Two Foundations Offer Critical Lifelines for Defunded Arts Groups

In February, as the Trump administration was slashing federal funding across all corners of the U.S. government, the National Endowment for the Arts (NEA) announced the cancellation, for fiscal year 2026, of Challenge America, a grant supporting projects that serve underserved groups and communities. 

Red flags instantly went up at the Andy Warhol Foundation for the Visual Arts. 

“As soon as we saw that Challenge America had been cancelled for 2026 and that no new applications would be accepted, we began internal conversations about the likelihood that the grants approved for 2025 would also disappear,” said Warhol Foundation President Joel Wachs. Throughout February and March, foundation leaders contacted “a small circle of colleagues” — especially those that they had worked with through the L.A. Arts Community Fire Relief Fund — to discuss ways to support organizations whose 2025 Challenge America grants could be at risk.

Unfortunately, Warhol Foundation leaders’ hunch proved to be correct. Thanks to NEA staff reductions, administrative delays and new compliance reviews related to executive orders, the distribution of 2025 Challenge America grants to 272 organizations operating in fields like the visual arts, theater, music and dance was postponed for several months. Then the grant offers were officially withdrawn in emailed letters sent on May 2.

Five days later, the Warhol Foundation and the Helen Frankenthaler Foundation announced a joint commitment of $800,000 to provide immediate support to 80 small and mid-sized cultural organizations that lost Challenge America funding. The commitment, which came five days after the NEA canceled another tranche of arts grants and Trump proposed eliminating the agency altogether, will make up for the loss of 30% of the roughly $2.7 million the NEA was supposed to disburse to Challenge America grantees in fiscal year 2025. 

“Both the Warhol and Frankenthaler boards understand the necessity, in this financially precarious and culturally volatile moment, to step up in support of their artist constituencies,” said Frankenthaler Foundation Executive Director Elizabeth Smith in an email to IP. “The funding that foundations provide can help to stabilize, at least to some degree, the platforms which artists participate in, comment upon, push back against and help to shape the world. Both foundations also share the belief that this is but a first step in what will be a larger collaborative, field-wide effort.”

Time will tell if a broader response materializes. In the meantime, here are three takeaways from the Warhol and Frankenthaler foundations’ joint commitment supporting 80 Challenge America grantees.

The commitment has a distinctly preemptive quality

Wachs said he and his team at the Warhol Foundation reached out to their philanthropic colleagues “with a sense of urgency to get an initiative off the ground as soon as possible.” 

Many of these individuals expressed an initial interest in supporting Challenge America grantees. However, “in the end, the Frankenthaler Foundation was the only one that was able to come forward as a fully committed partner,” Wachs said.

With the foundation on board, stakeholders planned for one of two possible outcomes. First, they considered the likelihood that the suspended Challenge America funding would never materialize — a deeply problematic scenario since affected arts leaders, having learned in January that they had been awarded funding, had already hired staff and contractors, booked exhibition space and recruited art students. Under this scenario, the foundations’ funding would shepherd those projects to fruition.

In the second scenario, the foundations acknowledged the possibility that the NEA would eventually disburse 2025 funding to Challenge America organizations that successfully appealed the previous suspension of support and convinced the agency that their projects met the administration’s new priorities. 

Warhol and Frankenthaler leaders decided grantees couldn’t afford to take that chance and opted to fund 80 arts organizations at $10,000 each anyway. And what if the NEA ultimately unlocked suspended Challenge America funding to grantees? “If this were to happen,” said Warhol Foundation Program Director Rachel Bers, “it would simply mean that projects would be funded at $20,000 instead of $10,000 — no problem, in fact, even better!” 

It’s also worth noting that while other funders decided against joining forces with the Warhol and Frankenthaler foundations, it doesn’t necessarily follow that arts grantmakers across the ecosystem are sitting on the sidelines.

In a separate example, on May 6, the Bonfils-Stanton Foundation began accepting applications for its Arts & Culture Rapid Response Grant supporting Denver-area organizations experiencing a loss of revenue due to federal policy changes. In an email to IP, President and CEO Gary Steuer said NEA withdrawals affected 22 groups in Colorado, including five in the Denver metro area. “Based on what we continue to learn from our community, we may need to take additional special actions in the future,” he said.

Filling the gaps doesn’t need to be a resource-intensive undertaking

The Warhol and Frankenthaler foundations held board meetings in early April at which their respective boards endorsed the project. Outreach to grantees began shortly thereafter. (A complete list of grantees and related programs can be found here.)

The joint commitment was announced around the same time as the Mellon Foundation’s $15 million lifeline to the Federation of State Humanities Councils to address the impact of federal funding cuts, and it’s a reminder that filling the gaps in rescinded federal funding doesn’t need to be a solitary, time-consuming, or adversely risky endeavor. 

The Warhol Foundation had already worked with other funders to quickly move emergency support out the door during the L.A. wildfires, and countless other foundations took a similar approach during the pandemic and after the murder of George Floyd. Assuming foundation leaders still have that muscle memory (and partnering funders’ contact information), they shouldn’t have to meticulously build out Trump 2.0 emergency response funds from scratch.

Moreover, Warhol or Frankenthaler stakeholders accustomed to managing discretionary grantmaking programs didn’t have to conduct time-consuming due diligence. 

“The projects had been thoroughly vetted [by the NEA], the grant size was uniform, and the total pool of 272 organizations created what seemed like a ‘manageable’ program, both in terms of logistics and in terms of funding,” Wachs said. “As it turned out, our mandate to support only visual arts organizations limited the eligible pool to only 80 of those 272, but it is — and has always been — our hope that other foundations could join the effort and contribute the remaining monies.”

Lastly, said Smith at the Frankenthaler Foundation, for both foundations, “the monies allocated for this initiative are in addition to what each had already committed to disburse for the year.” The fact that both foundations exceeded their projected 2025 outlays is a reminder that grantmakers — and especially those that don’t replenish their coffers with incoming contributions — operate under a financial model that allows trustees to award unanticipated emergency funding without imperiling the institution’s perpetuity.

Close to 200 organizations may still see 2025 Challenge America funding evaporate

Warhol and Frankenthaler Foundation leaders realized they could fill the gaps in rescinded federal funding by pooling resources and supporting Challenge America recipients vetted by the NEA. But they also had to ensure that shellshocked organizational leaders still had the wherewithal and operational capacity to roll out their projects.

“Some organizations received notification that their grants were being held up while unspecified reviews were being conducted, while some received no contact at all from the [NEA],” said Bers at the Warhol Foundation. “Across the board, directors and staff at these arts organizations have described operating with an unprecedented level of uncertainty and anxiety during the period following the initial announcement of their awards from the NEA in January.” 

This anxiety has been compounded by the fact that many Challenge America recipients are seeing other sources of federal support unexpectedly evaporate.

The Acton, Massachusetts-based Discovery Museum had its Challenge America grant suspended around the same time that two Institute of Museum and Library Services grants were terminated mid-stream. “The financial impact is something we can work through, but it’s been so disappointing to be told in those communications that our work ‘no longer serves the interests of the United States,’” said Discovery Museum CEO Marie Beam. “In the midst of a confusing time, the Warhol and Frankenthaler Foundations’ support is a bright spot that we at Discovery Museum will remember and appreciate for a long time.”

The Discovery Museum’s intention to work through its financial challenges comports with what Warhol and Frankenthaler leaders heard across the larger cohort. Rather than abandon or scale back projects in the face of financial uncertainty, organizational leaders were “determined to follow through with their projects as initially planned and were reaching out to other potential funders or shifting funds internally to cover immediate costs, hoping to recoup them in as-yet unknown ways,” Bers said. 

I was encouraged to learn that organizations have been contacting funders to fill the gaps. I also hope that funders who passed on formally joining the Warhol/Frankenthaler project haven’t abandoned the idea of supporting non-visual arts organizations bracing for the elimination of 2025 Challenge America funding. 

Even with the foundations’ $800,000 commitment, $1.9 million of the NEA’s suspended $2.7 million in Challenge America funding remains uncovered — at least in terms of funders’ public response.  

I can’t speak to the risk appetites of all arts funders, but I also know much money is sloshing around in foundations’ endowments and donor-advised funds housed at community foundations serving regions that are home to affected Challenge America grantees. Scrounging up less than $2 million to support the remaining organizations doesn’t come across as an existentially extreme proposition.

“Our shared work is only starting,” said the Warhol Foundation’s Wachs. “As we affirm the importance of these visual arts organizations, we want to reiterate the invitation to other foundations to join in the effort. The 192 organizations that received grants through the Challenge America for projects in theater, dance and music need your support.”

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