Trump's Billions in Climate Cuts Have Nonprofits Scrambling to Survive

Mint

28-07-2025

If any nonprofit epitomizes the whiplash experienced by climate advocacy groups in the US over the past few years, it's Rewiring America.
Founded in 2020 shortly before former President Joe Biden was elected, the organization focuses on shifting US homes from fossil fuel-powered appliances to electric ones like heat pumps — a prime goal of Biden's Inflation Reduction Act when it was passed in 2022. Rewiring America was poised to receive nearly $500 million from a $27 billion program created by that law.
In February, the group was blocked from accessing those funds, and the Environmental Protection Agency, which administers the program, has since terminated $20 billion in grants because of 'substantial concerns' about 'program integrity, the award process, programmatic fraud, waste, and abuse, and misalignment with [the] agency's priorities.' The program is under investigation by the Federal Bureau of Investigation, according to the agency. Meanwhile, grantees have sued over frozen bank accounts.
The funding uncertainty put Rewiring America in a bind, says Chief Executive Officer Ari Matusiak, 'and so we had to make the decision to operate financially as though the dollars weren't there.'
It's led to Rewiring America laying off 36 staff — more than a quarter of the organization — and scaling back its work while putting more focus on regional projects.
President Donald Trump's assault on clean energy regulations and funding has hit other parts of the climate NGO sector. Biden-era programs that injected billions into nonprofits have been culled, and leading philanthropists have warned they'll be unable to fill in the gap.
At risk is the energy transition in the US as nonprofits struggle to provide services while also playing defense to protect remaining federal climate programs.
'We still need to act now to stop some of the worst impacts of climate change,' says Randall Kempner, founder and executive director of the Climate Philanthropy Catalyst Coalition. 'That fact has not changed. If anything, our ability to move on that has been negatively impacted by the change in the administration and its policies.'
Rewiring America isn't alone: US climate-related nonprofits have cut positions and looked for other ways to cut costs in recent months as the flow of funds has dried up. Environmental group RMI has also cut jobs, laying off about 10% of its staff in May following federal funding cuts. The New Orleans-based nonprofit Deep South Center for Environmental Justice had to lay off eight staffers after losing a $13 million, five-year federal grant in February, says Beverly Wright, the group's founder and executive director.
'We hired a lot of people we had to let go,' Wright says. 'I thank God we hadn't hired even more.'
Nonprofits were among the entities eligible for around $54 billion of the IRA's nearly $105 billion in climate grants and direct agency spending, according to the Inflation Reduction Act Tracker, a project run by Columbia Law School and the Environmental Defense Fund.
For organizations highly dependent on public money, 'the funding became so uncertain that their survival required contracting the workforce,' says Alexander Reid, a tax policy expert and nonprofit consultant at BakerHostetler who works with many climate nonprofits.
The White House didn't respond to specific questions about the effect of cuts on nonprofits. Spokesperson Taylor Rogers says the tax law Trump recently signed 'will create thousands of good, new, good-paying jobs thanks to the explosive growth' it will bring.
Rewiring America is part of a coalition dubbed Power Forward Communities that applied for a grant from the $27 billion Greenhouse Gas Reduction Fund , which supports providing clean energy in low-income and disadvantaged communities.
The group was awarded $2 billion last year, of which Rewiring America itself was set to receive nearly $500 million over seven years to help electrify homes at a discount.
The EPA specifically singled out Power Forward Communities before it terminated $20 billion in GGRF grants, calling it 'a new nonprofit with ties to Stacey Abrams' — who previously worked with Rewiring America — and suggesting that the organization shouldn't have received funding because it was new and had limited revenue in 2023.
Despite the layoffs, Rewiring America is still moving forward with the home equipment upgrade program, though at a smaller scale, a spokeswoman says.
The group has also decided to focus its efforts on states and localities and invest less in federal work, which the organization sees as less winnable, says a former employee impacted by the layoffs. The five employees dedicated to state and local policy were unaffected by the layoffs, a spokesman says.
Power Forward Communities is suing Citibank, accusing the bank of 'unlawful suspension of accounts,' which the group says it is legally entitled to. But the organization has had to lay off staff, and two of the coalition's five members — Habitat for Humanity International and United Way Worldwide — have left.
Climate United Fund, another GGRF recipient that also had its money frozen, is suing Citibank alongside Power Forward Communities.
The group has lost about 10 of 35 staffers since February due to layoffs, departures and reassignments, says Chief Executive Officer Beth Bafford. Coalition members CPC Climate Capital and Self-Help Climate Capital have also had to fire and reassign staff, Bafford says.
When the Kresge Foundation surveyed grantees earlier this year about the impact of federal grant cancellations, as many as half of groups receiving climate-related grants reported that they were either already affected or at risk of being affected. Many were benefiting from IRA funds, and shortfalls ranged from 20% to up to 80% of their budgets.
RMI, which now has fewer than 700 staffers, had five federal agreements canceled, according to a spokesperson. Those represented a relatively small portion of the group's overall revenue — around $7.5 million compared to $170 million in revenue and support listed in its most recent annual report — but the philanthropic organizations that provide most of its funding are also facing uncertainty, the spokesperson says.
Smaller NGOs working at the local or regional level are also reeling — and often have fewer resources to cushion the blow.
The Deep South Center for Environmental Justice was expecting funding to help dramatically scale up the group's work with community-based organizations focused on climate resilience issues like flash flooding, overflowing sewers and toxic air in underserved areas. The nonprofit previously partnered with 10 to 20 community groups a year and aimed to reach at least 200 across 14 states.
'We're back to getting all these phone calls we can't respond to,' Wright, the executive director, says. 'It's disheartening and stressful.'
The IRA grant was one of two big federal programs supporting the group's work, she says. It hasn't heard back about the other grant, which has helped fund the center for more than 30 years. Without it, the organization may need to lay off more staff.
Not all organizations are feeling the same pressure. Stand.earth Executive Director Todd Paglia says that the advocacy group has never accepted corporate or government cash and that its model is designed specifically to avoid political shifts' impact on grants and giving. 'We want to maintain our independence,' he says.
Paglia says that the organization has a 'diverse stream of revenue sources,' including tens of thousands of donors, foundations and many high-net-worth individuals.
'We are not having the downturn that a lot of groups are having,' he says.
Some foundations are increasing their giving or easing administrative processes for grantees. But 'there are definitely going to be some foundations who do not want to run afoul of the Trump administration,' says Kempner, the founder and executive director of the Climate Philanthropy Catalyst Coalition, given its attacks on 'private-sector organizations with whom it disagrees.'
Large institutional foundations are most likely to increase their grantmaking, says Kempner, whose coalition is composed of philanthropic networks, advisory firms and foundations. Corporate giving has also continued, he says, but organizations aren't talking about it as much or are shifting how they describe their climate programs, part of a phenomenon known as greenhushing.
Philanthropies are also more likely to focus on legal defense of policies like the IRA and areas where there may be more climate momentum, including at the state and local level, Kempner says.
The MacArthur Foundation announced in March that it plans to increase its giving over the next two years in response to Trump's attempts to cut budgets, going from 5% of its endowment to 6%. However, the extra cash will be spread across multiple focus areas, says Deborah Philbrick, a senior program officer within climate solutions at the MacArthur Foundation.
'It's not the role of philanthropy to backfill for the government in all cases. It's a balancing act,' Philbrick says. Some organizations she oversees are reporting funding gaps in the millions, she added.
The Kresge Foundation, which provides about $20 million in grants to environmental organizations a year, says it is simplifying its processes to help nonprofits spend 'time and energy where it is needed most,' according to a letter President and CEO Rip Rapson sent out to more than 900 grantees on June 3.
Kresge anticipates spending more this year to help grantees survive the federal funding pullback, says Rapson, noting nonprofits don't have the cash reserves needed to get through a year or 18 months.
'There's no way that philanthropy over the next two or three or four years can fill in where the federal government has pulled back,' he says. 'A foundation like Kresge is a mid-sized foundation, and yet we could deplete our annual grantmaking easily with just a handful of grants to people who are in vulnerable positions.'
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