Across the country, small and grassroots organizations working on social and racial justice face growing challenges: a difficult funding environment, shifting political priorities, reduced federal investment in community-based programs, and a philanthropic sector unsure about how to reduce transactional grantmaking practices in favor of transformational investments.

Drawing from data compiled by LZF staff from studies of the state-of-the-nonprofit sector, there is plenty of reason for concern. Recent field research indicates that only 43% of U.S. nonprofits ended fiscal year 2025 with a surplus, while 69% experienced funding reductions and over 30% reduced staff size. 39% of nonprofits reported a deficit in FY25, up from 22% in FY22. At the same time, over 90% of nonprofit leaders report concerns about staff burnout, highlighting the strain on organizational capacity.

Against this backdrop, LZF grantee partner organizations demonstrate unusual resilience. Compared to sector benchmarks, LZF-supported organizations are significantly more likely to maintain financial stability, with 63% reporting a surplus and only 8% reporting deficits. Despite operating in high-need, community-based contexts, 87% of grantee partners expanded programming in response to increased demand, while only 2% reported reductions in services. These findings suggest that LZF’s approach through investing and supporting grassroots organizations enables both financial health and programmatic growth, even in a more limited funding environment.

Within Greater Boston, LZF occupies a distinctive niche. While larger foundations typically require established infrastructure, multi-year track records, and extensive reporting before awarding grants, LZF intentionally funds organizations at their earliest stages when access to flexible, unrestricted funding is most transformative. The Fund’s model of multi-year grantmaking, light-touch reporting, and sustained relational engagement stands in contrast to most funders.

This context is important to consider in relation to this study and the relevance of the questions it seeks to answer. As the current political and funding climate places increased strain on the organizations LZF serves, The Fund’s role as a trusted early funder, capacity builder, and community connector becomes increasingly critical. The findings of this study offer both a retrospective account of LZF’s impact and also a basis for thinking about how to sustain and increase that impact in the years going forward.