full of potential partners and private funders who are still making investments in community-centered work.

No, the dollars may not be as large. But many of these funders are nimble, locally rooted, and hungry to support organizations that are solving real problems in creative ways. They value relationship-building, they respect deep community ties, and they are often open to projects that would struggle to fit into the rigid boxes of federal RFPs.

This is a time to do your research, reach out, and ask questions. It’s also a time to craft proposals that reflect the heart of your mission, not just the data points.

What You Can Do Now — And Should

You don’t need a green light from Washington to strengthen your organization. Here are some things you can control, starting today:

  • Audit your organizational documents. Make sure your financials, policies, and IRS paperwork are up to date and easy to access.
  • Revisit your case for support. Can you clearly explain why your work matters, who it helps, and what success looks like?
  • Build your grants calendar. Identify a mix of opportunities — both public and private — and align them with your programming year.
  • Invest in relationships. Funders aren’t just looking at your impact — they’re looking at your ability to collaborate, to lead locally, and to adapt.

Don’t underestimate the power of being prepared. I’ve seen more organizations lose funding because of paperwork delays and unclear communication than because of the quality of their work.

We’ve Been Here Before — and We’ll Get Through Again

This isn’t the first time the nonprofit world has faced uncertainty, and it won’t be the last. But every time I work with a nonprofit that chooses to lean in, build capacity, and ask tough questions — I see something extraordinary happen.

They don’t just survive the storm. They emerge more focused, more agile, and more connected to their mission.

At Grant Ready Kentucky, our mission is to walk with you through the fog — not just to the next grant, but to a stronger, more resilient future. You don’t have to wait on federal funding to move forward. There is work to be done, and we’re ready to help you do it.

So take a breath. Take stock. And take one step toward readiness today. Because when the landscape clears — and it will — you’ll be ready to run.

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