Vermont Community Foundation warns federal funding pullback and tariffs could strain nonprofits; urges long-term focus on housing and childcare

Dan Smith, president and CEO of the Vermont Community Foundation, told the Vermont House Appropriations Committee on April 18 that nonprofits and communities across the state face mounting pressure as federal funding winds down and costs rise, and he urged lawmakers to pair short-term crisis responses with sustained long-term investments in housing, childcare and workforce development.

Smith warned of three “orders of impact” hitting the nonprofit sector: small organizations whose budgets could be largely eliminated, larger nonprofits that lose specific grants and must shrink or reorganize, and broader system-level effects driven by higher costs and policy changes. “Organizations that are deeply afraid of what's playing out,” he said, describing staff in his community impact program fielding “inbound calls, all day, every day.”

Why it matters: Vermont’s nonprofit sector delivers many social services that state and local governments rely on. Smith said the combined effect of…