A Fresh Danger to Nonprofits’ Federal Funding that Needs Your Action NOW

You're listening to the Nonprofit Power Podcast. In today's episode, we're sounding the alarm about a fresh danger to federal funding for nonprofits. So stay tuned. If you want to have real and powerful influence over the money and policy decisions that impact your organization and the people you serve, then you're in the right place. I'm Kath Patrick, and I've helped dozens of progressive nonprofit leaders take their organizations to new and higher levels of impact and success by building powerful influence with the decision makers that matter. It is possible to get a critical mass of the money and policy decision makers in your world to be as invested in your success as you are, to have them seeking you out as an equal partner, and to have them bringing opportunities and resources to you. This podcast will help you do just that. Welcome to the Nonprofit Power Podcast. Hey there, folks. Welcome to the Nonprofit Power Podcast. I'm your host, Kath Patrick. I'm so glad you're here for today's episode because we've got ourselves a five alarm fire here, and not a lot of time to do something about it. I had another episode planned for this week, and I put it on the shelf because I think this is way more important, and it's got a deadline attached to it. If you currently have or are thinking of applying for any sort of federal grant funding for the work that you do, this is of utmost importance to you. The current administration's Office of Management and Budget, has proposed a new set of rules around how federal grants will be handled that have the potential to have tremendously negative impact on nonprofits, and on your ability to access federal grant funds to do the very important work that you do. So let's get right into it. First of all, as I mentioned, there's a deadline attached. There is an opportunity to comment on these horrible proposed rules, and right now they're only proposed, but the deadline for comments is July 13th. So, like, the minute you get done listening to this, fire up the laptop and get your comments going. I'm gonna walk through the basics of what's going on and why it matters and what it would do. I'm also gonna hook you up to some links in the show notes that are gonna help you access more information if you want more background. I'm not gonna go super deep on that in this episode, 'cause I'd rather you spent your time writing the comments than listening to me go on and on about this. But if this is not already on your radar, I wanna put it there and put it at the top of your to-do list for the coming week. Here's what's going on. There are already, as you know if you have any sort of federal grant funding, you know that first of all, federal grants are not easy to get, and there's a lot of rules and requirements and all sorts of things attached to them. And if that's your world, you're already super familiar with that. What's in these proposed changes is what the administration could do to mess with your grant, is the short version. What they're proposing to be able to do is basically to award grants based on their partisan political priorities, and their ideological priorities, irrespective of whatever Congress might have said the grant money's supposed to be for. Remember back a year ago. I know it feels kind of like a century ago, but a year ago when all the DOGE lunatics were running around slashing and burning and messing with grants and suspending federal funding on a whim and doing all sorts of crazy stuff, much of which was challenged in court, and they lost, and most of that funding was ultimately restored. But in the process, it yanked people around like crazy and put a lot of nonprofits in a terrible jam. So you remember all that happening. What they basically want to do is now make all that administration by political whim, they want to make that permanent I'm gonna take a couple minutes to outline some of the more egregious things they're proposing. And just say a little bit about what the impact could be for nonprofits with federal grant funding, whether you have it now or whether you might be applying for it in the future. First of all, I'm gonna reiterate multiple times, 'cause this is really important. We talk about this all the time, how part of how the right wing and this administration gets away with stuff is they create the impression of inevitability. They create the sense of there's nothing we can do, they're out of control again, they're doing these terrible things, it's awful, this sucks, we hate them, and we're just screwed. That last piece is not true. There is something we can do. They are required to solicit public comments on this. Over 15,000 comments have already been submitted, and if yours isn't one of them yet, it needs to be. If you have any stake in this at all or if you have any allies in your community who have a stake, get together with them because this is hugely important that OMB get direct pushback on this. But also, that you reach out to your members of Congress and you alert them to how these changes would potentially impact the work that you're able to do in the community. Because that's really what members of Congress are most concerned about, is what's happening at home. How's this gonna hurt or help my constituents? So it's super important for them to understand that what appears to be some abstract arbitrary rules changes at the administrative level that feels very remote and not connected to anything important, how that could actually dramatically alter your ability to provide vital services in the community, and specifically be able to provide vital services to certain segments of the community. Because part of what the administration wants to do is basically pick and choose who gets to benefit. And say, "Well, we don't like those people, and those people, and those people over there, so let's just not fund anything that would help them. We'll just fund things that help the people we like." That's a big piece of this agenda. All right, so I will get more specific than that, but I'm not gonna go way down the rabbit hole. The thing I want you to remember first, foremost, and always is that this is not a done deal. And that public pushback matters. These folks have a reputation for caving when the heat gets too hot. Witness all the mega prison detention centers that they had this grand idea they were gonna put in communities all over the country. Until folks in the communities rose up and said, "Oh, no, no, not in our neighborhood. You're not gonna do that here." And one by one, those projects have been canceled. They've walked it all back. There's a handful still left that are under protest, but most of them, they just went away. They just disappeared because the administration figured out that was so deeply unpopular, including in deep red states, that this just was not gonna fly, and it wasn't a good plan politically. The same thing is true here. The illusion that only radical left nonprofits in deep blue states are asking for federal grants is like, well, that's silly. Of course not. The problems of the country are the problems of the country, and they're happening in every community, irrespective of the politics of the state. So this would harm nonprofits in red states just as much as it would harm nonprofits in blue states. Now, there would most certainly be extra disadvantages for nonprofits in blue states because they would be more likely to be targeted. Because bottom line, the whole point of all of these big pile of proposed rule changes, is to make it easier for the administration to hand out money to its political friends and to deny funding to anybody that it deems not sufficiently aligned with its ideological priorities. So if you do anything that helps immigrant communities, if you do anything that helps low-income people, if you do anything that in any way is about promoting diversity and equity and inclusion. Any of that, they want free license to target that specifically for ideological reasons alone. Okay, so that gives you the flavor of what they're up to. Let me tell you a little bit about what specifically they're looking to do, and this is just the highlights. If you want, you can go deep dive, and I will give you the links to how you can read the entire proposed set of rules if you want to. I don't think it's necessary personally. I think that this is a really good time to rely on national groups like the National Council of Nonprofits who've put together a really good set of comment templates, and I'll link those up as well. They're leading the charge on nonprofit pushback for this. I'm just taking the opportunity here to amplify what they are already doing, and to make sure that everybody who is in my world and who's listening to the podcast either regularly or on occasion, that you're getting that information as well, in case you didn't get it somewhere else. And I want to underscore the urgency, because it's like, we got a week. So the way this would play out is that these proposed changes would affect every aspect of the grant-making process. For example, it would start with the funding notice process, the RFPs and all of those different federal animals that are like RFPs only get called different things, RFIs and so on. You'd start to see those notices coming out, and they would be structured around the political priorities of the administration. Not necessarily about solving a problem, but about bending to political ideology. And so it wouldn't necessarily be program-oriented at all. It might be very heavily ideologically based. Right now what you have are funding opportunities that come up that are either statutory, authorized by Congress, or that are the agency putting out some sort of a funding opportunity based on what the agency is working on that has specific programmatic results in mind that it's trying to promote. That's how normally federal funding has always worked. They just wanna politicize everything and be able to say, "No, we don't care about that. We don't care about eradicating a particular disease or making sure that, you know, God forbid vaccinations happen in a particular community or whatever it is." They're gonna be all about promoting ideology instead, and frankly rewarding their friends and harassing their perceived enemies. And in this case, perceived enemy is anyone who doesn't agree with their political ideology. So that would mean, for example, that if you work in HIV services or if you have anything to do with climate change or immigration or diversity or equity or inclusion, the chances are very good you might see your application just screened out in the early process as not aligned with priorities. Never mind the merits, just nope, not aligned politically. Just toss that on the trash pile So basically, in order to get a grant, you might find yourself having to align with the administration's policies in order to even have a shot at funding. Obviously, that poses huge ethical and moral problems for the vast majority of nonprofits in the country who are both strictly nonpartisan, and who are, by their nature, service-oriented and focused on helping people. Some other things they're interested in doing are in changing how they define risk. Part of the federal grant review process is to do kind of a risk review. And that's fine. There's reasons to do that that are legitimate. But they wanna be able to broaden the notion of risk so that federal agencies could, say, deny an award based on a particular nonprofit applicant's affiliation with a national organization that they don't like, or that you're part of an advocacy group or coalition that they don't like and that doesn't agree with their ideology. They could say, "Oh, well, you're risky because you're practically a terrorist 'cause, if you do anything over here on the left, you must be Antifa, and that's a terrorist group," but da, da, da, da, da. They don't want this to be a rational process anymore. They want it to be ideologically driven, and a little bit vengeful because that's what 47 is really all about. That's bad enough, but then they wanna carry this concept all the way through. So after you get the grant, let's say you manage to make it through the gauntlet of all that other screening and you get the award. But then you say something or do something they don't like. They wanna reserve the right to just say, "Oh, well, nope. No, no, that's not allowed. You've said something unaligned. We're just gonna withhold your grant. We're just gonna stop it, take it away from you," whatever. They wanna be able to have this all be completely discretionary on their whim, primarily based on political ideology. I do not have to spend one minute explaining to you why that's an absolute disaster, not just for nonprofits, but for the people we serve. It's a terrible disservice to the people of the community who depend on the kinds of things that get funded from government grants to help them thrive. So you get the idea. This is bad news, right? This is a terrible idea. It's not new. 47 has tried to do this with basically everything. And I wanna point out that something that the National Council of Nonprofits has pointed out, which is, remember DOGE, you remember what a mess that was. Most of that jerking around that they did with all sorts of federal grantees, including nonprofits, they had to make people whole eventually. Most of that got knocked out in court. Federal judge after federal judge has said no to that stuff and made them eventually release the funds and fund the stuff. But- the amount of hassle and harassment and financial insecurity and chaos and all of it that that puts people through is frankly, a deterrent. And that may be part of the goal as well. Part of the goal may be just to make it so painful to try to get any sort of a federal grant that people just stop trying. Except for their buddies, who they'll just give the money to and say, "Here you go." that's what they'd like to do. That's not new. That's how they want to run everything. 47 thinks that the entire federal treasury is his to play with and to hand out to his friends and punish his enemies. That's how he rolls. So this is not new. This is just one more piece in the steaming pile of stuff that they keep pushing out and trying to make happen. The answer, as always, is push back like crazy. And there's three ways you can do that. The first is to submit comments directly to OMB through the federal rulemaking portal, and I will link that up in the show notes. And you particularly want to describe how specific provisions would affect your organization and your ability to serve members of the community, and talk about the impact on the community as well. There is terrific guidance from the National Council of Nonprofits on how to structure those comments. They have suggested language that you can build off of. You want to make it your own, obviously, but they've done a lot of the groundwork to create a structure for comments to make this pretty easy. We've got till July 13th. So take advantage of all that work that's already been done and just build your comments from there. Another thing you can do is the National Council of Nonprofits has crafted a national letter to OMB, and you can sign on to that. I encourage you to do all of the above here. There's three things, and if it were me, I'd be doing all three. Then the third thing, and I mentioned this earlier, is to contact your members of Congress directly. And help them understand how running federal grants this way would massively harm your work and would harm members of the community because they would not be able to rely on services in the same way. Whatever is true for your work and the kinds of federal grant funds that you get. Now, if you do not have federal grant funds, never had them, don't imagine you ever will, this may not be something you choose to get involved in. But many of my clients and a lot of nonprofits that I know just out in the world have some sort of federal grant funding. There's a gajillion federal grant programs out there, and, lots and lots of nonprofits have some piece of that. If you have any piece of that or have ever thought about wanting to pursue that, this is directly relevant. So I encourage you, hop right on this, get to those links, and do those three things. Do the easy thing first. Sign on to the National Council's national letter. Do that right away. It'll get your engines running. And then download their template for a comment to OMB. The comments to OMB have to be submitted through a form that is on the OMB website. The National Council has instructions for how you specifically make those comments, and they include that link to that form right there. So you can get all that directly at National Council's website. And then the third thing is to write your member of Congress. Or if they happen to be home, a lot of them are home on extended recess right now, and we won't even get into why that happened, but, uh, they're there. They're home in the community. They're gonna be there for a little bit. So if you happen to bump into them or have a meeting planned, you may wanna add this to the things you raise with them and say, "Hey, this needs to be on the radar. This is really damaging for our work and for the people in this community, and we want you to oppose it." Tackle those three things. Get them done by July 13th. And remember always, pushback works. These folks like to do stuff in the dark with nobody watching, and as soon as there's a spotlight on it, the little cockroaches start running for cover, and very often they abandon their plans. So the more pushback they get, the louder that pushback is, and the more places it's coming from, the better chances we have of sending this back to whatever rock it came out from under, and leave it there. Thanks for listening, and I'll see you in the next episode right here on the Nonprofit Power Podcast.