Federal Budget Bill Would Hit Funding for Foundations, Hospitals and Nonprofits

Sherri Welch | May 30, 2025

The federal budget bill that passed the U.S. House last week includes a win or two for the nonprofit sector, but those are outweighed by proposed cuts that will bring significantly increased financial pressures for nonprofits and those they serve.

The largest cuts would decrease funding for the federal food assistance program, increasing the demands on hunger organizations, leaders said. And Medicaid cuts would hit hospitals, local health centers, behavioral organizations and other nonprofits supported directly or indirectly by the reimbursements and their employees.

The federal House budget bill or “One Big Beautiful Bill” as President Donald Trump has called it, narrowly passed on May 22, with a 215-214 vote. It’s now before the Senate for consideration.

About 42% of Michigan’s government budget is connected to the federal budget, said Kelley Kuhn, president and CEO of the Michigan Nonprofit Association, who was at the Mackinac Policy Conference this week.

She and the Council of Michigan Foundation’s president and CEO, Kyle Caldwell, have spent the week advocating and educating leaders on the work of nonprofits and the impact proposed cuts to the federal budget will have on the sector’s ability to fill gaps.

"Whatever happens federally will have a ripple impact,” Kuhn said. “If you don’t have a nonprofit sector able to address the breadth of need in the community, that’s going to be problematic.”