Federal grant freeze is squeezing local nonprofits, who were counting on funds

When the staff members of Studio Two Three learned that the federal grant money that would help repair their community arts space in Manchester had been halted, they immediately expressed emails of frustration with each other about what they viewed as a “despicable” decision.

The paused grant would’ve provided $200,000 to fix their 86-year-old building’s HVAC unit, help seal drafty windows and improve their community fridge. But now things remain unclear for the improvements of the organization – which serves about 20,000 residents each year. 

“I think we were all processing in real time,” said Kate Fowler, the studio’s director of community partnerships and development. “It’s horrifying. We’ve been counting on this grant.”

Studio Two Three is not alone. Local nonprofits in Richmond are grappling with the sudden freeze in federal grant funding since the Trump administration announced it in a memo late January. And while the administration has rescinded that memo, many groups still have not seen their funds.

The burden on local nonprofits was already at an all-time high before the funding cuts, said Andrew C. Schoeneman, program chair and associate professor of Nonprofit Studies at the University of Richmond. 

“Nonprofits are already filling in the gaps because the public sector has withdrawn, over the last several decades, from providing the basic human services,” he said. 

Federal funding for services such as housing, healthcare, hunger relief, and others have been slashed by the government many times, Schoeneman said. This has caused nonprofits to step up in providing those services, especially for people of color and low-income residents. 

“Now this is just another hammer blow to people who are struggling,” he said. “So because the burden is now heavier for nonprofits, the need for funding is even greater.”

Completed projects await funding

Josh Stutz, executive director of Friends of the James River Park (FOJRP), was set to be reimbursed for their program that aims to eradicate invasive plant species in the park and an ongoing plan that will provide a comprehensive understanding of the park’s natural resources.

“I mean, these are programs that are in good standing,” Stutz said. “Essentially we do the work, they check the work, we get paid for the work. It's not the type of fraud and abuse that these cuts are meant to prevent.”

Shelly Barrick Parsons, executive director of Capital Trees, said her organization has been directed to try not to incur any more expenses due to the grant funding pause. Like FOJRP, Capital Trees provides planning, planting, and maintenance of public green places throughout Richmond.

“But that's not how that works for us, because our project is well under construction and we've signed contracts with the contractors. We have made a commitment to the community,” she said.

That project, called Hotchkiss Green, aims to turn Hotchkiss Park into a space that includes walking trails, a garden, enhanced tree canopy for healthier air quality and better stormwater management. The park is blocks away from the Six Points area that has become a hub for affordable housing development. 

Parsons said the organization intends to complete the project that began in August last year. But it is now unclear if the paused grant for the project, which would’ve provided $62,400, will be reimbursed. 

“So when we don't get reimbursed for the funds, that's taking away from both future projects and the management plan, and we'll have to go out and raise that money somewhere else,” she said.  

Given the speed grant applications traditionally work at, many nonprofits can’t come up with new sources of income quickly, meaning they’ll have to adjust operations because they don’t know how long the pause will last. 

Schoeneman said that nonprofits will have to look to residents and private donors in the community to step in to fill the hole that the halted grants have created. But that shift could be “hopeful and encouraging.”

“We need to come together as organizations and as communities and figure out how to serve the people as effectively and efficiently as we can. And sometimes that's better when it's done at the community level,” he said. “It could be an exciting moment.”

That moment is far from assured, though, and local nonprofits are feeling the pain in the interim.

Contact Reporter Victoria A. Ifatusin at vifatusin@richmonder.org