Report: How are new federal policies impacting Arizona nonprofits in 2025?
Report from the ASU Lodestar Center details the impacts of new federal policies on Arizona nonprofits
In early 2025, the second Trump administration began a series of budget-cutting maneuvers, funding freezes and firings of government workers. The Lodestar Center for Philanthropy and Nonprofit Innovation sent an email invitation to nonprofit organizations throughout Arizona to participate in a survey to gauge the effects of these changes on the nonprofit sector.
The online survey was conducted between February 17 and February 25, 2025. To ensure forthright answers and ensure confidentiality, the names and organizations of respondents were not recorded. The results reflect the 212 valid responses by 501(c)(3) organizations headquartered in Arizona.
The report was unveiled on March 19, 2025, at a special convening titled, "Federal policies and Arizona: Nonprofit and grantmakers navigating the new federal landscape." The event was a collaboration between the ASU Lodestar Center, the Arizona Community Foundation, AZ Impact for Good and Valley of the Sun United Way.
Key insights from the report include:
- Nonprofits are well aware of the changes that may be coming, but smaller organizations and those in rural areas seem to be less attuned to the issues.
- Nonprofits are concerned about the changes to federal policies and are looking for guidance on how to deal with them, but are eager to address these issues.
- Nearly half (47 percent) of the organizations that receive either direct federal funding or pass-through funding have experienced delays in payments or the cancellation of grants or contracts.
- Rural nonprofit organizations are especially reliant on federal funding. Forty-two percent of the rural organizations surveyed receive more than half their funding from federal sources.
- Nonprofits report that federal actions on DEI, immigration, and gender policies have had the most impact on their operations so far.
- Uncertainty about what the future holds is a major concern for nonprofit organizations.
212
501(c)(3) Arizona nonprofits surveyed for this report, a sample closely matching the sector's overall makeup in the state. Arizona is home to 24,564 501(c)(3) organizations and 222,380 nonprofit workers who earn $12.1 billion in annual wages, with a median salary of $47,305.
40%
of respondents are eager to take action and support efforts to address the federal changes. Another 45% say they are concerned and need direction.
66%
of respondents receive federal funding or pass-through funding.
58%
of respondents have spent moderate or significant time addressing the impacts of federal orders and policy changes.
47%
of organizations receiving federal funds have experienced delays in payments, recissions of grants or contracts, or other problems with federal funding.