As another week closes on the Government shutdown, we reflect on the impact felt so far by our nonprofit clients:

  • Social Security and Medicare Benefits – these continue to be paid out, but there could be delays in processing new disability applications if the shutdown continues. Unemployment benefits are also still being paid.
  • Federal Grant Administration - grantee activities and projects already funded under existing grants will generally be able to continue to the extent the grantee has available funding. A number of federal agencies have shut down their payment request systems leaving nonprofits unable to draw down federal funds. Federal Financial Reports (FFRs) and progress reports are not able to be submitted. All on-site monitoring visits and enhanced programmatic desk reviews scheduled during the period of the funding lapse will be postponed or cancelled.
  • Veterans Services – veterans are still able to get inpatient care at hospitals and mental health counseling at veteran’s centers and outpatient clinics, but clearing the backlog in disability benefit claims has been stalled.
  • Federal Courts – after next Tuesday all non-essential work will be shut down.
  • Education – the impact on school districts, colleges and universities has been minimal so far and student loans have continued to be paid out. However if the shutdown continues for any significant length of time, districts and higher education institutions that rely on federal dollars to fund programs (such as those for special education students) could be challenged.
  • IRS – non-essential operations have been suspended and call centers are not staffed. Applications for exempt status will be further delayed and audits have been put on hold (perhaps good news!).
  • Affordable Care Act – continues to roll out with thousands applying for health insurance through Covered California.

In general, if the shutdown lingers, our nonprofit clients will likely start to feel more of an impact as cash flow becomes a challenge and demand for services increases, so we hope for a speedy resolution to the standoff.

Wilson Donella halfbody

Donella Wilson

Donella Wilson, CPA, leads GHJ’s Nonprofit Practice and is also President and Chief Philanthropy Officer of GHJ Foundation, GHJ’s vehicle for purposeful and proactive giving to the community. A leader in both the nonprofit and accounting communities, Donella was named a finalist in the 2021 Los…Learn More