There’s an explosion of needs right now in Orange County’s most vulnerable communities, where we’re seeing record demand for nonprofit services. In the most recent Conditions of Children report released by the OC Social Services Agency, more than 30,000 students in OC are without a reliable place to live — the highest that statistic has been in over a decade. And during the federal shutdown in November, the team at 211OC handled more than 7,000 calls, chats, and texts from families and individuals in Orange County seeking food assistance – a significant increase over the previous year.
Meanwhile, our nonprofit sector is quietly experiencing a jarring shift. At Orange County Grantmakers (OCG), which represents more than 50 of the largest funders in this part of Southern California, one of the trends we’re seeing is a shifting economic landscape that’s driving many philanthropic decisions.
According to the recently released 2026 Giving USA report—findings that were shared with Orange County nonprofit and philanthropic leaders during the Giving USA: Beyond the Data event at UCI Beall Applied Innovation in Irvine on July 28—overall charitable giving increased 5.7% over the last year. However, the sources of giving are evolving, and the one source that has seen a consistent decline over the past two decades is individual donors. At the same time, we’re seeing a sector-wide shift toward invite-only grants.
In Orange County, where we have approximately 5,000 public charities, this translates to a significant number of nonprofits facing increased competition for a more limited pool of grants and a smaller number of gifts. Furthermore, there’s a dramatic slowing of payments from public contracts, as well as substantially less funding from federal, state, and county contract opportunities.
As philanthropic dollars become harder and harder to secure, it’s time to find new ways to sustain growth. This means building a more diversified nonprofit budget that incorporates more unique revenue streams.
Fortunately, Orange County is well-primed to be at the forefront of one of the most promising and underutilized innovations in the sector: loan funds designed specifically for nonprofits. Charitable Ventures, a community partner of OCG that is dedicated to strengthening and sustaining nonprofits as the pivotal community businesses that they are, just launched a new loan fund in June 2026 to provide working capital for smaller organizations — making it possible for emerging nonprofits to manage cash flow gaps as they advance their missions.
Unlocking working capital for nonprofits
In this current funding environment that’s smaller and less predictable, our thousands of local nonprofits are vying for the same handful of philanthropic relationships and competing for grant dollars that simply may not materialize. It’s a threat to their long-term financial stability.
Charitable Ventures’ program, called the Catalyst Fund, has made it possible for emerging nonprofits to leverage the power of loan funds. It addresses a structural gap that’s specific to how nonprofits are financed. Many small nonprofits are paid on a reimbursement basis — they deliver services first, then wait weeks or months for a government agency or funder to pay them back. Traditional banks are usually unwilling to lend to organizations with this profile, because nonprofits often lack the collateral, credit history, or predictable revenue that conventional underwriting expects. That leaves small nonprofits with few options besides delaying vendor payments, delaying payroll, or turning away work — none of which are good for the organization or the community it serves.
Unlike traditional bank loans, the Catalyst Fund provides mission-aligned financing solutions that prioritize community impact over profit. Flexible loans ranging from $10,000 to $100,000 for nonprofits under $1.5 million in annual revenues provide a low interest line of credit that can help manage day-to-day operating expenses, scale programs, support unexpected growth, or even be used for construction. This is especially essential for those that need an infusion of cash to bridge the timing gap between grants, contracts, or annual campaigns.
Loans are also paired with financial coaching and technical assistance to support repayment and strengthen long-term financial stability. Another added bonus: the Catalyst Fund will help organizations build credit history, an asset local nonprofits rarely have. In doing so, nonprofits will have more options for future loans, which can come from a traditional bank or CDFI.
Investing in community impact during a time of need
Any small OC nonprofit whose revenue comes from reimbursement-based contracts is a natural fit for the Catalyst Fund, meaning the nonprofit spends the money first and gets paid back weeks or months later. In Orange County, that’s common in sectors like homeless services and housing navigation, which are often Continuum of Care or county-funded and typically reimbursed on a lag.
Our region sees this pattern across myriad sectors that receive funds from grant or government sources such as Medi-Cal, school districts, or county contracts. This includes sectors including food insecurity and food banks, behavioral health and substance use treatment, youth development and after school programs, domestic violence and victim services, workforce development, senior services, and immigrant and refugee services.
With the Catalyst Fund, nonprofits can run like a business regardless of their mission. They can manage operating costs and capital, and capacity needs to drive to success without volatile reimbursement schedules and donation cycles threatening irreparable harm to their financial situations. They can manage this volatility and instead of falling into risk-averse patterns, perhaps invest in future impact and meet the ever-growing needs in our community.
Why it matters to the community
A threat to nonprofits is a threat to our whole regional support system. This is especially true of smaller organizations, which are often the ones closest to the ground in underserved communities. They’re frequently the most nimble and trusted messengers for services like housing, food, and health navigation. However, they’re also the most financially fragile.
When a cash-flow gap forces a nonprofit to freeze hiring, delay a program, or shut down a contract, it’s the community members relying on that service who feel it first. By keeping these organizations solvent and operating through short-term gaps, the Catalyst fund effectively protects continuity of services for Orange County’s most vulnerable residents, while also making the broader nonprofit sector more resilient and more “bankable” over time — since responsible use of these loans and structured financial coaching helps organizations build the track record they’ll eventually need to access more traditional capital.
And Orange County is a fantastic place to launch an initiative like nonprofit loan funds — we’re big enough to take bold action, but also small enough to implement new ideas. As a community very closely engaged with one another, our landscape is also fairly small to the point where we can scale up in the future.
By embracing financial models like nonprofit loan funds, nonprofit leaders can help their organizations weather economic uncertainty and donor downturns. Likewise, funders have an important role to play. Philanthropy needs to be willing to invest in creative new structures to give nonprofits a fighting chance in an unstable funding environment.
Because the nonprofits best positioned to survive this perfect storm of economic turmoil and ever-growing community needs won’t necessarily be the ones with the biggest donor lists. They’ll be the ones whose leaders — executives and funders alike — were ready to begin building a new, comprehensive financial foundation that goes beyond the grant check. And it starts right here in Orange County.
Taryn Palumbo is Executive Director of Orange County Grantmakers (OCG), where she leads initiatives that strengthen collaboration among philanthropy, nonprofits, and government to address Orange County’s most pressing challenges. With a background in public policy, government affairs, and nonprofit leadership, she has spent more than a decade advancing cross-sector partnerships that improve outcomes for communities across Orange County.
Anne Olin is President and CEO of Charitable Ventures, a trusted nonprofit partner and infrastructure organization serving Southern California’s nonprofit and social impact ecosystem. Since founding the organization in 2007, she has led cross-sector initiatives supporting government agencies, foundations, and nonprofits, with a focus on building the capacity and long-term sustainability of community organizations.
