Many grant-seeking nonprofit CEOs, including some of our clients, are concerned about changing funding priorities likely under the impeding Trump 2.0 administration, as S+A recently posted: The 2024 Election: A Grant Writer’s Post Mortem . While federal funding priorities will surely shift, we expect this to occur gradually and to be more nuanced than eliminating many specific grant programs full stop.
Some indications for emerging grant funding priorities include school choice (vouchers and/or charters), improving student educational outcomes and behavioral health post-COVID lockdowns, workforce development and vocational training, fossil fuels and nuclear power, small businesses and entrepreneurship, veterans services, etc. Since wholesale organizational changes at some agencies like NIH, NSF, and HUD are expected, grant program changes at such agencies will be more profound. Like the HUD reorganization that led to the CDBG and Section 8 programs in 1974, some programs may be converted from individual federal competitive grants to block grant allocations to states. Not to worry, as this will mean that states will issue competitive RFPs and some states may combine state funds with the federal block grants to create larger funding pools.
Further, the Biden Administration focus on environmental justice – codified in Justice40 Initiative – a mandate that underserved communities are the beneficiaries of 40 percent of clean energy grant funds – will surely be eliminated from the Trump Administration energy and environmental grant agenda. DEIA requirements in RFPs will also probably quickly disappear (much to our delight, as these are boring and pro forma to write, while being mostly pointless virtue signaling).
Concern over un-obligated funds from large Biden era administration grant programs is also high. Friday, the outgoing administration announced it had completed an agreement to award Taiwan Semiconductor Manufacturing Company $6.6 billion in grants under the 2022 CHIPS and Science Act, a bipartisan effort to increase U.S. semiconductor manufacturing. The Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), passed in 2021 and 2022, respectively, provide funding for both new and existing (prior to Biden) grant programs over several years. The IIJA dedicates about $1.2 trillion in total funding from FY 2022 to FY 2026, including $550 billion in new spending above current baseline levels to modernize and enhance the nation’s infrastructure. Among the 190 programs detailed in the Bipartisan Infrastructure Law Guidebook, 118 (62%) were pre-existing programs that received additional funding and, in some cases, legislative updates, while 71 were newly established through the act. With the IIJA’s funding authorization set to expire in September 2026, many new programs will survive as well as the additional funding for some legacy programs. It is anticipated that reauthorization discussions will begin in 2025 under the new administration.
The IRA provides $369 billion in federal funding for clean energy delivered through a combination of grants, loans, rebates, incentives and other investments. Most IRA funds were appropriated in FY 2022 and are to remain available through FY 2030. Of the 109 programs outlined in the Inflation Reduction Act Guidebook, nearly half existed prior to the act’s passage. While some funds under IIJA and IRA have advanced appropriations (meaning they are already allocated in budgets through future years), any un-obligated discretionary funds could be redirected within the allowable limits of the authorizing legislation. This could result in fewer new grants being issued in areas the new administration deprioritizes. Also, unencumbered grant funds under these programs will be a fat target for Elon Musk’s and Vivek Ramaswamy’s “Department of Government Efficiency” (DOGE).
Federal grants for current grantees are legally binding once a contract is executed: federal agencies are obligated to fulfill the terms unless non-compliance issues arise. Claw Backs are rare and typically only occur if a grantee is found to be non-compliant with the grant’s terms. Still, as Bette Davis explained in the wonderful 1950 comedy All About Eve, “Fasten your seat belts, it’s going to be a bumpy night.”