Navigating the 2025 Government Shutdown: A Briefing for Georgia Nonprofits

A government shutdown occurs when Congress fails to pass funding legislation (appropriations bills or a continuing resolution) for federal agencies and programs. 

Without legal authority to spend, many federal operations pause, and hundreds of thousands of federal employees are furloughed. Essential functions (e.g., Social Security, Medicare, Medicaid benefits, public safety, and national security) generally continue, but administrative and non-essential activities are delayed or suspended.

Federal fiscal years run from October 1 to September 30. Each year, Congress must pass 12 appropriations bills or a temporary stopgap measure (a continuing resolution, or CR) to keep agencies funded. A shutdown risk arises when:

• The House and Senate advance different topline spending levels or priorities and cannot reconcile them by the deadline.
• Policy “riders” (e.g., immigration enforcement, spending cuts, or program restrictions) are attached to funding bills and face opposition in the other chamber.
• There are not enough votes to reach the 60‑vote threshold required for most Senate legislation, which can occur without compromise.
• Negotiations on separate issues (disaster aid, emergency supplements, offsets) become linked to the CR, complicating timing.

When these conditions converge near the October 1 deadline – and a clean CR is not agreed to – agencies lose spending authority, triggering a shutdown.

During a shutdown, impacts ripple across the federal government, states, local governments, and communities. Among the areas affected:

• Essential services. Activities necessary to protect life and property continue, though with reduced administrative support. This includes Social Security checks, Medicare, Medicaid, law enforcement, TSA, and military operations, among others.
• Non-essential services. National parks, museums, research, and many administrative functions (grant reviews, audits, technical assistance) are suspended.
• Federal employees. Thousands are furloughed without pay; others work without immediate pay if deemed essential.
• Nonprofits. Delays in reimbursements, greater demand for services, and reduced communication/support from federal partners are likely.
• States. State-administered federal funds may continue for a limited time, but federal oversight and approvals slow, creating delays.
• Local governments. Uncertainty is to be expected regarding federal pass-through grants, housing assistance, and program approvals.

Nonprofits are directly and indirectly affected by a shutdown in several ways:

• Delayed federal reimbursements. Drawdowns and contract payments may not be processed if staff approvals are required. This may disrupt a nonprofit’s capacity to deliver services and pay their staff or vendors, and may mean some use reserves to continue operating.
• Increased service demand. If benefits like WIC or housing vouchers pause, nonprofits providing food, shelter, or case management could see demand surges.
• Slowed grant administration. Application deadlines, renewals, technical assistance, and program monitoring often pause during shutdowns which backlog and delay progress and disrupt planning and execution.
• Uncertainty for planning. Program continuity and staffing decisions become difficult without clear federal guidance.

Nonprofits should take these proactive steps to cope with disruption.

1. Reach out to administrative contacts before they are furloughed to push through pending reimbursements and ask for guidance. 
2. Submit any pending draws, extensions, or grant amendments immediately if systems are open.
3. Review cash reserves and forecast 8–12 weeks of liquidity. Seek board approval to use reserves or credit lines.
4. Prepare contingency plans for the programs that are most vulnerable to cuts (e.g., WIC, HUD housing).
5. Communicate with staff, boards, and clients using clear, plain-language updates.
6. If you must furlough staff, be mindful of Georgia and federal laws and regulations. (See this toolkit for more information.)
7. Coordinate with peer organizations, food banks, shelters, and health centers for referrals and overflow capacity.
8. Document impacts and share them with funders, associations, and policymakers to inform advocacy efforts.
9. Monitor the contingency plans posted by relevant federal departments. (See below)

Click here to access our Government Shutdown Toolkit, designed to help you work through your specific scenario.

The length of a government shutdown depends on political negotiations. Some shutdowns have lasted only a day or two, while others extended several weeks. The longer a shutdown lasts, the more severe the impact on reimbursements, service demand, and community stability.

Currently, the earliest date that the 2025 shutdown can be resolved is Monday, Oct. 6th, when Congress is expected to reconvene. 

As explained in an advisory from Holland & Knight LLP:

OMB’s Circular No. A-11 (August 2025) provides that activities financed with appropriations that have not lapsed can continue to operate in a shutdown, which could include mandatory funding (i.e., reconciliation bills or entitlement program funds) or unexpired prior-year funding with valid apportionments. However, the salaries of agency personnel executing or supporting these legally exempted activities may be funded by lapsed appropriations, so whether a particular program will continue to operate in practice can best be determined by reviewing the agency’s contingency plan. OMB states these plans will be posted to agency websites once approved by OMB.

In the case of a potential shutdown, each federal agency publishes a contingency plan detailing the functions that will continue to be provided and the federal workers who must report to work (i.e., those deemed “essential”).

In previous shutdowns, contingency plans for a lapse of appropriations have been posted a week ahead of a potential shutdown on the OMB website. Under the current administration, these plans will be posted to each agency’s website separately as they are approved by the OMB.

As of now, these are the updated agency contingency plans that have been published:

• Social Security Administration
• U.S. Department of the Army
• U.S. Department of Education
• U.S. Department of Health and Human Services
• U.S. Department of Justice
• U.S. Department of Labor
• U.S. Department of Transportation
• U.S. Department of the Treasury
• U.S. Department of Veterans Affairs
• U.S. Environmental Protection Agency
• U.S. Food and Drug Administration

If the above list does not include the agency that your nonprofit is working with currently, be sure to monitor their website for updates.

Updates may also be found through:

• Grants.gov (updates on grant deadlines and processes)
• Georgia agency websites (for pass-through program updates)
• Subsector-specific associations and coalitions (for alerts)

You may also look to online resources from the Congressional Research Service for information on the implications and history of government shutdowns.

• Government Shutdowns and Executive Branch Operations: FAQs
• Past Government Shutdowns: Key Resources
• Federal Funding Gaps: A Brief Overview