On October 1, 2025, the U.S. Government shutdown began after Congress failed to pass appropriations (a continuing resolution) to fund parts of the federal government for the next fiscal year. Because of this, certain federal agencies must cease non-essential discretionary activities now that funding has lapsed. 

Unfortunately for those nonprofits that receive federal funding, most will see their grant payments stop, and grant and contract renewals will remain in limbo until the government reopens.  These vulnerable nonprofits need to assess their cash position and calculate how long their organization can maintain operations without these essential grant payments. 

When calculating your cash flow projections, because of the hold on any incoming funds from the federal government, determine at which point your organization will cross into a negative cash position. If this is projected to happen sooner rather than later, work quickly to establish a line of credit if you do not already have one.

If possible, look at suspending nonessential programs so that available cash can be directed solely to essential mission-driven programs. Keep in mind that once the federal government returns to business, there will be a backlogs that delay processing payments, awarding grant applications, and obtaining approvals.