Having spent the past couple of months digging into how the Trump administration has canceled or suspended federal grants, and what philanthropy’s doing about it, I’ve concluded that one reason large institutional foundations haven’t publicly thrown lifelines en masse is because many affected organizations weren’t on their radars to begin with.
Institutional funders aren’t included in a new report on the nonprofit Black literary arts field by Cave Canem, which had its NEA grant terminated on May 2, “because the funding wasn’t enough to register as its own category,” said Cave Canem Executive Director Lisa Willis. Moreover, many of the groups receiving emergency funding from the Andy Warhol and Helen Frankenthaler foundations to cover terminated NEA grants operate in rural locations like Beaumont, Texas, and Wahpeton, North Dakota, that don’t have a culture of robust foundation support.
Large institutional foundations are also busy addressing the needs of existing grantees and, quite possibly, applicants that have yet to receive funding. Asking program officers to parachute into unfamiliar terrain and fund a new set of organizations to the possible detriment of existing grantees may be a bridge too far.
Fortunately, backing organizations in large cities and in far-flung locales aligns with the missions of the country’s community foundations, which provided emergency support during the pandemic and remain well positioned to respond to natural disasters and other crises. By tapping deep relationships with regional funders, donors and grassroots nonprofit leaders, many community foundations are stepping up and doing everything from rolling out emergency grants to asking donor-advised fund account holders to support affected groups.
Here’s a look at how Nebraska’s Lincoln Community Foundation, New Mexico’s Santa Fe Community Foundation and the Central Florida Foundation are helping regional grantees reeling from federal cuts. While these tactics are by no means comprehensive, I hope their inclusion underscores the strategic breadth of how community foundations located far from major population centers are assisting grantees that have had federal funding suspended or terminated.
Santa Fe Community Foundation: Nonprofit ecosystem landscape analysis and a philanthropic call to action
New Mexico ranks first in the nation for federal grant funding on a per capita basis, with more than $5,000 per resident in both active and new federal awards. Additionally, 37% of New Mexico nonprofits receive government grants, tying the state for the sixth-highest rate in the country.
“These funds are critical,” said Santa Fe Community Foundation (SFCF) President and CEO Christopher Goett. “Rural, tribal, and immigrant communities across our state rely on them for everything from community health clinics and youth services to environmental restoration and food security. Local nonprofits often fill the role of delivering essential services where public infrastructure falls short — and without stable federal support, that entire safety net is at risk.”
In response to federal funding cuts, the foundation partnered with the Thornburg Foundation and Anchorum Health Foundation to survey over 200 New Mexico nonprofits and assess the effects of shifts in federal funding. The result, a nonpartisan report titled “Impact of Federal Funding Changes on New Mexico’s Philanthropic Sector,” contains three trenchant topline findings: $1.1 billion in active federal awards are tied to New Mexico nonprofits, but only 54% of those funds have been paid out so far; 20% of surveyed organizations rely on federal grants for at least half of their total revenue; and to replace government support nationally, private philanthropy would need to increase giving by 282%.
“Education, housing, environmental, and youth and family services are among the most federally reliant sectors in New Mexico,” Goett said. “These groups are already seeing the consequences of delayed disbursements — staffing reductions, service interruptions and suspended programming are all becoming more common.”
The report outlines key recommendations for New Mexico funders to help nonprofits navigate the crisis, such as increasing payout rates beyond the minimum 5% where possible, prioritizing discretionary grantmaking within the state, expanding multi-year support, boosting advocacy for the sector and investing in nonprofit capacity. “These recommendations affirm and strengthen our existing, values-driven approach,” Goett said, noting that SFCF pays out between 8 to 12% annually, and collectively, 86% of its grantmaking stays in the state, well above the 64% average of all New Mexico foundations. “This report isn’t just a warning. It’s a blueprint for action.”
Looking ahead, SFCF will be rolling out new multi-year grantmaking to support nonprofits’ resilience and long-term capacity. It will also continue to work with its donors to maximize the impact of their local giving and invest in nonprofit education through its Learning Hub, which offers training on topics like fundraising, communications and HR best practices. Learning Hub participants recently met with local funders and New Mexico’s congressional delegation to “ensure decision-makers hear directly from the organizations on the front lines of community care,” Goett said.
Lincoln Community Foundation: A pooled emergency response grant
The Lincoln Community Foundation (LCF) in Nebraska has taken the most familiar page out of the COVID-era playbook by partnering with other funders to launch an emergency response grant, dubbed the Lincoln-Lancaster County Response Fund, for organizations supporting vulnerable populations that can “demonstrate some disruption in funding from federal grants,” said President and CEO Tracy Edgerton.
The fund’s origins date back to January, when an informal group of regional funders convened to discuss nonprofit leaders’ growing concerns about funding cuts. The United Way, which has strong relationships with regional grantmakers and service agencies, took the lead in getting other funders on board, including LCF.
“We took what we learned during the pandemic and put it into action once again, in terms of how we might support nonprofits that were most at risk,” Edgerton said. “We had a template we could follow.”
As of mid-May, LCF was “aware of organizations locally that have already received notice that either a grant was being delayed or terminated in the last few months,” Edgerton said. Affected organizations are addressing poverty, including through food security work and family support.
The need is extensive, and the funding is finite, so Edgerton and her team, like countless other program managers across the country, had to make some challenging decisions when drawing up the fund’s application criteria. “We tried to hone in not only on nonprofits that can demonstrate that they’ve lost funding, but also nonprofits that focus on human services, so we’re looking at housing and homelessness prevention, food insecurity, healthcare, immigrants and refugees and domestic violence services,” she said. “We’ve had difficult conversations with organizations, such as arts organizations, that may not meet our criteria.”
The Lincoln-Lancaster County Response Fund application went live in early May. LCF stakeholders are still raising money for the fund — donors can contribute here — and plan to conduct an initial review of applications in June.
Funders’ response to Trump 2.0 has drawn parallels to the pandemic, but as readers know, the analogy only goes so far. In 2020, the federal government took the lead in many emergency response efforts. Now, funders are trying to cover rescinded or terminated federal grants. “It’s certainly a bit different now than it was at that time [during the pandemic],” Edgerton said, “because the landscape seems to be changing quickly and without much warning. There’s so much uncertainty.”
What is certain, unfortunately, is that more federal cuts are on the horizon, further complicating the calculus of Edgerton and her grantmaking peers across the country. “There’s a question of, ‘Do we deplete it [the fund] now?’” she said, “because it wouldn’t be difficult to take what we raised and put it back into the community pretty quickly. But what does that do for organizations that are informed about cuts in four months?”
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Central Florida Foundation: Helping organizations build advocacy muscle and diversify revenues
Central Florida Foundation (CFF) President and CEO Mark Brewer told me that 70% of the nonprofits in the region have had federal funding rescinded.
“The Second Harvest Food Bank lost over $10 million in funding for food, including their Temporary Emergency Food Assistance program, which feeds mostly families,” he said. “Another one would be the Primary Care Access Network, which is focused on getting healthcare directly to families, and they’re now down to just about three employees. Those are two organizations that were linked a lot to federal government funding and to some city and county funding, which came from the federal government.”
Brewer’s commentary is a reminder that a substantial portion of rescinded federal funding was supposed to flow to state governments, cities and counties that would, in turn, regrant the money locally. Now all eyes are on public appropriators — particularly those at the state level — to drum up funding to plug the gaps in federal support.
As a result, CFF has been connecting local nonprofits to the Florida Nonprofit Alliance, which advocates for the sector at the federal, state and local levels, and the Edyth Bush Institute for Philanthropy & Nonprofit Leadership. “These organizations are helping nonprofits that may not have policy arms or their own lobbyists stay up to date on policy and legislative changes,” Brewer said. “They keep them connected in the conversation.”
CFF also collects data and policy-related news items from the Florida Philanthropic Network, a statewide association of grantmakers working to strengthen philanthropy through research, education and public policy, and the Council on Foundations, and passes them along to nonprofits.
CFF’s efforts to strengthen nonprofits’ advocacy muscle underscores one of the few pieces of good news in the sector across the past few weeks.
In late May, President Donald Trump’s “big, beautiful bill” passed in the U.S. House of Representatives, but it did not include a provision that would have empowered the executive branch to revoke nonprofit status from organizations without due process. Groups like the National Council of Nonprofits lobbied legislators to strike the provision, and they appear to have succeeded — at least for now. “This is important progress in preventing harm to the entire nonprofit sector in the tax bill, and validation that our collective advocacy is working!” said National Council of Nonprofits President Diane Yentel in a LinkedIn post. Though it should be noted that it can be difficult to trace a direct link between advocacy efforts and legislators’ decisions.
Still, advocates can’t afford to be complacent, since the provision can be reintroduced at any point in the future. Moreover, like the LCF’s Edgerton, the CFF’s Brewer is bracing for additional federal funding cuts, specifically to the Department of Housing and Urban Development and Medicaid.
“We’re focused on the risk that other things will go away because of the way Florida operates in conjunction with the federal government,” Brewer said. “Our state government didn’t think that it was a good idea to expand Medicaid [after the passage of the Affordable Care Act], so now we may be at actual larger risk for losing Medicaid than we would have had we expanded at the time it was offered to us.”
CFF is also helping nonprofits adopt sustainable business models with earned revenue streams through its Rally: Social Enterprise Accelerator. The initiative “is meant to find ways to engage social entrepreneurs in successful, revenue-driven businesses that have measurable social outcomes,” Brewer said. The initiative has two cohorts a year consisting of 10 to 12 social entrepreneurs, and it’s open to organizations all over the world, as long as they have a footprint in Central Florida. About 40% of Rally participants hail from nonprofits. “That number swings back and forth, and right now, we’re seeing an increase in nonprofit applications,” Brewer said.
It’s difficult to radiate optimism when 70% of the nonprofits in your region had federal funding rescinded. That said, before we signed off, Brewer made out a faint silver lining in the ruinous storm clouds engulfing the nonprofit world.
“If you look back at the history of the independent sector, so many great things happened in times like this, because people had to put their heads down, change their business models and rethink how they were doing the work,” he said. “This disruption gives us that choice. It’s not a happy day, but we might look back on this in five or 10 years and say, ‘You know what? Some good stuff actually came out of this.’”
