According to the Colorado Nonprofit Association’s 2024 Economic Impact Report, there were 34,251 nonprofits in Colorado that supported 262,000 jobs and made a $25 billion contribution to the state’s gross domestic product (GDP).
The report adds that 32,000 of those jobs, $2 billion in labor income and $3 billion in GDP come from Colorado’s 5th Congressional District, which encompasses Colorado Springs.
By comparison, the state’s civilian space economy (the second largest per capita in the nation) boasted 1,000 aerospace firms with 35,000 workers as of April 2024.
Leaving aside nonprofits as an employer, their impact is felt on a larger scale when including the vulnerable populations kept afloat and, often, off of government assistance programs thanks to the work of those 34,251 organizations.
Regardless of where one falls on the political spectrum, downsizing services would cause a ripple effect that would be catastrophic to the individuals and families served, as well as to employers in other industries, taxpayers and the economy in general.
An Unpredictable Future
After a slower post-COVID job growth rebound than other industries, nonprofits nationwide are now grappling with a new reality.
On Jan. 27, when the Trump administration called for federal agencies to implement a freeze on a large number of grants, loans and assistance, nonprofits were thrown into chaos with many reporting an inability to access already-awarded grant money.
“The first day of the freeze, we could not get in until that next afternoon going into the next day, but we were able to access it for CPCD,” says Steven Lewis, CEO of Colorado Springs-based Community Partnership for Child Development, which was founded in 1987. “But throughout the country, some of my colleagues that run Head Start programs were not able to get into their funding even when it was uplifted.”
Should federal funding cuts reach Medicaid, there would be a profound impact on the community’s healthcare.
Colorado has 20 Community Health Centers and 247 clinic sites. These clinics are often the only affordable primary care providers for their 857,000 Coloradan patients, 50% of whom are covered by Medicaid.
Of these 247 sites, 18 are in Colorado Springs, nine are in Pueblo and two are in Cañon City, according to the Colorado Community Health Network (CCHN) website.
“Any cuts to Medicaid would have significant impact on Community Health Centers, 65% of whom are already operating with negative financial margins because of a combination of inflation, rising cost of salaries, the Medicaid unwind and flat federal funding for the past 10 years,” CCHN tells the Digest.
Although a Washington, D.C. federal judge ordered an administrative stay and the Office of Management and Budget (OMB) rescinded the related memo, nonprofit leaders grapple with the anxiety of an unclear future — so unclear that very few organizations were interested in speaking to the Digest on the topic.
The Path Forward
For some groups, advocacy is key. In February, Community Health Center staff and patient board members from across the country gathered in Washington, D.C., for an annual conference, during which they shared how any future cuts to Medicaid — whether in the form of block grants, Federal Medical Assistance Percentage reductions or work requirements — would have disastrous impacts on Coloradans’ medical coverage and Colorado’s GDP.
For CPCD, which serves more than 900 children in the Colorado Springs Head Start Program, Lewis says 66% of its funding comes from the federal government. He is in his third year at the helm of the 360-employee organization and says his approach is day by day.
“My leadership style is always that the only thing that’s certain is uncertainty. You’ve got to thrive in chaos and you’ve got to stay focused in the present time, and so you worry about problems as they come along,” Lewis says.
He adds that, unlike many nonprofits, CPCD is fortunate to have a board-directed fund, established some years ago, that has accrued to around $10 million.
He says, “That is what I inherited. …The reality is I still can’t make up 66% in federal funding, but it sure does help.”
For nonprofits struggling with budget management during these unprecedented times, the go-to solution may be a more intense focus on fundraising from individual donors and corporations.
How For-Profit Businesses Can Help
Business owners not already investing in local nonprofits should know that, according to a 2018 Cone/Porter Novelli Purpose Study, 79% of Americans say they are more loyal to purpose-driven brands. Companies with the means to do so could become nonprofit event sponsors or business partners and, in addition to keeping local charities afloat during hard times, could benefit from improved bottom lines and customer loyalty.
