Foundations account for only about 2 percent of the revenues of nonprofit organizations, but still have a significant impact on the ability of many nonprofits to meet their missions. With the recent and proposed changes in the federal budget, there will be more demand on foundations to fund essential, “safety net” services, as the government moves to an “ownership or free-market ” society. A primary role of nonprofit organizations in a community is to advocate for individuals and groups who can’t speak for themselves, but the need to “do more with less” has resulted in a diminishing of that activity by many nonprofits in order to provide more services with less public support. Support by private individuals cannot make up for the reductions in government support for many organizations.

Nonprofit organizations average 35% of their revenues from government sources. Beyond the direct funding of services, the policy decisions made by government have an even greater impact on the need for services. Supporting or reducing programs and services that have long-range effects ultimately reduces the need for services in the future – e.g. support for childhood vaccination programs to reduce the incident of diseases later in life that are most costly to treat and have disability ramifications.

The Congressional Budget Office estimates that proposed changes to the federal estate tax laws will reduce charitable contributions from individuals and estates by $13-25 billion, a loss greater than the total of all the grants made by the 100 largest American foundations. This would be in addition to a decrease in federal revenue of $80 billion a year due to the repeal of the estate tax and $9 billion a year in state tax revenues because of the relationship of state taxes to federal policies. In the resounding words of a former astronaut piloting Apollo 13, "Houston, we have a problem!"