Earlier this summer, Congress passed HR 1, One Big Beautiful Bill Act or the Reconciliation Bill, which resulted in cuts to Medicaid and SNAP investments to states. As we determine the full impact of that law, Congress has already moved to pass one federal rescission package this summer, HR 4, Rescissions Act of 2025, with another on the horizon. While rescissions are not unusual, the scale of these proposals could seriously disrupt the federal funding that Delaware nonprofits rely on to serve their communities. 

The first package, passed in July, rescinded $9 billion in previously approved federal funds. Among the cuts: $1 billion from the Corporation for Public Broadcasting (CPB) and $8 billion from USAID and global health programs. These cuts jeopardize access to educational programming via Delaware Public Media, Delmarva Public Radio, WHYY and reduce support for public health efforts, and weaken long-term global partnerships in health and development. 

A second rescission package is anticipated, this time targeting domestic priorities. Programs supporting adult literacy, English instruction, and educator development are reportedly at risk. If enacted, these cuts could significantly reduce community-based education initiatives, many of which are led by Delaware nonprofits. 

The stakes are high. Under the Congressional Budget and Impoundment Control Act of 1974, Congress has 45 working days to act on a rescission request from the White House. During this time, the funds in question are effectively frozen, delaying access to critical resources. The administration has also signaled its intent to use “pocket rescissions,” withholding funds until they expire, despite a 2019 Government Accountability Office (GAO) ruling that such actions are unlawful. Legal challenges are expected, but even the uncertainty can disrupt nonprofit operations and planning.  

What does this mean for Delaware nonprofits? 

Delaware’s fiscal 2026 budget includes more than $1 billion in federal funding for Medicaid and the Delaware Healthy Children Program — both impacted by HR 1. Other affected programs include school-based health centers, early childhood education, the Clean Water State Revolving Fund, SNAP and TANF administration, and behavioral health services. A 5-10% federal cut could put millions of dollars at risk for essential state services, many of which are delivered by nonprofits through contracts and grants. This puts nonprofits in a vulnerable position when government is both their primary customer and their primary funder — and those funds are shrinking.  
While Delaware has strong reserves, continued federal cuts, combined with slow revenue growth, could strain those funds. For nonprofits, this means greater uncertainty, tighter budgets, and tough decisions.  

As leaders in helping communities, Delaware’s nonprofits cannot afford to be passive observers. Now is the time for action. DANA will continue monitoring these developments, coordinating with the National Council of Nonprofits, and equipping our members with the tools to adapt, advocate, and lead.   

Nonprofit leaders can begin planning for future sustainability by attending DANA’s upcoming Scenario Planning Clinics—half-day sessions focused on impacts in Wilmington on August 12 and Georgetown on August 13, and full-day sessions focused on solutions in Georgetown on September 3 and Wilmington on September 5—to navigate the shifting landscape and build responsive, resilient, and mission-aligned strategies.  

The strength of our sector depends not just on navigating cuts — but on demanding smarter, fairer funding in the communities we serve.