A State of Confusion – Federal Funding Cuts and Their Impact  

By far the most common question I get lately is “What impact are federal funding cuts having at Agate.” Of course, what everyone really wants to know is how they will impact the people we serve.  

Unfortunately, I don’t have a great answer. There are too many unknowns. What I do know is that when one program loses funding, it has a ripple effect far beyond the program itself.  

Any significant cuts will start a chain reaction that hurts our entire community. It will especially impact those on its fringe. Which is where the majority of Agate program participants find themselves.  

Homelessness Numbers Will Grow 

When homeless services lose funding, the effects are severe and far-reaching. This deserves special attention because homelessness creates so many other problems. 

Federal funding supports every facet of fighting homelessness. We risk losing shelter beds, 24/7 shelter services funding, support getting into permanent housing, prevention efforts to keep people housed, support for chemical dependency issues, services for mental health problems, funds to build affordable housing, and much more.  

The proposed Federal cuts to SNAP, Medicaid, Medicare and other HUD programs will have deep impact on the people we serve, putting additional pressure on our teams to help people find resources. You can track federal cuts to Minnesota HERE.

Without these vital services, we can expect unsheltered homelessness to increase and put additional pressures on the most vulnerable in our society.  

In addition, the financial impact might be immense. Most of these programs are cheaper than the alternatives. For instance, a chronically homeless person can cost over $35,000 per year in emergency room visits,  and crisis services.  

There is a human cost, too. Because, of course, fueling these statistics are real people:  

• Families sleeping in cars,  

• Veterans who served our country now living on the streets,  

• People with mental illness who cannot access treatment, and 

• Working people whose wages don’t cover rising housing costs. 

The people in our community who are most vulnerable will feel these shifts first and most acutely. This includes low-income families; seniors; veterans; and people with disabilities, with chronic health conditions, or who identify as BIPOC.  

Everyone Will Feel Federal Nonprofit Funding Cuts 

When any nonprofit has a reduction in funding, they must make hard choices. Often the answer is a reduction in staff that leads to a reduction in people served. Some simply cannot continue to operate and close.  

According to the National Council of Nonprofits, over one-third of nonprofit funding comes from the government. Broad cuts have the potential to undermine the entire sector and its lifesaving work. 

When one program closes, people look for help elsewhere. This creates longer waitlists at other nonprofits that are already short on money and staff. This means harmful pressure on the “lucky” nonprofits that don’t have funding losses.  

• Health Problems and Costs Increase – with less access to preventive care from nonprofit health clinics, more people end up in emergency rooms. This costs everyone more money. One study found that every $1 cut from preventive health programs can lead to $5.60 in emergency care costs. 

• Children and Schools Feel It – After-school programs keep kids safe and help them learn. Without them, kids may fall behind in school and parents may miss more work to provide care. Many kids lose access to healthy meals. Academic supports disappear, resulting in lower grades, higher truancy, and lower graduation rates.  

• Job loss – Nonprofits employ about 10% of American workers, and in the compassionate state of Minnesota, that number is closer to 14%. The US has lost 10,000 nonprofit jobs since January.  

The Story At Agate 

Agate receives a small amount of direct Federal Funding. But a whopping 71% of our funding comes through the government at some level. Federal changes will affect State and County budgets. Which will directly impact Agate. I worry what will happen to our ability to deliver our lifesaving services. 

But this isn’t just about Agate. It’s about every nonprofit you and I care about. It’s about every person or animal or park that needs extra support.  

States are going to face very difficult choices. Federal funds accounted for 34% of total state expenditures in state fiscal year 2024.  

It’s Time To Fight Tor Causes We Care About 

It’s said so often, it may seem meaningless. But it is not: 

 CALL YOUR LEGISLATORS! 

Local and national representatives need to hear from us. Tell them you care about these issues. Share how nonprofits have helped you or someone you know. Explain why you support nonprofits and expect they will, too. 

After that, keep volunteering. Keep making your generous financial gifts. And keep voting at every opportunity—like all our futures depend on it.