As Georgia’s 2026 General Assembly opens, nonprofit leaders face a rapidly shifting fiscal and policy environment shaped by both state budget decisions and critical federal budget negotiations. Decisions made over the next few weeks – at both the state and federal levels – will have lasting implications for funding stability, workforce capacity, and community impact across Georgia.
Understanding these trends is essential to securing stable resources for communities across the state, particularly in light of growing demand for nonprofit-delivered services.
State Budget & Policy Landscape
Georgia begins this session with a historic revenue surplus, positioning lawmakers to debate tax relief, one-time investments, and long-term structural changes to the state budget.
In accordance with his final State of the State address, Governor Brian Kemp released his FY 2027 budget recommendations, with continued emphasis on affordability, tax relief, and targeted investments meant to make the most of his final year in office.
Of particular interest to nonprofits is a major push to address homelessness, including a $50 million Homelessness Response Grant program. Kemp’s budget will also use $46.4 million to make up for federal cuts in SNAP funding (reversing his previous position) and $41 million to help make up for a DFCS budget shortfall, plus $5 million for skilled nursing centers and nearly $4.5 million to fund new medical residents.
Other significant proposals:
- Cost-of-living relief in the form of income tax rate cuts and tax rebates of $250-$500 for individuals and families, as well as a $2,000 bonus for state employees, including K-12 teachers.
- Education and workforce spending, including $325 million for a needs-based DREAMS Scholarship program, continued funding to bring down Pre-K classroom size, a $100 million investment in the Technical College System of Georgia, and an Education and Workforce Strategy Act to deepen collaboration between the University and Technical College Systems.
- Major infrastructure investments, including a $1.8 billion express lane project in Henry County, $350 million in road and bridge repair projects across the state, and a $35 million natural gas expansion for rural communities.
Kemp’s proposed budget will next head to the General Assembly for review and possible revision.
Bottom line for Georgia nonprofits
The core question is not whether resources exist, but how they are allocated:
- Will state agencies receive sufficient funding to maintain contracts with nonprofit service providers amid rising costs?
- How will workforce pressures – especially in healthcare, behavioral health, childcare, housing, and aging services – be addressed?
- Will one-time funds be used to stabilize systems that are under long-term strain?
Nonprofits should pay close attention to budget pre-files and agency requests, as flat funding in a high-inflation environment effectively functions as a cut.
Legislative priorities: Tax policy meets service delivery
Under the leadership of the Georgia General Assembly and Lt. Governor Burt Jones, lawmakers are advancing competing tax proposals, including income-tax reductions and property-tax relief. While tax cuts are politically popular, they also carry downstream implications for state revenues that support education, health, housing, and human services – many of which are delivered through nonprofit partners.
At the same time, legislators are signaling interest in affordability, workforce participation, and economic competitiveness. This creates an opportunity for nonprofits to reinforce a core message: strong nonprofits are essential economic infrastructure, supporting workforce stability, family well-being, and community resilience.
Bottom line for Georgia nonprofits
- Even with strong revenues, flat state agency funding in the face of inflation equates to hidden cuts for service providers.
- Tax policy changes may limit future flexibility for sustained services unless paired with targeted investments in nonprofit-aligned missions.
What to watch: Early known issues impacting nonprofits
Known priorities of the Governor and Lt. Governor:
- Taxes: Gov. Kemp and the General Assembly are expected to continue lowering taxes. “Hot button” issues include income debates over income tax elimination and property taxes.
- Insurance: The December conclusion of the House Blue-Ribbon Committee on Insurance Rates means that related legislation could be introduced this session.
- Workforce preparedness and education: Gov. Kemp is proposing a new Education and Workforce Strategy Act to build on the Top State for Talent program passed in 2024. In addition, Lt. Gov. Burns has stated that his “number one” priority is literacy. Watch for new legislation around learning disability screening, middle school reading coaches, school safety, and cell phone bans.
- Homelessness: Gov. Kemp has announced a new $50 million Homelessness Response Grant program which will support local governments and nonprofits addressing street-level homelessness.
Other known nonprofit-related or -adjacent issues:
- Youth in foster care: Study committee recommendations are likely to become bills pushing improvements in housing, education, and workforce supports for youth transitioning out of care. (Other actionable recommendations include convening agencies around school voucher program participation and potential legislation on school enrollment and credit transfer.)
- Childcare: Proposed capital funds for childcare agencies
- Housing: Limits on institutional ownership of single-family homes and sales tax exemptions for construction purchases related to affordable housing development.
Federal Outlook: Uncertainty Still Looms
At the federal level, Congress is operating under a continuing resolution, with several major funding decisions still unresolved. Potential reductions or restructuring in Medicaid, SNAP, housing, childcare, and behavioral health programs could shift additional pressure onto states and nonprofits later this year.
In case you missed it, a directive to end $2 million in grants from SAMHSA for addiction and mental health grants has been reversed. However, the threat of a freeze on TANF funding, affecting safety net funding for low-income families, is ongoing – though (to this point) this freeze is directed at a short list of Democrat-controlled states (California, Colorado, Illinois, Minnesota, and New York).
Federal Budget Minibus Appropriations & Policy Risks
Congress is moving toward full-year FY 2026 funding through a series of “minibus” appropriations packages – groupings of annual spending bills that together fund different parts of the federal government. These appropriations seem to mark a bipartisan rejection of the most extreme proposed federal cuts, offering modest reductions in some agency budgets while maintaining core operations and limiting sweeping reorganizations.
These decisions will shape federal grants and critical programs serving nonprofits and the communities they support.
Current Federal Appropriations Status
On January 5, the U.S. House of Representatives passed a bipartisan minibus that includes three full-year appropriations bills for Commerce, Justice, and Science (CJS); Energy and Water; and Interior, Environment, and Related Agencies. This minibus package now moves to the Senate, which is expected to take up the legislation the week of January 12.
Bottom line for Georgia nonprofits
- The Interior bill includes no cuts for the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH), funding them at $207 million each.
- The CJS bill largely maintains domestic violence and general victim-assistance programs at 2025 levels.
- However, the CJS bill funds the Legal Services Corporation at $266 million less than 2025.
Projected Upcoming Minibus
Several major spending bills have not yet been finalized in both chambers and must be resolved to avoid expiration of funding. The main concern for nonprofits is the minibus currently before the house which includes three department budgets: Labor, Health and Human Services, Education (LHHS/Ed); Transportation, Housing and Urban Development (THUD); and Defense.
Appropriations of significance to nonprofits within this minibus:
- Rental assistance (tenant-based and project-based)
- Homelessness assistance (e.g., Continuum of Care funding)
- Community development tools that often flow through localities to nonprofit implementers (e.g., CDBG, HOME)
- Head Start
- Disability services
- Child Care & Development Block Grant (CCDBG)
- Substance Abuse and Mental Health Services Administration (SAMHSA), covering behavioral health funding
- Health Resources and Service Administration (HRSA), covering the community health workforce and the healthcare safety net
- Centers for Disease Control (CDC) and National Institutes of Health (NIH), including public health and research grants
- Education formula and competitive grant programs, which frequently sub-award to nonprofits
Congress must finalize these appropriations and reconcile House and Senate versions before the next government funding deadline, Jan. 26. If not, stopgap funding will be extended again, likely disrupting federal awards and planning for nonprofits.
Bottom line for Georgia nonprofits
At this point in the process, nonprofits should be:
- Preparing for increased demand should federal supports tighten.
- Monitoring whether the state backfills federal reductions – or passes costs downstream.
- Elevating local impact stories that translate federal policy changes into real community consequences.
Other Key Federal Issues for Nonprofits
1. The House has voted to extend ACA subsidies.
The House voted 230 to 196 to pass a three-year extension of enhanced Affordable Care Act premium subsidies. Negotiations now move to the Senate where a compromise bill is expected as early as the week of Jan. 12. Note that, even if subsidies are passed by both chambers, it is uncertain whether the White House will decide to veto this measure.
2. New childcare “Defend the Spend” requirements may impact funding flows.
Following fraud investigations in states including Minnesota, New York, and Colorado, federal agencies have increased scrutiny, slowed approvals, and tightened oversight across the Child Care and Development Fund (CCDF) pipeline nationwide. Reports from providers indicate concern that there may be delays, but providers have not noted severe delays at the current time.
3. Changes to HUD Continuum of Care funding are facing challenges in court.
In November 2025, the Dept. of Housing and Urban Development implemented changes to the Continuum of Care (CoC) Notice of Funding Opportunity (NOFO). Nonprofits have filed suit, alleging that these changes – altering scoring rules and funding priorities mid-process – have materially disadvantaged nonprofit providers without adequate notice, transition time, or procedural safeguards.
On Dec. 19, a federal judge issued a preliminary verbal injunction. HUD issued a new NOFO, but the court has since issued a written ruling which held the injunction, which has:
- Halted HUD’s decision to cancel the 2-year FY24/25 NOFO
- Blocked the most recent NOFOs and conditions issued by HUD
- Stated – but not required – that HUD should take all steps necessary to process eligible FY25 renewals
HUD is currently processing renewals under the prior NOFO structure but funds are not yet obligated. We anticipate that the administration will appeal this ruling, in which case it could be heard by the Supreme Court.
Opportunities for Nonprofits in Both Federal & State Current Issues
Despite the uncertainty, this moment presents meaningful opportunities for nonprofit leaders in terms of advocacy:
- Engage early. Budget decisions are most influenceable before they are finalized. Early education matters.
- Frame nonprofits as solutions. Nonprofits are not peripheral: They are delivery systems, employers, and stabilizers.
- Coordinate voices. Cross-sector alignment strengthens credibility and impact.
- Translate policy into people. Lawmakers respond to clear, concrete stories tied to their districts.
Nonprofit leaders can also learn more about the federal earmark process, and how to take advantage, at two upcoming informational Lunch & Learn sessions with Senator Raphael Warnock’s outreach team, hosted by SouthState Bank:
- Session 101, detailing the Congressional District Spending process and how to take advantage of it, is coming up January 30. RSVP by Jan. 23.
- Session 201, giving your the chance to workshop your funding request with Sen. Warnock’s team, will be held February 6.
Bottom line for Georgia nonprofits
Nonprofit leaders should track budget hearings, monitor bill introductions, and be prepared to engage as proposals evolve. Here’s how:
- Bookmark the Georgia General Assembly schedule and look for “Appropriations” and “Budget” events.
- Monitor bill activity using LegiScan’s index of active bills.
- Set news keyword alerts for funding areas of interest (e.g., “childcare,” “housing,” “behavioral health”) using Google Alerts.
- Track committee agendas weekly. Many budget-related hearings will post their agendas publicly up to 72 hours in advance. (To find the agenda, navigate to the Assembly schedule and click the name of the meeting. If available, the word “AGENDA” will be linked to a PDF.)
- Subscribe to GCN communications for updates on policy matters impacting nonprofits.
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