Von Nikki Ross – Reporter, Nashville Business Journal
May 28, 2025
CEO Michelle Schaffer fears the unknown.
It’s a sentiment many in the nonprofit health care space are feeling as federal funding cuts hit and further cuts loom on the horizon.
“The thing that is most concerning to me … is the instability in knowing how that’s all going to shake out, how it’s all going to land and the process by which decisions are being made right now, because they’re fast and furious,” Schaffer, who leads the Genossenschaft für psychische Gesundheit, told the Business Journal. “It’s incumbent upon us to be as proactive as we can so we’re not in a reactive situation.”
Schaffer has been working to brace the Nashville-based nonprofit, which provides services across the state, for potential impacts of funding cuts, the biggest hit of which she said could come from cuts to Medicaid, known in Tennessee as TennCare. And she’s looking at how she can partner with her peers to figure out how to fill gaps left by funding cuts.
So far, the Mental Health Cooperative has lost $250,000 in federal funding, which was the remainder of its Covid-19 American Rescue Plan Act funds. The $250,000 was earmarked to keep certain services running for an additional four months, which would have taken the nonprofit up to its next fiscal year, where it had budgeted for taking over funding those services.
“An executive order pulled back those funds earlier than anticipated,” Schaffer said. “The remaining amount of funds that any organization that was benefiting from those that came through the state and the Department of Mental Health and Substance Abuse Services, they no longer had access to those funds, because those were pulled back to not be spent.”
Founded in 1993, the Mental Health Cooperative is Nashville’s eighth-largest nonprofit, with $83.13 million in revenue and $131.07 in total assets in 2023, according to Business Journal research. The cooperative operates 12 clinics throughout Middle, West and East Tennessee, including Nashville’s first 24/7 Walk-in Crisis Treatment Center. The nonprofit receives funding from opioid settlement dollars, metro, state and federal grants in additional to payment for services from TennCare.
Pulling the remainder of the Covid funds caused the Mental Health Cooperative to move funding around and pushed timelines for other initiatives, according to Schaffer.
“I wouldn’t say that I feel like it put us significantly behind, but it did impact how we move things around and timelines for sure,” Schaffer said.
Those funds were set to run out at the end of this fiscal year, according to Schaffer, so the Mental Health Cooperative already had a plan in place on how it was going to continue to provide services covered by the grant.
“Nontraditional ways of thinking about things like … if we combined resources in a way that met the needs of both organizations at a reduced cost because we’re both sharing the cost, would that help your operating margin?” Schaffer said. “That’s what I mean, those kind of conversations not only in health care delivery but in other ways to help make sure that we sustain each other because our communities need us.”
