“Our clients are asking us what is going to happen to their housing, and we don’t know what to tell them,” confided a Denver nonprofit director during one of our recent feedback sessions. Her organization serves hundreds of older adults with housing assistance, but their funding is now in limbo after it’s been promised, then frozen, then partially reinstated, with no guarantees for the future.

This scenario is playing out across Colorado’s nonprofit landscape. As vice president of impact at Next50, I’ve witnessed firsthand how erratic government funding has created an unprecedented crisis for organizations providing critical services to our most vulnerable neighbors.

The data from our recent stakeholder survey tells a troubling story. Contract renewals that once spanned a year now cover just six months. City contracts face cuts of 25% to 35%. Federal funding through HUD and Medicaid has been frozen or canceled with minimal notice. The effects are devastating from growing waitlists to shrinking services and painful staff reductions.

What makes this situation particularly alarming is the ripple effect. As government funding becomes increasingly unreliable, economic uncertainty has prompted individual donors and corporate partners to reduce their giving. This perfect storm leaves nonprofits with nowhere to turn.

Consider the older adult who depends on meal delivery services, or the multi-generational family that finally secured affordable housing after years on a waitlist. When funding disappears overnight, these Coloradans bear the consequences. Their question: “Will I lose my housing?” should concern us all.

Through our conversations with dozens of nonprofit leaders, three priorities have emerged that require immediate action:

General operating support must become the norm, not the exception.The common practice of limiting overhead to 10% to 12% fails to acknowledge the real cost of delivering services effectively. As one executive told us, general operating support represents a shining light of hope in dark times. Foundations and government entities must trust organizations to allocate resources where they’re truly needed.

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We must invest in organizational resilience.The nonprofits that will survive this funding crisis are those exploring innovative sustainability models from new fundraising strategies to shared administrative services. Yet ironically, the organizations most in need of such planning have the least capacity to undertake it. Targeted grants for infrastructure and strategic planning can make the difference between organizational survival and closure.

Finally, foundations must step into advocacy roles that frontline organizations cannot safely occupy. Many nonprofits, particularly those serving immigrant communities or focused on equity initiatives, report fear of political targeting if they speak out. Philanthropic institutions have both the protection and the platform to press for systemic change.

The situation demands more than minor adjustments or temporary fixes. It requires a fundamental re-imagining of how we fund essential community services. When government-funding systems fail, we all pay the price, but those with the fewest resources pay the most.

Foundations and funders must stop imposing unrealistic expectations while providing inadequate support. Policymakers must stabilize contracts and eliminate arbitrary funding restrictions.

Colorado’s nonprofit crisis isn’t just about organizational survival. It’s about the thousands of vulnerable neighbors who depend on these services. The time for bold, decisive action is now.

Jillian Kelly is the vice president of Impact at Next50 and has dedicated her career to creating a world that values aging.