The majority of Ohio nonprofits backed by government grants would not be able to cover their expenses if they were to lose those funds, a recent study found.
The study, conducted by D.C.-based economic think tank the Urban Institute, shows that more than 72% of nonprofits in Cuyahoga County, as well as more than 65% in Lorain, 55% in Medina, 67% in Stark and 77% in Summit counties would be at-risk without government support, according to figures on their 2021 tax filings. Statewide, 72% of nonprofits would be in the red without government funding.
The Urban Institute released its findings, which included government funding from local, state and federal sources, at a time when President Donald Trump has created uncertainty for nonprofits nationwide by freezing, then unfreezing, all federal spending and slashing thousands of federal jobs.
That uncertainty is affecting nonprofits in Northeast Ohio, said Rob Fischer, who chairs the Master of Nonprofit Organizations Program at Case Western Reserve University in Cleveland.
“There's a lot of speculation now, but what it definitely has done is it has caused an across-the-board tightening of how people are thinking about their revenue,” said Fischer. “Which means … they're going to delay spending on anything they can, and they're not going to make longer-term investments until they get some assurance that things have stabilized.”
That could affect Cuyahoga County's wider economy. Research from the Cleveland Foundation says nonprofit organizations account for nearly a third of the county’s total gross domestic product.
Large nonprofit organizations may feel shockwaves if government funding is cut, Fischer said, but added it's the smaller organizations that make up a larger share of local nonprofits and are more likely to suffer from funding cuts. Two-thirds of Cuyahoga County’s nonprofits have revenues of $500,000 or less.
“We're all familiar with Cleveland Clinic and Case Western Reserve and UH, but we often don't think about the street-level nonprofits, but they are a vital part of the fabric of our community,” Fischer said.
In 2022, the total federal grants to states topped $1 trillion for the first time fueled by pandemic stimulus and infrastructure spending, according to the Pew Charitable Trusts. More than 40% of Ohio's state revenue came from federal funds, the data shows.
In Ohio, nonprofits received a total of $8 billion in government grants, with Cuyahoga County (Cleveland), Franklin (Columbus) and Hamilton (Cincinnati) receiving the most government funding, the study showed.
Of the counties that house Ohio's biggest cities, Franklin County nonprofits are the most vulnerable, the Urban Institute report shows. With 726 nonprofits receiving government funding, almost 84% would be in the red if all government funding was lost.
Cuyahoga County has about 6,000 nonprofits, according to the Cleveland Foundation; 550, or about 10%, of those receive government grants. But even those who are not directly at risk may feel the effects of cuts, Fischer said.
“Even if my nonprofit doesn't have [a government grant] directly, that money is in the systems and in the environment around me,” he said. “So if it evaporates, it's going to affect everything else because money gets displaced when other money goes missing. So if the feds withdraw, even though those smaller nonprofits may not be benefiting directly from a government grant, it might affect their other revenue sources that they have because it affects other partners that they work with.”
According to the study, Cuyahoga County ranks 32 out of Ohio’s 88 counties for the largest share of nonprofits that would operate at a loss if they lost government funding. All government-backed nonprofits in the rural counties of Harrison, Lawrence, Morgan, Paulding and Vinton would be unable to cover their expenses.
Overall, Ohio ranks it 12th among states with the highest percentage of at-risk nonprofits. Trump won 11 of the top 12 states with the highest share of at-risk nonprofits in the 2024 election, including Ohio.
