Nevada’s mental health nonprofits are facing a grave threat due to potential federal funding cuts, with many organizations fearing the loss of crucial resources that sustain their services. One such organization, Community Counseling Center, has experienced significant disruptions in its operations after learning that it could no longer apply for a key Department of Education grant program that supports its adolescent treatment program, which serves more than 350 people. In addition, the center was informed of steep cuts to its share of a federal grant program, threatening the continuation of vital psychosocial support and peer navigation programs for people living with HIV—services that have been provided since the nonprofit’s inception in 1990. The uncertainty surrounding these cuts has left many in the sector reeling, with concerns growing that federal changes to Medicaid could devastate the sector.
Impact of Medicaid and Federal Funding Cuts
Medicaid, which accounts for 70% of the revenue for many mental health nonprofits in Nevada, remains a key point of fear. Patrick Bozarth, Executive Director of the Community Counseling Center, expressed his organization’s overwhelming concern, stating, “That’s our number one fear right now — is what happens if Medicaid is impacted. It would be absolutely devastating.” If federal funds were cut, nonprofits would face an uphill battle to stay afloat, threatening the services they provide to vulnerable communities.
Nevada has long struggled with inadequate mental health care funding, often ranking near the bottom nationwide. The situation has worsened since the Trump administration took office, leading efforts to reduce government size and, by extension, federal spending. A recent shift in priorities, spearheaded by Elon Musk’s Department of Government Efficiency (DOGE), has only intensified these fears, as it seeks to slash expenditures, including Medicaid—despite statements from GOP officials indicating otherwise.
Nonprofits on Edge
A survey conducted by United Way of Southern Nevada revealed that 80% of 160 nonprofits surveyed believe their funding is at risk, with 58% of healthcare and education groups particularly concerned. These nonprofits have been the backbone of social services in the state, stepping in to fill the gaps in services where funding has been lacking. Robin Reedy, Executive Director of the National Alliance on Mental Illness Nevada (NAMI), stressed the importance of these nonprofits, saying, “If we don’t have that, people will have nothing.”
While no Medicaid programs have been slashed yet, nonprofits are shifting their focus from growth to survival. One nonprofit applied for nearly 20 non-federal grants in an effort to diversify funding, while others are reassessing the language used in applications to ensure they align with the current administration’s priorities. Wendy Madson, Executive Director of Healthy Communities Coalition, summed up the mood, saying, “It’s kind of this little gremlin in the back, staring us down.”
State Political Leaders Respond
The uncertainty over funding has caught the attention of Nevada’s political leaders, with Governor Joe Lombardo urging Congressional Republicans to avoid indiscriminate Medicaid cuts. Lombardo highlighted that Medicaid funding has enabled significant improvements in behavioral health care for both children and adults across the state.
However, the uncertainty surrounding funding is coming at a challenging time for mental health care nonprofits. Demand for services has skyrocketed, with one group’s non-crisis phone line receiving over 7,000 calls monthly—up from just 200 before the pandemic. At the same time, pandemic-era funding, such as the American Rescue Plan Act (ARP) funds, is set to expire soon.
The Strain on Mental Health Services
Some nonprofit leaders have expressed concern that without federal or Medicaid funding, their organizations could shut down within months. Madson stressed, “We don’t have enough funding already—the idea of cutting is unacceptable. Our people deserve better. We just can’t accept it.”
The Potential Impact on Specialized Programs
Nonprofits that provide specialized programs are also vulnerable. Step2, a nonprofit in Reno that offers long-term substance use disorder and mental health treatment for women, is concerned that it could lose its federal funding due to the administration’s emphasis on reducing diversity, equity, and inclusion (DEI) initiatives. Mari Hutchinson, CEO of Step2, fears that her nonprofit’s essential services could be deemed irrelevant under the new funding priorities. “I don’t feel like our funding is safe,” Hutchinson said.
Step2’s comprehensive services, which include transportation to appointments, personal finance courses, nutrition classes, and workforce development programs, are all funded by federal dollars. Losing this support would not only affect the organization’s ability to provide these services but would also have a cascading effect on the women and children it serves.
The Threat of Nonprofit Closures
Many nonprofit leaders believe that widespread federal funding cuts could lead to the closure of numerous organizations, leaving a massive void in services for those in need. Wendy Madson noted, “If there are sweeping cuts, you’re going to lose your nonprofits. And I don’t think anybody could understand the impact of that until seeing it because every nonprofit I know goes way beyond their scope and their funding.”
The fear of losing funding has left Nevada’s mental health nonprofits in a state of crisis. For many, the continuation of their programs—and in some cases, their very existence—depends on whether federal support remains intact.
Conclusion
The potential cuts to federal and Medicaid funding are not just an economic issue; they are a matter of life and death for many who rely on Nevada’s mental health nonprofits. As these organizations brace for uncertainty, they continue to advocate for the preservation of their funding, knowing that their services are critical to the well-being of vulnerable populations across the state.
