Amid federal funding cuts, housing nonprofits seek to change the narrative toward solutions 

Candid data shows that housing and shelter organizations are the nonprofits most likely to depend on government grants for 50% or more of their revenue.  

As part of the Candid Conversations series on the impact of federal funding cuts, we recently hosted a peer learning session for nonprofits focused on housing. It featured three housing nonprofit leaders and drew an audience of around 100.  

Here are some of the top concerns, responses to cuts, and strategies discussed:  

1. HUD’s budget will be cut nearly in half in 2026 

The U.S. Department of Housing and Urban Development (HUD) will have its budget cut by 44% for 2026. The panelists, whose organizations range from under $500,000 to over $1 million in revenue, all said they would feel the impact.  

“Unfortunately, I have to say I am part of that 23% of housing nonprofits that” Candid data suggests “could run out of funding within three months without government support,” said M. Mena Davis, executive director of All Things Women in Detroit, MI, which provides shelter to unhoused women.  

Shana Miller, director of community engagement at the Summit County Continuum of Care (CoC) agency in Akron, OH, which supports 34 local housing programs, said approximately 85% of their funding comes from HUD.  

Britta Fisher, CEO of the Colorado Coalition for the Homeless, the largest supportive housing provider in that state, said they are diversified and may be impacted by both cuts to HUD and changes to Medicaid to provide health care to clients. 

2. Funding cuts put more than shelter at risk 

The panelists pointed out that housing nonprofits also offer supportive services such as medical care, mental health services (including addiction recovery), and workforce training.  

“We take an integrated care approach in delivering health care,” said Fisher. Tooth pain is one thing that will get most people in for care, she noted, and then they might consent to a more thorough health screening that could uncover other problems.  

But the federal funding cuts are forcing housing nonprofits to cull services—including core shelter services. Davis said she has had to adapt in creative ways, like facilitating shared housing arrangements—putting two families in an apartment designed for one. “We’re going to have to be almost ruthless in deciding what is priority, and what is not…. It’s just a really unfair situation that people who need us the most are being put in right now.” 

3. ‘Housing first’ no longer guides HUD 

After years of promoting “housing first”—a proven strategy that prioritizes obtaining permanent housing for an individual before addressing other issues like health, substance use, or employment—HUD said it would emphasize “treatment first” and transitional housing with a two-year limit. The National Alliance to End Homelessness estimated that the new rules could mean that 170,000 people will lose their homes. (On December 8, 2025, facing a lawsuit that included the alliance among the plaintiffs, HUD announced it was reconsidering the new rules. On December 19, a federal judgeissued a preliminary injunction on the rule change.)  

“There’s a huge emphasis now on supportive services,” said Miller. “Which could be fantastic, except that the assumption is being made that everyone who is homeless has some kind of mental disability and/or substance abuse issue, which is not the case. It totally ignores the working poor, who are in their cars, or in encampments, or actively seeking shelter.”  

Fisher also decried the new HUD procurement process, which she said favors those who can complete the application fastest and asks irrelevant questions about such things as gender ideology. 

4. Shifting the narrative around ‘homelessness,’ emphasizing solutions

In courting private funders, Davis said she tries to change the narrative around homelessness. “We’ve used our social media to introduce people to unhoused people that don’t look like the traditional homeless population. Women who are just working. We do interviews with them and show them in social settings and holidays and different things like that.” She and the other panelists have also successfully enlisted those with lived experience in an advisory capacity to help set priorities and strategies for their organizations. 

“I know that there’s some polling showing people have less empathy for the homeless, but at the end of the day, when we show individual people with needs, our communities respond,” said Fisher. “No one wants people to starve or freeze to death. These are things that people will get behind. What they need to hear from us is solutions. Sometimes we’re so busy defining the problem or talking about the problem, we’re not talking about what works.” 

Housing nonprofits seek opportunities in a crisis 

Several panelists and participants noted that in the face of federal funding cuts, more community support has materialized. For example, local churches in Detroit that were closing up due to shrinking congregations offered Davis their space. 

Fisher noted, “A lot of the programs that people rely on for the safety net were produced for an economy that existed 100 years ago. So, how can we take disruption and channel it towards a better path forward is also what I want to spend time on. How do we solve the problem, not just for today and next year?”  

“Homelessness isn’t just a problem for homeless people,” Miller concluded. “It is a community problem. It is a public health problem. It is a safety problem. It is a humanity problem.” 

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