Nonprofits are backbone of our communities — and they’re under threat
Nonprofits in Northwest Indiana are facing an alarming challenge.
Recent budget cuts at the state and federal levels have thrown many charitable organizations into a period of deep uncertainty. Thousands of nonprofits that rely on government funding are seeing grants paused, reduced or cut entirely.
In Lake County alone, 68.5% of federally supported nonprofits are at risk of losing this crucial funding. If that happens, they face an average budget shortfall of 15.4%, according to a recent Urban Institute report. Further analysis of IRS Form 990 data shows that 60 to 80% of these organizations wouldn’t be able to cover their expenses if government funding were cut. Many already operate with minimal reserves, leaving little room to absorb financial shocks. The consequences are clear: program cuts, staff layoffs or even permanent closures.
This isn’t just a funding issue. It’s a crisis for our community.
When nonprofits struggle, the ripple effects are immediate and widespread. Picture a childcare center shutting down — parents are forced to quit their jobs, employers lose employees and the local economy suffers. Now extend that impact across food pantries, mental health clinics, housing programs, and community centers — and the results are devastating.
At Legacy Foundation, we hear the real-life impacts daily. A food pantry unsure it can keep serving meals. A library forced to cancel programs. A health center planning to reduce services. A park closing facilities due to staffing shortages. These aren’t hypothetical — they’re the difficult choices being made right now in boardrooms and staff meetings across Lake County. Many people don’t realize how vital nonprofits are until those services disappear.
Nonprofits also fuel the economy. In Northwest Indiana, they employ more than 33,000 people and make up 11% of the regional workforce, according to the O’Neill School at Indiana University. Nationally, nonprofits support over 12.7 million jobs and contribute $1.4 trillion to the U.S. GDP each year.
We all want to live in a community where people have the opportunity to succeed. As the community foundation for Lake County, Legacy Foundation is dedicated to supporting every resident — from parents and seniors to veterans, youth, artists and educators. Our work contributes to making Lake County a vibrant place to live, work and thrive. These shared values are the cornerstone of philanthropy and the nonprofit organizations that bring them to life.
Across the nation, nonprofits are the backbone of our communities. They nourish families, care for seniors, educate youth, provide mental health support, respond to crises, and enhance lives through arts and culture. They run the daycare centers we rely on, the clinics that keep us healthy, the shelters that offer safety, and the parks where we gather, ride bikes and watch children play.
We must respond to this moment with urgency and unity. This affects everyone. It’s time for policymakers and citizens to take action to preserve the funding that support both community well-being and economic stability.
Philanthropy plays a critical role, but it can’t fill the gap left by diminished public investment. No foundation or donor can replace the loss of $300 billion in government grants — nearly triple the total of all foundation giving in a single year. At Legacy Foundation, we distribute about $5 million in grants annually. That’s like trying to put out a warehouse fire with a cup of water.
What can we do?
- Get informed. Understand how much your community depends on nonprofit services — whether it's child care, health care, the arts or housing support.
- Take action. Contact your elected officials and urge them to restore and protect funding.
- Support local nonprofits. Donate, volunteer or share their work. Donations to Legacy Foundation’s Lake County Community Fund are being matched 2:1 to support local organizations.
- Raise your voice. Challenge misinformation that undermines trust in the nonprofit sector.
The organizations who help us need our help.
If we want strong communities, a resilient local economy and a society that cares for everyone, we must stand up for the nonprofit sector. The future health of our communities depends on it.
