Information from community perspectives for the May Beige Book showed that rising fuel and petroleum-based product costs continued to place greater financial pressure on low‑ to moderate-income households. Slow wage growth added to this strain, and one contact noted that more workers are now requesting higher pay to meet basic needs. While demand for services has increased, many assistance organizations are struggling with funding shortages and “donor fatigue,” limiting the support they can provide. Organizations also reported challenges such as higher operating costs and difficulty filling open positions.
The following are verbatim excerpts from seven of the Federal Reserve Districts included in the May Beige Book, which was prepared at the Federal Reserve Bank of Kansas City and is based on information collected on or before May 27, 2026.
Please note that the Beige Book summarizes comments received from contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
“Contacts across nonprofits report significant workforce challenges marked by tight labor availability, rising costs, and pressure to operate with leaner staff. Difficulty hiring and retaining employees persists, with turnover, wage constraints, and burnout particularly acute in caregiving, social assistance, and emergency services. Several contacts emphasized that salaries have not kept pace with rising living costs, forcing some nonprofit workers to rely on the very services their organizations provide and making it difficult for others to remain in their communities. Non-profit organizations noted that technology and AI were reshaping staffing decisions, sometimes reducing hiring needs while introducing new skill requirements.”
– New York Fed, Federal Reserve 2nd District, Community Perspectives
“County government and nonprofit contacts shared the impacts of rapidly rising costs on the people they serve and their organizations. One county government contact said that employees were more frequently requesting pay raises to offset the rising cost of living, and in recent union negotiations, some unions requested more than double their typical wage increase. This county’s operations and maintenance costs climbed, causing them to consider workforce reductions to balance the budget and minimize any tax increases. A housing contact shared that property tax and insurance increases have prevented low-income renters from transitioning to homeownership, and another reported a noticeable increase in homelessness among seniors.”
– Cleveland Fed, Federal Reserve 4th District, Community Conditions
“Contacts at social service, economic development, and workforce organizations noted that rising food prices and elevated utility costs—due in part to a colder than usual winter in several parts of the District—continued to put pressure on low- and moderate-income households. In the early weeks following the outbreak of conflict in the Middle East, some contacts reported concerns that higher gasoline prices could further strain household budgets should the situation persist. Several contacts highlighted growing financial stress among middle-income households, particularly those who do not qualify for public assistance or are unfamiliar with available support resources. Nonetheless, social service providers experienced an uptick in demand for assistance. Nonprofit organizations also reported increased challenges in fundraising, citing “donor fatigue,” which some contacts indicated may threaten the sustainability of current service levels.”
– Atlanta Fed, Federal Reserve 6th District, Community Perspectives
“Community, nonprofit, government and other nonbusiness contacts reported little change in economic activity over the reporting period, though they expressed rising concerns about higher prices related to the conflict in the Middle East. State and municipal contacts worried about a downturn in revenues if consumers curtailed discretionary spending to accommodate higher prices for gas and other necessities. Small business intermediaries reported greater uncertainty on the part of their clients, who were increasingly reluctant to take on debt to start or grow their businesses. Social service organizations said that local funders were adapting to changes and delays in federal funding by encouraging grantees to collaborate more efficiently with one another to meet community needs, even as contacts also noted an increase in the ‘newly needy.’”
– Chicago Fed, Federal Reserve 7th District, Community Conditions
“Organizations serving low- and moderate-income (LMI) populations reported increased budgetary strain, affecting their ability to meet the growing needs in LMI communities. Contacts reported reduced funding from federal and state governments, as well as from individual and corporate donations. Funding shortages have increased competition for philanthropic funds, and foundations reported that they could not fill the funding gap. To cope with funding shortages, contacts reported that more organizations were cutting programs and staff. Organizations also reported increased discussion of mergers, acquisitions, financial agent agreements, and stronger cooperation among non-profits. Services have also emerged to help organizations pursue those pathways.”
– Kansas City Fed, Federal Reserve 10th District, Community Conditions
“Organizations serving lower-income individuals reported persistent high need for assistance. Higher gasoline prices have increased financial strain on low-income households in particular, which is expected to drive further demand for basic-needs assistance, including food. One contact noted that the need for items like diapers was so great that they could no longer fund the program and discontinued it. Community leaders highlighted that immigration enforcement continues to be a concern for the people they serve and has led to some people being afraid of going out in public to seek assistance. Accessing affordable housing also continues to be a critical issue, though some contacts noted affordable housing developments opening or starting to be built, offering hope for future improvement. Higher fuel costs are a key risk among nonprofits, as it increases the cost of delivering assistance and can soften philanthropic giving as donors prioritize meeting needs of their own families in a higher-cost environment.”
– Dallas Fed, Federal Reserve 11th District, Community Perspectives
“Conditions for the community support and services sector weakened somewhat. Contacts reported an increase in demand for basic needs such as food assistance and housing support. A Pacific Northwest contact noted that planned construction of low-income housing declined amid uncertainty about future availability of housing vouchers. Government funding changes led more individuals to drop insurance coverage, which strained hospital resources. For nonprofit organizations, obtaining financial support from businesses became more difficult, and funding from public grants fell.”
– San Francisco Fed, Federal Reserve 12th District, Community Conditions
Visit the May Beige Book report for a full national summary and more information about economic conditions from each Reserve Bank, including labor markets, financial services, real estate, and more.
