For mental health, behavioral health, substance use treatment, and recovery nonprofits, federal grants have long been a major part of the funding landscape. SAMHSA, HRSA, HUD, DOJ, and other federal agencies have funded everything from treatment and recovery services to workforce development, prevention, housing, and reentry.
Federal funding still matters. But if the last two years have taught us anything, it is that nonprofits cannot afford to build a funding strategy around federal opportunities alone.
Our recent analysis of the 2026 SAMHSA grant cycle offered a dramatic example. Competitions expected in the spring were delayed into summer, and the application window for many opportunities was cut roughly in half. Organizations that had historically expected about 60 days to respond suddenly found themselves working with 30 days or less.
That kind of instability makes funding diversification more than a nice idea. It makes it a strategic necessity.
Fortunately, behavioral health and recovery organizations have access to funding streams that often receive far less attention than traditional federal grants. Two of the most important are Opioid Settlement funding and health care conversion or COPA-related foundations.
And KFA has spent much of the past year trying to make both easier for nonprofits to find.
COPA and Health Conversion Foundations: A Funding Source Hiding in Plain Sight
In December 2025, KFA published a resource we had been trying to build for more than a year: a national database of COPA-created and hospital conversion foundations.
Health conversion foundations are generally created when charitable health care assets are preserved after a nonprofit hospital or health system is sold, merged, or restructured. Separately, some states use Certificates of Public Advantage, or COPAs, and similar cooperative agreements to regulate health system mergers. Those agreements can include requirements for community investment funds or health endowments intended to preserve public benefit.
Our research identified 320 health conversion foundations and COPA-related community investment funds nationwide. To build the database, we pulled together information from legacy foundation directories, state Attorney General records, COPA agreements, hospital transaction documents, IRS filings, and other sources that had never been assembled into one usable national resource.
Why should behavioral health organizations care?
Because these funders are often deeply connected to community health. Their priorities may include mental health, substance use disorder, access to care, social determinants of health, rural health, health equity, prevention, workforce development, housing stability, and other issues directly connected to the work behavioral health and recovery nonprofits are already doing.
They can also offer something that is particularly valuable in an unstable federal environment: local or regional philanthropy backed by charitable assets rather than annual congressional appropriations.
But there is an important catch.
Finding a foundation's name does not mean you have found a grant your organization should pursue.
Geographic restrictions may be narrow. Priorities differ. Some foundations run open competitive cycles; others rely heavily on relationships or invitation. Funding interests change. And organizations still need to determine whether their programs, populations, service areas, and plans genuinely align with the funder's priorities.
The database opens the door. Good prospect research tells you whether it is worth walking through it.
Opioid Settlement Funding: Enormous Potential, Extraordinary Fragmentation
Opioid Settlement funding presents an even more complicated research challenge.
Billions of dollars from national opioid litigation are being distributed over many years, but there is no single national grant process that nonprofits can simply monitor. States and local governments control funds through widely varying structures, timelines, priorities, and decision-making processes.
Ohio's OneOhio Recovery Foundation, for example, operates regional competitive grant cycles with funding inquiries, regional review, expert review, technical applications, and board approval. Its current regional grant structure supports prevention, treatment, recovery, and related work involving substance use disorders and co-occurring mental health conditions.
Wisconsin offers a completely different example. Under state law, 70 percent of its settlement funds go to participating local governments and 30 percent to the state. State-managed dollars are then distributed across multiple strategies and programs, including residential substance use treatment, prevention, overdose response, treatment in correctional settings, and other initiatives.
Multiply those differences across states, counties, cities, regional authorities, foundations, and other entities administering settlement dollars, and the research challenge becomes obvious.
That is exactly why KFA spent June and July conducting an in-depth national research project of our own.
We have now built a comprehensive internal database designed to help us understand how Opioid Settlement funding is flowing across the country: who controls it, how organizations access it, what types of activities are being funded, and where opportunities may emerge for treatment, recovery, prevention, behavioral health, and related organizations.
The project confirmed something we already suspected.
“Opioid Settlement funding” is not one funding source. It is hundreds of different funding environments.
An organization may encounter a traditional competitive grant in one community, a county procurement in another, a state-administered program somewhere else, or an allocation process with little resemblance to grantmaking at all.
That makes location every bit as important as program design.
A Database Is Not a Funding Strategy
There is an understandable temptation to believe that better databases solve the grant-research problem.
They help. We know that firsthand; we have invested hundreds of hours building them.
But a database gives you possibilities.
A funding strategy requires interpretation.
A behavioral health organization still has to determine which prospects fit its programs, geography, population, organizational readiness, timing, and capacity. It has to verify that the opportunity is current. It has to understand how decisions are made. And it has to decide whether pursuing that funding is a better use of limited staff resources than pursuing something else.
That is especially important now.
When federal funding becomes less predictable, the answer should not be to chase every alternative source of money that appears. That simply replaces one reactive funding strategy with another.
The goal is a diversified pipeline: federal opportunities where they make sense, combined with state and local funding, Opioid Settlement dollars, COPA and health conversion foundations, private philanthropy, corporate giving, and other sources that fit the organization's actual work.
Broaden the Strategy, Not the Mission
Funding diversification works best when the mission remains the anchor.
Behavioral health and recovery nonprofits should not redesign good programs simply because a new pot of money has appeared. They should identify the broader universe of funders interested in solving the problems they are already equipped to address.
That is what makes these newer and less familiar funding streams so important.
They do not replace SAMHSA or other federal funders.
They give organizations more options.
And when one funding stream becomes delayed, disrupted, or unpredictable, having more well-researched options creates something nonprofits desperately need: the ability to make deliberate choices instead of desperate ones.
That is also the thinking behind KFA's Grant Prospectus work. We do not simply build lists of funders. We research, verify, evaluate, and prioritize opportunities so nonprofit leaders can see where the strongest fits are and what they should be preparing to pursue next.
In today's funding environment, that broader view may be one of the most valuable assets a nonprofit can have.