From The National Council of Nonprofits: http://www.councilofnonprofits.org/public-policy/federal/debt-limit

The federal budget for fiscal year 2012, and related spending decisions and tax policy, are all in limbo awaiting decisions by the President and Congress on how or whether to raise the federal borrowing limit. Treasury Secretary Timothy Geithner has stated repeatedly that the nation will default on some of its financial obligations beginning Aug. 2 unless Congress acts to raise the $14.3 trillion debt limit before then. There is general agreement that the debt should be raised by $2.4 trillion to get past the next election and to reduce the deficit by the same amount.

Why It Matters to Nonprofits

Spending cuts, entitlement reforms, tax reforms, and a credit crisis all have the potential for adversely affecting the operations of some or all nonprofit organizations and the people they serve. Nonprofit human service providers and others that provide essential services may be required to curtail operations or seek alternative funding in the event of program cuts. Individuals who may be no longer eligible for entitlement programs (Medicaid, Medicare, Social Security) will likely turn to nonprofits for assistance. Changes to tax policy could result in reduced incentives for giving to the work of nonprofits, and tighter credit would likely increase borrowing costs that take resources out of a nonprofit’s mission.

Full article: http://www.councilofnonprofits.org/public-policy/federal/debt-limit