After President Donald Trump took office in January, nonprofit leaders in Minnesota who work to support communities of color say they noticed an immediate shift.
Companies across the state and country rolled back efforts related to diversity, equity and inclusion (DEI) after Trump issued an executive order in January calling some of these efforts “illegal.” Grants that nonprofits expected to come through were taken away. Some had to lay off staff, or take other measures to protect their finances.
Mary Anne Ligeralde Quiroz, the co-founder of Indigenous Roots Cultural Center, was expecting about $2 million in grants and contracts to come through earlier this year. One grant was through the National Endowment for the Arts. Another was through Ramsey County. But at the beginning of the year, she was notified that the money would not be awarded, with no explanation.
“For us, as a small nonprofit organization, that is a huge amount of money,” she said. Last year, the group’s budget was about $1.5 million.
Due to the funding loss, Quiroz said she had to stop paying off a loan that had helped the organization cover improvements to its building, such as a new roof. Quiroz said the lender allowed her to pause payments, which prevented her from having to lay off staff.
“That was a really difficult time for me as an executive director to make those decisions, whether I was going to pay the loan or pay our people,” she said.
Quiroz is not alone.
The Minnesota Council of Nonprofits surveyed more than 300 nonprofits earlier this year that were facing funding challenges. The report found nearly half of those that responded said their organization had seen a decrease in government funding, and 35% saw a decrease in individual donations. Amid cuts to funding, 82% said they’ve seen increased business expenses.
The report says that due to a “chaotic” landscape caused by rollbacks in DEI initiatives and increased immigration enforcement, half of the nonprofits that responded said they have seen a drop in staff morale.
The report does not break down nonprofits by those serving communities of color, but Nonoko Sato, president of the Minnesota Council of Nonprofits, said those nonprofits have been historically underfunded.
“Funding has been cut, or land stolen from them, or wealth being built off the backs of Black and brown people, this has happened before,” she said.
Funding challenges
The nonprofit Immigrant Law Center of Minnesota provides free legal services to low-income immigrants and refugees.
Earlier this year, the center was notified that it would not receive payment for a grant from the federal government for services that help immigrants who have green cards work toward citizenship.
The organization’s executive director, Jennifer Stohl Powell, said she received a brief notice from U.S. Citizenship and Immigration Services, the grant administrator, saying the program no longer reflected the priorities of the department.
The center was also poised to start a partnership with a local college to give students work experience interning for it. But that college suddenly pulled out.
Stohl Powell said the federal money made up a small portion of the Immigrant Law Center ’s funding, and that the nonprofit has received generous support from individual donors and foundations this year, which allowed it to hire more attorneys to work on cases for immigrants facing removal proceedings.
But she said the organization still has three more years of the administration to get through.
“I think my bigger concern is, long-term, can we sustain that level of support?” she said.
Marquita Stephens leads the Urban League Twin Cities, which provides a multitude of services for African American community members, including education, housing and workforce development.
Stephens said this year the Urban League faced substantial cuts to its housing program, which helps Black residents work toward homeownership.
The loss in $150,000 in funding administered by the Minnesota Department of Commerce caused the organization to lay off staff, leaving just a part-time worker and a contractor leading the housing program. The reduced staffing means that staff can’t spend as much time with clients in the program.
“In my mind, that’s a quality of service issue,” she said.
Antonio Williams leads TONE UP, a nonprofit that provides re-entry services for formerly incarcerated people. He said this year foundations have been less willing to give grants, and he’s also seen a decrease in requests for proposals and contracts.
“We felt our normal funding flow jam up immediately,” he said.
Last year, Williams was able to raise about $500,000 in contracts and grants. He said he’s only been able to raise a fraction of that money this year.
Williams said he had to rely more on relationships he has built with other organizations to secure funding. That work has allowed his nonprofit to continue.
“We’re feeling it, but we’re still alive. We’re still able to impact and affect real change. But it’s not like we’re thriving,” he said.
A corporate chill
Nonprofit leaders say that beyond funding changes, there has also been an overall decline in people supporting work related to racial equity.
Early into the new administration, large corporations like Target rolled back DEI efforts, and some businesses scrubbed information about DEI initiatives from their websites.
“We serve a primarily African American constituency. We’re organized to do that. We can’t omit that, it’s just not an option,” the Urban League’s Stephens said.
She said the public rollback in diversity efforts makes it clear which companies are genuine in their commitment to racial justice work..
“It’s eye-opening. One of the benefits of it is that you know who’s going to stand with you,” she said.
Williams said he’s noticed that more people are reluctant to support TONE UP’s mission. Earlier this year, he was looking for a new office space. He said one property owner, after hearing he employs formerly incarcerated staff, pulled out, citing “safety concerns.”
Coming together
In response to funding challenges, some nonprofit leaders are coming together to support nonprofits led by women of color.
Earlier this year, Niila Hebert, the executive director of the Minnesota Alliance of Volunteer Advancement, lost a federal grant totalling about $400,000. The organization, which was created in 2001, works to support nonprofit organizations through training and resources.
She had to cut all of her staff, leaving her as the only person working at the nonprofit. That’s down from a staff of 10 In 2024. She was hearing similar stories from other nonprofit leaders, especially among women of color.
In response to these challenges, she and other leaders including Sarah Clyne, who previously led EquaSpace, a nonprofit coworking community, banded together to create the Matriarch Giving Circle. The coalition collects funds for nonprofits led by women of color, and has been a space for women in nonprofit leadership to support one another as they try to navigate a challenging funding environment. So far, the group has raised about $2,000.
‘We feel like it’s one strategy to address all of the challenging things that are happening,” Clyne said.
