Turmoil in Federal Funding

President Trump signed a series of Executive Orders that caused hectic panic among universities and non profits that receive funding either in the form of grants or contracts in the last week. It is clear from communications from the White House that the new administration is setting out on an agenda to extricate any form of Diversity, Equity, and Inclusion from the federal government or non governmental organizations it funds. It remains to be seen how drastic these action will be for grant recipients, but it appears that key words are under scrutiny in this regard. There are some indications that some segments that receive federal funding either local schools (k12) and higher education through accreditation mechanisms will continue to be scrutinized for any of this type of activity. The stay in grant funding was stayed by a Federal Court Judge last week, but the administration is still continuing on this from a practical standpoint.

A few questions to assess for your own organization:

What funding sources do I have and how are they impacted? 

FEDERAL: It appears that mostly federal funding is impacted by this increased scrutiny on certain types of programs associated with DEI. It could also be impacted by what is considered government waste through the activities of the newly formed DOGE organization. This means that even if your programs do not include DEI that they could also be impacted by slashes to spending in certain areas of research and programming. As many of you are aware, the federal government provides hundreds of millions of dollars in grants but they also contract with non governmental entities to provide services to federal employees or in service of the federal system related to training, technology, and many other facets of governmental life.

STATES: There are some states that have taken the same approach to rooting out DEI and restricting funding to programs and organizations that include these practices. Florida, Ohio, Texas, and other states have legislation either in the works or already in place to effectuate this policy perspective.

CORPORATE: There may be some large organizations that lean into DEI and some that back away in response to the federal direction. It really might depend on their interaction with the federal government and contracting with the federal government. It would seem likely that those associated with defense department contracts, for example, would consider steering away from funding these types of programs in through their foundations or philanthropy. Financial institutions could consider a step away if they receive direction from financial regulators such as the SEC, if the federal eradication is expanded in this manner.

PRIVATE DONORS: Many individuals will perceive the federal targeting of DEI programs as wrong and may be a way to diversify funding sources if DEI is an key part of your organizations programming.

How do you start diversifying funding sources?

Any nonprofit is always benefited by having multiple funding sources. It is important to start local and secure funding from as many local funders as possible. These could be governmental or could be private foundations. Most counties have some sort of philanthropy organization that helps individuals funnel money to particular causes. If you have not already done so, reach out to these organizations to inquire about and educate them on your programs and your organization. As you build a relationship with them they can possibly find funders based on your particular mission. Often, workforce development professionals engage with larger corporations that are locating to that particular county. This avenue could help you to build a relationship with larger organizations inbound to your local area.

All non profits should have a diversified funding strategy that includes all of the different types of funders. This allows for adapting to problems with one particular funding source. If this has not been a focus of your organization in the past, it may be worth investment of time and resources in this more constrained federal funding environment.

Targeted Non Profits

Those organizations that have programming that helps minority groups, immigrant populations, or other groups may feel like they are being targeted by this federal focus of both DEI and what is perceived as excessive spending. It is important to consider that many individuals and private corporate foundations remain focused on these populations and could be emboldened to obtain more funding from individuals to support these sorts of initiatives. Foundations thinking ahead will likely build campaigns to support organizations with these programs because they fall outside the reach of the federal government reach. Some states will have it easier than others with these sorts of target demographics, but it could actually drive more donations than can be obtained through the federal government.

These non profits with these types of programs should focus on measurable outcomes and collecting good success data to combat the notion that they are not successful programs or that they are not useful. This is a best practice for any non profit seeking external funding, but could be particularly useful going forward.

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TMG, LLC works with non profits to review their funding priorities, develop a funding plan, grow proposal quantity, and develop robust outcome and data assessments in programs. Contact us today! [email protected]