It’s no secret that New Jersey is facing an especially hard budget outlook. Governor Sherrill’s proposed FY 2027 budget reflects a series of realities about the fiscal challenges New Jersey is facing.

Critical federal funding is being reduced or threatened, New Jersey has ongoing obligations from pensions to public employee healthcare, and our residents are in the midst of an affordability crisis.  

In this climate, the Governor has made it clear that individual line-item appropriations – sometimes referred to pejoratively as “Christmas tree items” – will be subject to extra scrutiny this year.  

There is legitimate concern about New Jersey’s finances and a lack of transparency and significant last-minute changes that have too often been a hallmark of our state budget process.   

But for our state’s nonprofit organizations, these appropriations aren’t pork. They are a lifeline for vital programs that help keep people fed, healthy, housed, and safe. Examples include energy assistance to vulnerable households; dental services for low-income children; support for first responders; hospice care for seriously ill patients; promoting economic mobility through entrepreneurship; services for veterans; local infrastructure projects; and many more. 

Our state’s nonprofits are facing severe challenges at a time when people are increasingly turning to them for help. The 2026 survey report from the New Jersey Center for Nonprofits shows that rising expenses and demand for nonprofit services are significantly outpacing funding – a longstanding problem with deep ramifications for delivery of programs and services in our communities. 

Roughly 75% of surveyed organizations reported that demand for their services had risen in 2025, but only 43% said that funding had increased in the same period. Worse yet, although three-quarters of nonprofits predicted that expenses and the need for their programs would continue growing in 2026, only 39% expected their funding to increase.  And nonprofits are still struggling with significant workforce shortages that threaten their ability to meet community needs.  

The federal landscape is exacerbating these problems. Implemented and planned cuts to vital programs such as Medicaid and SNAP and many others mean more hardship in communities and more people looking to nonprofits for relief.  The federal funding and policy environment is wreaking havoc on nonprofit missions, budgets, and programs serving New Jerseyans.

Nearly 40% of surveyed New Jersey nonprofits that receive federal funds, including state pass-throughs, reported that at least some of those funds had been canceled, rescinded or not renewed over the past year, with severe consequences for the communities served and for organizational stability.  Our state’s philanthropic community has been working closely with nonprofit partners to address the situation, but increased philanthropic dollars can’t fill the gaps created by government cuts.  

To be clear, nonprofit programs are not just “nice-to-haves.”  New Jersey’s 44,000 charitable nonprofits are a major part of the economic engine, employing nearly 10% of the state’s private workforce, and factoring heavily in decisions of where to live, work, raise a family, or locate a business.  

Unpredictable funding swings and a chaotic federal policy environment are taking a deep toll on these organizations and threatening the viability of essential programs and the physical and mental well-being of clients, staff and volunteers.   

Day in and day out, nonprofits show up for all New Jerseyans, often unseen and often in the face of extreme challenges, providing essential programs and services and strengthening our economy. Nonprofits are making life in the Garden State better for all New Jerseyans under extremely trying circumstances. We can’t afford to pull vital support when it’s needed the most.

Linda Czipo is president and CEO of the New Jersey Center for Nonprofits, the statewide network, champion and go-to resource for and about New Jersey’s nonprofit community. Founded in 1982, the Center exists to build the power of New Jersey’s nonprofit community to improve the quality of life for all people of our state. The Center provides professional education, advocacy, resources, training and information to strengthen nonprofits and help them thrive in pursuit of their charitable work. The Center is a New Jersey nonprofit organization and a 501(c)(3) publicly supported charity. For more information, visit njnonprofits.org.

The opinions expressed in this op-ed are those of the author and do not necessarily reflect the views of ROI-NJ.