As we enter March, the federal government is once again facing a critical funding deadline. The current Continuing Resolution (CR)—a temporary funding measure to keep the government running—expires on March 14. If Congress fails to pass a new budget or another short-term extension, the government could shut down, disrupting funding for essential programs, federal agencies, and nonprofit services.

For Delaware’s nonprofit sector, the coming weeks are crucial. The reconciliation process could still play a role in shaping long-term budget decisions, tax policy, and funding levels for social services. Let’s break down what this means, the potential risks of a government shutdown, and how nonprofits can prepare.

What is the Federal Reconciliation Process?

Reconciliation is a special process that Congress uses to fast-track budget-related laws. Unlike regular bills, which require 60 votes in the Senate to overcome a filibuster, reconciliation bills need only a simple majority (51 votes) to pass. This makes it a powerful tool when lawmakers struggle to agree on spending and revenue policies.

The process follows these key steps:

• Congress Passes a Budget Resolution – This sets spending and revenue targets for the year.
• Committees Draft Spending and Tax Changes – Lawmakers decide how to adjust funding for different programs.
• One Final Bill is Created – All budget-related changes are combined into one piece of legislation.
• Senate Votes with a Simple Majority – Because it bypasses the 60-vote filibuster rule, it can be passed with fewer votes.
• President Signs or Vetoes the Bill – If approved, the changes become law.

Reconciliation has been used in the past for major legislation, including tax cuts, healthcare funding, and pandemic relief.

What’s the Timeline in 2025?

As of early 2025, Congress is facing major budget battles, with potential delays that could lead to a government shutdown if funding agreements are not reached. The reconciliation timeline follows these general phases:

• Spring: Congress begins negotiations on budget priorities.
• Summer-Fall: Lawmakers draft and debate reconciliation proposals.
• September 30: In a normal year, this is the deadline for spending bills—if no agreement is reached or a CR passed, the government may shut down.
• End of the Year: Final votes on any reconciliation measures still under consideration.

This year’s timeline is crucial, as the federal government is currently funded through a continuing resolution passed in December, set to expire on March 14. A government shutdown could disrupt federal funding for nonprofits, delaying grants, reimbursements, and essential services.

How Could a Government Shutdown Impact Nonprofits?

If lawmakers fail to reach a budget agreement by March 14, the federal government could shut down, meaning many agencies will stop operating until a new spending bill is passed.

Here is how that could affect Delaware’s nonprofit sector:

• Delayed Federal Grants & Payments – Organizations relying on government contracts may experience funding gaps.
• Impact on Social Services – Programs like food assistance, housing support, and healthcare services could see disruptions.
• Uncertainty for Employees & Volunteers – Nonprofits with federal partnerships may face staffing or program delays.

Even if a shutdown is avoided, reconciliation decisions will shape funding priorities, making it critical for nonprofits to stay engaged. Specifically, this year, some lawmakers are aiming to codify certain Trump-era Executive Orders—currently being challenged in court—into law through the reconciliation process.

What Can Delaware Nonprofits Do?

With so much at stake, nonprofits should take steps to stay informed and advocate for their priorities:

• Monitor Budget Developments – Follow updates from policymakers and nonprofit advocacy groups.
• Communicate with Lawmakers both at the Federal level and the state level – Share how funding decisions will affect the communities you serve.
• Partner with Nonprofits in Other States – Collaborate with sister organizations in states where legislative support is lacking to amplify advocacy efforts and engage their members of Congress in support of critical nonprofit priorities.

The 2025 budget process is shaping up to be one of the most contentious in recent years, with real consequences for nonprofits and the communities they serve. Whether through reconciliation or last-minute budget deals, the outcomes will determine funding levels, tax policies, and social service resources for years to come.

Nonprofits must prepare for disruptions, advocate for their needs both at the state and federal levels, and ensure their voices are heard in these critical discussions.