Nonprofits are the beating heart of America’s civil society. Neighbors helping neighbors, churches serving the needy, communities coming together to solve problems without waiting for Washington. Alexis de Tocqueville marveled at this spirit nearly two centuries ago, calling it essential to our democracy.
That independence also relies on separation from the state. Yet today, almost one-third of nonprofit revenue comes directly from government funding. For large organizations, it’s closer to half. Instead of being citizen-driven, too many nonprofits are becoming taxpayer-financed instruments of government.
This shift isn’t just unhealthy, it’s dangerous. As documented in a new paper for Philanthropy Roundtable, “The Growing Dependence of Nonprofits on Government Funding,” federal grants to nonprofits have more than doubled since 2008, with most of that growth occurring since 2019. This dependency hollows out the very qualities that make civil society strong.
When the Trump administration briefly froze federal grants in January in a long-needed attempt to rein in out-of-control government spending, thousands of nonprofits were thrown into chaos. That moment revealed just how fragile and politically captive many of these organizations have become. They are no longer accountable to donors and communities. They’re increasingly accountable to bureaucrats and politicians.
The damage of this dependency is already showing. Missions are drifting. Nonprofits increasingly bend their programs to meet government criteria instead of community needs. Creativity and innovation give way to compliance and paperwork.
Charity itself is being crowded out. Studies show government dollars displacing private giving for every taxpayer dollar spent. That means less genuine philanthropy, fewer voluntary bonds of trust, and more dependence on bureaucracy.
And remember who benefits most: the big players. Government money disproportionately flows to large, established nonprofits, squeezing out smaller community organizations. Instead of vibrant pluralism, we get a homogenized sector shaped by federal rules and priorities.
This is not what Tocqueville praised. It is the slow bureaucratization of civil society turning voluntary associations into quasi-governmental contractors. And it undermines the very principle conservatives should care about most: that strong societies are built by free citizens, not by government handouts.
If America’s nonprofit sector is to remain the backbone of self-government, policymakers must reverse this trend. That means reducing structural reliance on federal dollars and ensuring nonprofits stay accountable to the people they serve, not to Washington.
A self-governing nation depends on an independent civil society. As stated in “The Growing Dependence of Nonprofits on Government Funding,” this isn’t just about dollars and cents. It’s about whether we preserve the Tocquevillian ideal of free citizens solving problems together or surrender that role to the state.
Read the full paper here.
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