Week of April 20, 2026

The FY 2026 federal appropriations picture is finally clear, and the headlines are mixed for nonprofit leaders. Housing and homelessness programs held firm, Momnibus funding survived, and HUD is actively pushing renewal dollars out the door, but California's projected deficit, the CalAIM waiver cliff, and a $17M round of SF Department of Public Health cuts mean local nonprofits need to plan carefully for the next two fiscal cycles.

On March 31, HUD announced $349,205,436 in FY 2025 Continuum of Care renewal funding covering 622 projects that expired in the first quarter of 2026. Final FY 2026 THUD appropriations raised HUD's total budget to $77.3 billion (a $7.2B increase), with Homeless Assistance Grants at $4.4B (+$336M), CoC at $4.1B, CDBG steady at $3.3B, and HOME at $1.25B. Bay Area CoC leads should expect the 2026 NOFO on or before June 1. Why it matters: Permanent supportive housing and rapid rehousing funding streams are more stable than they looked six months ago, now is the time to tighten data, performance, and match commitments for the summer competition.

Despite broader cuts, Rep. Lauren Underwood secured more than $100 million in FY 2026 appropriations for Black Maternal Health Momnibus priorities, bringing cumulative Momnibus-aligned federal investment past $200 million since 2023. Funding flows through HRSA, CDC, and HHS to community doula programs, perinatal workforce pipelines, and social determinants-of-health pilots. Why it matters: Community-based birthing justice organizations should map their programs to specific Momnibus components (Healthy Start, Perinatal Workforce Act provisions, MOMMIES Act alignment) before the next NOFO cycle.

Congress's final FY 2026 HHS deal eliminated most of SAMHSA's Programs of Regional and National Significance, but preserved Building Communities of Recovery grants, the Peer Technical Assistance Center, and the Recovery Community Services Program. Behavioral health providers that lost PRNS-linked funding earlier this cycle should check their portfolios for reapplication pathways. Why it matters: Programs that touch crisis stabilization, youth mental health, or recovery support likely still have a federal runway, but the application window is narrower and more competitive.

California's CalAIM 1115 demonstration expires at the end of 2026, and CMS signaled earlier this year it will no longer approve the funding mechanism underwriting Community Supports like housing navigation, medically tailored meals, and rent assistance. Current funding continues through 2026 and all CalAIM programs remain operational, but DHCS is now preparing a renewal submission under tighter federal parameters. Why it matters: Nonprofits delivering Enhanced Care Management and Community Supports should document outcomes aggressively now and start scenario planning for a scaled-back benefit set in 2027.

Governor Newsom's 2026-27 budget proposal projects a modest $2.9B deficit, but the state's structural gap is closer to $18B once federal losses are absorbed. The traditional $1B homelessness line item is cut in half to $500M, social services and college scholarship spending see reductions, and the May revise is expected to tighten further before the June 15 constitutional deadline. Why it matters: California nonprofits relying on HHAP, CalWORKs contracts, or CDSS pass-throughs should stress-test their FY26-27 budgets at 70-80% of current state revenue and begin diversification conversations with boards now.

With doula services a full Medi-Cal benefit since January 2023, the Central California Alliance for Health is actively funding recruitment (up to $65,000 per new credentialed doula, plus a $10,000 bilingual incentive) across Mariposa, Merced, Monterey, San Benito, and Santa Cruz counties, along with Technical Assistance funding to help community-based organizations bring doulas into the network. Why it matters: Black maternal health organizations and perinatal CBOs should be pursuing Medi-Cal managed care plan contracts now, the infrastructure is funded, but uptake remains uneven.

The San Francisco Department of Public Health is moving forward with approximately $17 million in contract reductions for FY 2026-27, even as total CBO spending grows modestly (from $903M to $942M, a 4% increase). The largest single block, $6 million, hits training programs including harm reduction, gender-affirming care, sexual health and HIV, and language access. The SF AIDS Foundation is losing over $700,000 across two programs including its Clinical Assistants Program, and Lyon-Martin's QTAPI Queer Fellowship is being fully eliminated. Why it matters: SF-based CBOs should confirm their FY 2026-27 contract amounts in writing now and prepare board-level contingency plans for mid-cycle reductions.

HUD's late-2025 CoC NOFO introduced scoring criteria that, if applied as written, would have created a $125.3 million funding gap and eliminated up to 7,104 permanent housing beds across the nine-county Bay Area. Litigation has pushed HUD into negotiations on renewal timing and scoring, and the 2026 NOFO is expected by June 1. Why it matters: Every Bay Area CoC project should be building a "clean" renewal application, current HMIS data, utilization rates, chronicity documentation, because the final scoring methodology remains a moving target.

Valix Collective helps nonprofit leaders translate policy shifts into clear funding strategy, budget scenarios, and board-ready plans. Book a strategy call at valixco.com/contact.

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