A Grant Writer’s Assessment of One Month of Trump 2.0—“Watch the skies!”

As we experience the fourth week of the second Trump administration, much remains in flux in the federal grant world that S + A occupies. So, it would be best for you to follow the advice of Scotty the reporter’s last line in the great 1951 Sci-Fi classic, The Thing from Another World: “Watch the skies . . .”

While there have been two court actions to stop a federal funding freeze issued by Trump through executive order and OMB memoranda, several agencies and/or their grantees are reporting difficulty in accessing funding:

• There were media stories last week that several FQHCs in Virginia reported that they were locked out of the DHHS-run payment management system. We work for many FQHCs. I assume this payment issue, if true, relates to their Section 330 grants, which I think only amount to about 15% of FQHC operating budgets. The balance is mostly Medicaid reimbursements, the majority of which I’m pretty sure are from the states, with the balance disbursed by the feds.
• Head Start agencies across the nation reported being unable to access needed funds, although again it’s not clear what these funds are.
• Other anecdotal reports indicate that federal grantees were being told by funding agencies that grantees couldn’t draw down funding or process reimbursements while agency reviews of grant programs are ongoing. Interesting but no specifics, so it’s hard to know what this means

So far, none of our clients have told us about these kinds of cash flow issues but it’s likely that some version of this is going on. I don’t generally trust media reporting on nonprofits and grants because it’s mostly inaccurate. The grant reimbursement crisis, however small or large it actually is, should quickly sort itself out as the initial DOGE tsunami subsides and federal agencies adjust their payment systems.

Still, grant-related cash flow problems should not be a major issue for a well-run nonprofit, which should have a prudent reserve and credit line for such cash flow issues, just like S + A and every other successful business does. Grantees like FQHCs and Head Start agencies, however, are staff intensive. While they should be able to make payroll for the short term using reserves / credit lines, not all affected agencies and organizations will be able to do so. Organizations which are dependent on federal transfers or grant funding drawdowns—whether directly or as a pass-through from another entity—should review their grant agreements and make sure the management team and board understand any funding availability and reimbursement clauses.

Grantees should also actively monitor the status of federal funding availability while maintaining compliance and reporting requirements, making sure to meet all deadlines in the interim, no matter how unclear the environment may be. Also, it is always a good idea to stay in contact with grant program officers and inquire about the current status of funding availability and any steps you may need to take to ensure full compliance with executive orders, policy changes, and any other relevant funding agency communication or guidance.

You should watch for new federal guidance related to administration priorities being published, some of which are directly grant-related and some not; but you won’t know unless you read and understand them. Many are being issued as Trump administration domestic policies take shape, but these are drafted quickly and not always in clear terms. For example, HUD Secretary Scott Turner just issued an order directing HUD to halt any pending or future enforcement actions related to HUD’s 2016 rule entitled “Equal Access in Accordance With an Individual’s Gender Identity in Community Planning and Development Programs.” This action mandates that all housing programs, shelters, and other HUD-funded providers offer services to Americans based on their sex at birth: male or female. The 2016 rule had allowed individuals to self-identify their gender without regard to their biological sex and limited the rights and abilities of HUD-funded establishments, including shelters, to challenge an individual’s self-identification, allowing biological men to enter shelters intended for women impacted by trauma, domestic abuse, and violence.

Also, the Department of Transportation announced that the agency is prioritizing communities with high marital and birth rates for grant funding, which is a startling policy shift but makes sense given America’s collapsing birth rate. In addition, the Department of Justice has confirmed the elimination (more likely no new grants being made, not elimination as I explain below) of environmental justice programs. This seems a bit confusing, since in our experience with writing environmental justice grants, which we’ve written for decades, these are usually EPA and HUD programs, not DOJ. This would be like EPA canceling a program for gang prevention. Another mystery wrapped in an enigma.

I’ve also read and heard media reports about “programs” having been “cancelled” or “eliminated,” some of which presumably are grant-related. It’s hard to know what this means, since there are few specific programs mentioned and it’s unclear if these are permanent cancellations, some sort of pause, or rebranding, all of which I’ve seen in the past, usually during presidential transitions. While I know from experience that the executive branch can successfully muck around with spending appropriated funds in many ways, I don’t think the President can unilaterally “cancel” funding for anything, since the legislative branch, Congress, appropriates funds. Thus, to drive a stake through the heart of an existing program, Congress would need to end the appropriation via a continuing resolution or the budget reconciliation bill soon to be debated. Still, this almost never happens, as we wrote about in this funny 2007 post, Zombie Funding – Six Tana Leaves for Life, Nine for Motion. 

Last Friday, the media reported that the National Endowment for the Arts (NEA) announced that it had “eliminated” Challenge America, a grant program supporting projects for underserved groups and communities. But in reality, the NEA probably didn’t eliminate the program. Instead, it cancelled the current RFP competition and the nearly $3 million in grants that was to be awarded under that program. The administration is launching an effort—perhaps in lieu of traditional federal support of the arts—Task Force 250, which is charged with providing “a grand celebration worthy of the momentous occasion of the 250th anniversary of American independence.” President Trump also renewed his support for the construction of a National Garden of American Heroes and reinstated a 2020 executive order calling to protect monuments from vandalism by “violent mobs.” Anecdotal evidence from grant staff across the country suggests that reentry and recidivism grant funding under the DOJ’s Bureau of Justice Assistance has been altogether cancelled, but this has not been officially announced.

Note to journalists: take the time to learn a little bit about the federal grant system before reporting and at least learn the difference between “eliminating” a program and “cancelling” an RFP. S + A is tan, fit, and rested, so call us and we’ll give you a primer. Or, just read the ~700 posts at Grant Writing Confidential.