Podcast: The Federal Funding Crisis: What Nonprofits Need to Know

Season 4, Episode 32

In this episode of All About Capital Campaigns, Amy Eisenstein and Andrea Kihlstedt sit down with nonprofit expert Cherian Koshy to discuss the urgent federal funding crisis affecting organizations across the country. With government funding decisions shifting rapidly, many nonprofits are unsure how to secure financial stability. Cherian breaks down the latest legislative updates, what executive orders mean for nonprofit funding, and how organizations can adapt.

If your organization depends on federal grants or contracts, this episode is a must-listen. Learn what steps you can take now to navigate uncertainty and ensure long-term sustainability.

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Amy Eisenstein:
Hi, podcast listeners. This is the third of a special series of emergency conversations about the current federal funding crisis that many nonprofits are struggling with. Today, Andrea and I are speaking with Cherian Koshy in front of a live Zoom audience. The audience is providing some questions.

Cherian is VP at Kindsight. He’s also on the global board of the Association of Fundraising Professionals, and you can find him everywhere giving smart, thoughtful advice about the nonprofit fundraising sector. We hope you find this conversation enlightening.

What Nonprofits Must Know About the Federal Funding Crisis

So Cherian, why don’t you get us started. You offered to share some insight, although let me just acknowledge things are changing so quickly that what was true yesterday may or may not be true today, and it may not be true tomorrow. But you’re going to kick us off with what we understand to be happening currently legislatively. And also, I’m going to also invite you to just talk about some math that you did over the weekend and tell us what that means.

So kick us off, Cherian.

Cherian Koshy:
Well, first of all, thank you both for having me. It’s great to spend time with you two and talk about these important issues.

So as you all know, there was a executive directive, a memo that was sent out by the president that said, “You are to cease all funding at this day and time.” And over the course of a very short amount of time, a bunch of nonprofit associations and attorneys that are working with those associations engaged in a legislative action, a temporary restraining order and then an injunction to stay that particular memo.

The Current Reality as of Spring 2025

So I want to be clear about one piece, and to amplify what Amy said. The one memo that was sent on January 27th is no longer in effect, whether it’s because of the legislative act or the judicial action to restrain it or because the memo was withdrawn, that particular memo is no longer in effect.

But there are a whole bunch of other memos. There are a whole bunch of other executive orders that have come into play that include things like a review of all funding to nonprofit organizations and their alignment with the values of the current administration and overall government efficiency. You’ve probably heard of the new Department of Government Efficiency that has sort of a sweeping mandate.

So at this point, what I want to clarify is that there is no federal freeze on funding per se. That doesn’t actually mean that people aren’t having trouble getting access to funds. We’ve heard many stories of both individuals and institutions that seemingly can’t access funds. There are a lot of websites that were specifically for nonprofit organizations that are no longer available, and we don’t know exactly what’s happening there.

There was supposed to be a agency-led review that was supposed to be completed in the last week or so. It’s unclear what the deadlines are for those agency reviews to occur and how that will play out.

The most important thing to remember in all of this is that the executive branch has the power to issue executive memos, executive orders to be able to say, “These are ways in which we would implement particular aspects of federal government policy.” Those executive orders have full effect, meaning until they are rescinded or called back or overridden by the judiciary, they have full effect.

However, there is limitation in how far they can go, especially as it relates to federal funding. So the legislature has the ability to create a budget, and so you’ll note that the executive branch can’t just say, “We’re going to eliminate all federal funding to particular thing,” because it’s already been allocated by the legislature. So just be wary of that, up until there’s a new budget, which is happening in this period of time right now, anything that’s been allocated is more than likely going to be funded in some way unless there’s some other aspect that comes into play which would be relevant to your particular organization.

The Reality: Some Things Won’t Be Funded

And that’s where kind of the second piece of this plays out where there’s sort of just a reality of where we are in the political cycle, that there are some things that were funded in the past that will not be funded in the future regardless of what the legislative branch or the judicial branch does. The reality is that in the next three some years, certain things are just not going to be funded. Certainly, some things are not going to be funded at all. There are certain things that are not going to be funded to the same level as they were funded in the past. So we just need to realize that and understand that that’s how that’s going to move forward.

I think the reason why the original memo and all of the things that played out were stopped has a lot to do with the fact that it was just over-broad. It was a catch-all, like everybody loses funding, which is really hard to play out in the courts. What I would anticipate is going to happen in the future is that they will be much more targeted in terms of these things will not be funded, these other things will not be funded.

So if you are in that space and seeing the wide variety of different organizations in the chat, the wide variety of different implications for all of us, so we want to encourage you to ask some questions so that we can kind of work through those details. But the reality is that there will be certain aspects of what has been funded in the past that just won’t get funded in the future.

I think at the moment of all of this happening, there were people trying to jump to solutions. And what I worry about in that vein is that there is no one solution for the dozens of organizations here on this call or the million plus organizations in the US. There’s just not one solution, one answer. A lot of people were talking about diversifying funding. And maybe that’s a good idea for your organization. It might be appropriate. I think we got to talk about how, that’s a different question.

Diversifying Funding is Not a Panacea

But diversifying funding is not the panacea to every organization’s problem. There are some organizations that I know where they derive most of their funding from, whether it’s state or federal governments. And to say you’ve got a 100-million-dollar budget and 99% of that’s from the government, now you need to diversify, that’s not going to happen. That absolutely is not going to happen in a short amount of time, no matter how good of a fundraiser you are or can acquire.

So we have to think more deeply and more nuanced about what this all means. And that’s the last thing that I would mention. Amy, you reached out and mentioned that you saw this LinkedIn post that I had made, and that was really in response to a lot of people saying:

“Well, if federal government’s not going to do this, then private philanthropy just needs to step up.”

And I want to be very careful about the fact that there’s nothing wrong with private philanthropy stepping up to meet the needs of organizations. And I think all of us would encourage the private philanthropy to do even more, but there’s no specific mandate for any private philanthropy, any individual, any private foundation or all of them in concert to fill the gap.

So Steven shared the link to that post, and what I wanted to share in that post was that you can draw your own conclusions about how to play this out, but there’s just math that we have to agree on so that we can start that conversation. The federal government annually spends about $300 billion in funding to nonprofits. And whether you are on one side of the spectrum or the other doesn’t necessarily matter.

The reality is that federal funding of nonprofit organizations represents less than 5% of the federal government budget. So cutting all funding to nonprofits doesn’t meaningfully change the overall federal budget in a way that we can make a real argument. And I have friends who are diehard conservatives. They’re like, “That’s not going to solve our federal debt or deficit problems. Just that alone is not going to do it.”

There are big things like in entitlement programs that are the bulk of federal funding that we just have to know. We don’t need to go into all of that math at this point, but realize that when we look at that federal funding of $300 billion, what do we have in terms of assets for private philanthropy that could be leveraged? And then what are the implications of private philanthropy in some ways or entirely stepping up?

There are pieces of that that we can talk through and that should certainly be part of our conversation here today. But if we were to take all the money available to donor advised funds and private philanthropy and dump it into this problem, it is a bandaid solution. It’s not going to solve the problem in the future. And arguably, I think I’m comfortable making this argument, arguably it would make the problem worse in the future if we were to do that.

There’s No One Solution

So there’s no great solution to what’s happening and people… So I spend a lot of time, as you mentioned, Amy, running around the country or around the world talking to people, and I hear from a lot of nonprofits that they’re like, “What do I do? What do I do in this moment?” So I’ll just leave my remarks to this little bit of advice insofar as I don’t really know what the right answer is.

What I would suggest is that for every organization, it is more important than ever that you are good at storytelling, that you are good at expressing not just what your organization does, not just the organizational centric impact reporting. That’s important. People need to know that you accomplish things in the work that you do. But also to think about the bigger picture of how your work fits into the larger ecosystem.

So one piece of that is that depending on who your representative is or who your congressperson is, they may not agree or align with you values-wise, but is there something that they hold on to that does connect? For example, in almost every, well, I think this is true across the US, but in almost every state, the number of employees of nonprofit organizations is around 10% of the workforce. So if all nonprofits lose all federal funding, I think it’s like 30% of nonprofits around the country get some form of government funding, I’m not saying everybody’s going to lose their jobs, but certainly, people will lose their jobs. What do we do with that unemployment? How do we navigate that, especially in a world where we don’t have… We may be cutting other services to people who may need that help?

The other piece that goes often unnoticed by our elected leaders, and I’ve had the conversation about employment with elected leaders as I’m advocating on the Hill for charitable deductions in the new tax package, but the other piece that goes unnoticed is the spend that our organizations have in their local economies. So think about your organization budget and how much of that gets spent within your local community, within your state, and then certainly within the country.

So all of the things that you’re spending on contribute to other jobs. They contribute to economic growth and state GDP and things like that. These all lend themselves to benefiting the private sector just as much as they have a specific impact on someone getting access to the performing arts or someone getting better dental care or something like that.

All of those pieces are important, don’t get me wrong, but sometimes it’s important for us to see that bigger picture of there’s a CRM that you pay money to every month or every year. There’s a hotel that you might use for an event, for a gala, for a dinner or something like that. And if we don’t have that money to spend, someone else’s pocketbook is impacted by that as well.

Cherian’s Top Recommendation

So start thinking, my biggest recommendation is to start thinking about the stories that you can tell about the impact that you’re having and then the concentric circles around that that are impacted by not just your organization, but frankly, every organization on this call. That’s why community is so important in moments like this because our stories have this massive ripple effect across every community in our country that would, I would argue, devastate local communities if they did not exist, in multiple ways. So when we started thinking about all of those nuances, now I think that we have even more powerful stories and stories that start to resonate across the political spectrum.

Amy Eisenstein:
Cherian, that was awesome. All right, so now let’s take a collective breath because it is so, when you think about it in that context, so overwhelming, right? But the impact of our organizations, as you pointed out, is so much broader than just the clients we serve and the direct mission.

Andrea, do you want to react to anything that Cherian shared?

Andrea Kihlstedt:
First of all, Cherian, I think that was the most cogent description of what’s going on that I’ve heard. So thank you so much for putting it in context, for clarifying things that I think to many of us, including me, are confusing, right? All these executive orders feel contradictory and confusing. And one day they’re one thing and one day they’re another thing. And you put that in the context of the budget process which is going on and the clarity that it is pretty clear going forward that some things are not likely to be funded in the next budget cycles, and some things probably will be funded, at least to some extent, in the next budget cycles. So it’s interesting to think about what those things are.

You also said that 30, did I get this right, that 30% of nonprofits get federal funding? Is that what you said?

Cherian Koshy:
Yes.

Andrea Kihlstedt:
30%. So 70% don’t get federal funding, right? That’s interesting. Now, that doesn’t mean that 70% aren’t affected by all of this chaos, right? They’re not affected in the same way, that their funding is likely to be cut off or is subject to being cut off anytime soon. But we live in times that are unpredictable and chaotic. And that even if your funding is not coming from the government in some way, you have some work to do to figure out how to function. So I was struck by that number.

I was also struck by your call for people to function together, to come together, to be a community that can exert pressure. That while 4% of the federal budget doesn’t sound like a ton, in fact, it’s not insignificant, right? That’s a fair amount of pressure. And as you say, when you take that amount of money and then you have concentric circles out beyond that, of all of the organizations in our communities that benefit from the nonprofit world, the number actually is significantly larger.

Mechanisms by Which Nonprofits Should Come Together

So I put to you, Cherian, what are the mechanisms by which nonprofit organizations should be coming together, can be coming together? Who are the spokespeople who are ongoingly informing our community? Who should they be listening to? What should they be tuning into? Maybe you can help us with that.

Cherian Koshy:
So I think part of it is understanding where your nonprofit wants to engage with this conversation, and there isn’t necessarily one right answer. My guess is that a lot of people on this call, there’s more than likely one approach that everyone might agree upon. And I’m not trying to be intentionally vague, but what I mean by that is to say the administration is what the administration is, the current administration. So there’s a level of fighting against what this administration is doing that is viable, and then there’s another approach or another kind of avenue that is less likely to be successful just because the administration has been very clear about its stance on DEI.

Whether you agree with that stance or not, it will be a lot of work to try and get this administration to fund DEI work. It’s highly unlikely that that will occur. That’s not me discouraging any person or any organization on this call from pushing that agenda if that is what your mission is and that’s what is most important to you. I’m not suggesting that, so don’t hear what I’m not saying. But I’m saying you have a long road ahead of you that involves time and money and other resources that all need to be positioned in order to move that forward.

There are other institutions that are, whether they’re apolitical or quasi-political, that don’t have a very specific stance on some pieces or they have some kind of tie-in that they’re trying to navigate, in which case it’s about pushing those ideas or those parts of the mission that might be more resonant with members of Congress or the overall administration. And then there are folks who are, whether they’re unaffected by federal funding or just unaffected by, they are on a different political side of what’s happening, that’s a different approach whatsoever.

What I think we can all agree upon, however, is that when we are thinking about the implications on the sector at large, there are associations at the state and federal level that are working to make sure that elected officials have a better understanding of these spider web effects. That it’s not as simple as saying, “There’s inefficiency, there’s things that are funded that don’t align with our values,” or whatever. That there’s a bigger piece of the puzzle here, right? So Andrea, you mentioned 5% is not an insignificant amount, especially when we look at the implications.

So organizations like the National Council on Nonprofits or the Association of Fundraising Professionals, or CASE or HP are all working together across the political divide, for the most part, to say:

“We need to raise the profile and awareness of our elected leaders on the implications of nonprofits in their communities.”

And for a lot of elected leaders, this is a nice to have, not a need to have. And they see it as something that is, especially when it was 20, 30 years ago, many of us are fundraising old enough to remember what that looked like. It was a much smaller community, much smaller impact in terms of what was happening. Over the course of the last 20 years, the number of people that the sector’s employed, the economic impact of our organizations, the work that’s being done has tentacles all across our society.

So that’s where I think we all can play a part, and we’re all benefited by being part of those associations, by keeping abreast of what those associations are doing. And most importantly, we don’t have to agree with everything that those associations are doing as much as we need to agree that we’re all in this together.

Indirect Employment Supported by Your Organization

Amy Eisenstein:
So Sarah’s asking, referencing what you said earlier, is there a way to calculate or measure indirect employment supported by your organization? So it might be easy to say, “We employ 15 people full-time in this community,” but how might you talk about that going out? You gave some good examples, but any other thoughts on that?

Cherian Koshy:
Sarah, I don’t know your organization at all, but I noticed that there were some other organizations, like the organizations that I’ve worked with in the past. I used to be the VP of development for Performing Arts Center, and we would do economic impact studies to, and I’m not suggesting that you need to invest in this unless it has a broader implication for the work that you’re doing, but we would identify what the economic impact was for our organization and had, I think it was a college that helped us with that to say:

“For every dollar spent with our organization, earned income and contributed revenue, we had $33 of economic impact.”

And we were able to identify, people stayed in hotels, they ate at restaurants, they did all of these other things.

So think about that for your organization and what you can do with the core things that you do as an organization. Do you host a gala or some sort of other events in the community that you can tie some economic impact to? Without having to spend the money to do a study, but just to say, “These are some of those pieces.” And my guess is that for most organizations, let’s say you have, for ease of math, you have a 100,000-dollar annual budget.

My guess is that most of those dollars are going out in the community in some way, in the form of salary and spend that you have. So it’s not a small number. And then thinking about what does that mean for particular businesses and whatnot. So that’s how I would start.

Uneasy Funding Trends Regarding Liberal Issues

Amy Eisenstein:
Somebody’s asking, how do you think this possible trend identified by the New York Times article regarding large and possibly small donors not funding liberal issues impacting our small, medium nonprofits? Okay. Without reading the article, is there a trend? There’s a trend perhaps by large and small donors not funding liberal issues. I didn’t read the article yet. I would almost think it went the other way because for all the cuts, liberal donors are going to step up, but maybe not.

Cherian Koshy:
I haven’t read the article either, so I won’t comment on the article specifically as much as to say that we know that as a sector, we haven’t done a great job of keeping small and mid-sized donors. That is based upon all the data that’s out there from the Giving USA and the AFP Fundraising Effectiveness Project. The evidence is that we’re not doing a great job of cultivating and keeping small and mid-sized donors.

So whether it’s antipathy to a particular viewpoint, I would say we have a larger systemic issue, and that is that people aren’t giving as much or giving as consistently to typical nonprofit organizations. Again, don’t hear what I’m not saying. It’s not that people are no longer generous, they’re giving in other ways, especially in mutual aid ways, so GoFundMe projects and whatnot.

So when you’re thinking about how this implication might play out in the long run, or I guess even in the medium run, my expectation would be that private philanthropy, whether that’s individual or institutional, meaning private foundations, will have more requests for funding. That undoubtedly is a natural consequence of any sort of decrease in federal funding. If this thing goes down, this other thing has to go up.

Now, you could see that as competition, but I want to be very careful and nuanced about that. People care about the things that they care about, so it’s not so much that if they didn’t care your issue area before, that they’re now completely open to funding it at a really high level.

So we just need to be mindful of the fact that there will be more requests for funding. And I’m not a fan of this phrase donor fatigue. I think there’s other things that we could talk about. But when there are more requests, whatever that is, just makes it harder to make decisions because there’s more causes, more things for people to fund. So we’ve got to think about how those pieces play into the overall generosity that people have, especially with choices that they’re making.

On Taking Away 501(c)(3) Status

Amy Eisenstein:
I want to say that one thing we need to all be careful and wary of is I think the administration, and I don’t think this is too controversial, is going to go after certain organizations that they don’t agree with. And you need to be super careful about your lobbying or perceived lobbying because my guess is that there are going to be attempts at taking away 501(c)(3) status. So I don’t know what you said that triggered that in my head, but I wanted to point that out.

And Crystal, you’re asking if something is legal to withhold funding, and none of us on the call are attorneys. So we are not going to be giving legal advice in terms of what type, if Congress already approved funding, if it’s illegal for them to withhold it. Yes, but I hesitate. We don’t want to give any legal advice.

Cherian Koshy:
Crystal, what I would say is as you are navigating that, it’s exactly right that this will be fought over in courts, and it’s important to recognize that the pattern of President Trump and the administration has been in the past and continues to be what they call muzzle velocity. You can look this up.

The idea is they’re putting out a lot of executive orders, a lot of memos like this, and these instances are sort of designed to do the work that they want to do without having to do the work that they want to do. Meaning while the National Council of Nonprofits raced in to, and did so in a great way, raced in to stall or have the temporary restraining order, there’s only so much time and resource that we, as a sector, have and that you, as an organization, have.

So one thing to be mindful of is where you are picking your battles, especially legal battles that are costly. Because in all cases, regardless of the administration, trying to fight the federal government costs a lot of money and a lot of time. And in the interim, it’s like are you not focused on your core work because you are doing this other piece? So just that’s the thing that I would have you think about more than any piece of advice.

Organizations Should Think About Interim Funding

Andrea Kihlstedt:
Yeah, and let me pick up on that. You use the word interim, which I think is a really good word when things are incredibly unsure for the foreseeable future. I think every organization should be thinking about interim funding, right? You have donors who support you, who have supported you, who feel strongly about you, who are concerned that the bottom may be pulled out from whatever the funding is for whatever you’re doing.

There is a community of concern. And you should be reaching out to those people and seeing if you can get from them the possibility of putting together interim funding, right? It’s not going to be anytime soon that a lot of these things become clear. But you might, and you certainly are not going to be able to take a huge amount of government funds and say, “We’re going to raise all of that of that through private funding.” It’s not going to happen.

But you can buy yourself some time. And in that time, you can begin to look at your programs and see what it is you can hang on to and how you might want to shift and change what you do in accordance with what is coming down the road. Your donors who care about you want to help, and it behooves you as fundraisers to call on them for help and to do that in an organized way where you’re not in a panic, but you’re saying:

“Listen, we want to put together an emergency funding package that will tide us over the next months, year,” however long that period is, “And here’s how much we want to raise in order to do that. Won’t you help us as our donors who are closest to us?”

It’s not going to solve the problem long-term, but it will give us something to support us as we figure all of this out. I think that’s for most everybody in this time of chaos and uncertainty, that’s not a bad fundraising strategy. I don’t know, Cherian, does that sound reasonable to you?

Interim is the Right Way to Think About It

Cherian Koshy:
Absolutely. And I think this ties into Daniel’s question. I think it’s appropriate to keep, especially your lead donors, the folks that are closest to your organization, that are the most invested in the work that you’re doing, up to date on what’s happening.

I do want to, to Daniel, your framing is around COVID. And the thing to remember about the COVID era funding is that that was a peak. If you look at the Giving USA data, that was a peak in funding that we have not yet come back to. Which means, and if you remember the last administration, there was a lot of what was termed rage giving, rage philanthropy, giving to organizations like the ACLU and whatnot. Both COVID funding and rage giving were not sustainable, primarily because they’re not emotions that people want to sit with. They’ll solve the problem.

So interim is a really good way of thinking about it that you want to do leadership briefings, you may need to do some emergency campaign work, but it’s essential that you are reassuring donors of the importance of the work that you’re doing in the long run, so they’re not viewing this as putting money into a sinking ship. That they don’t feel like you’re one paycheck away or one government funding issue away from going under, because no one wants to do that.

So I would highly, highly recommend that you look, before you, certainly do the briefing, but before you do any sort of emergency campaign, think about how you are stewarding your donors, how you are engaging them in a meaningful way so that they see the long-term implications of their work with your organization, so it’s not just a flash in the pan.

Amy Eisenstein:
Yeah, I think that’s exactly right. And to add onto that, I’ll also say yes and. Andrea and I are big advocates of keeping your top donors and close supporters and community leaders up to date and engaged in what you’re doing. And you may go to them, in fact, you should go to them and say:

“Listen, with everything up in the air right now, we don’t have any answers, but here are some things that we’ve been discussing. Here is option one, option two, and option three. What are your thoughts? What are you hearing? How might you help? What are your recommendations?”

The Importance of Leadership Questioning

So Daniel, you’re specifically saying leadership briefings. I want to change that to leadership questioning. Go to your leaders and say:

“Here’s what we’re hearing. Here’s what we know. Here’s what we don’t know. So here are some options that we’ve come up with or some possible scenarios. Now we’d love your input. Which of these resonate? What doesn’t make sense? What haven’t we thought of yet? How can you help us? Who should we be going to?”

So you never want to just talk at somebody.

Andrea Kihlstedt:
Yeah, I’ll pick up just one thing on that. I think fundraisers as organizational leaders, it makes us very nervous to talk to our donors and say, “We don’t know. We don’t know the answers.” We try hard to step forward as though we know what’s happening. And it is a skill, a powerful skill to use uncertainty as the basis for important conversations with your donors. And that’s what you need to be practicing now, because chances are, they’re as confused, uneasy as you are, and will value being invited into a conversation that is a real discussion, that may lead one place or may lead another place.

So drop the notion that you have to know what you’re doing before you go to your donors. You have to be willing to put your vulnerability, the vulnerability of your organization out and invite them to be partners in helping to figure out what is perhaps the biggest crisis that our sector has faced in decades.

Amy Eisenstein:
Bigger than COVID. We couldn’t imagine it five years ago, but here we are exactly almost at the five-year anniversary, and it is going to be a bigger crisis than COVID.

How to Remain Hopeful During this Crisis

Okay. So Crystal’s asking on how to stay hopeful. I want to echo what Cherian said. Andrea said, “Go to your donors. You don’t have to have the answers.: And you don’t want to say, “We’re one paycheck away from closing our doors.”

So go with strength. Say, “Listen, these are the 10 things we’ve come up with that we’re going to do or try,” or, “These are the 10 ideas, and we’re not taking no for an answer.” So you can go to people with strength, not out of desperation, but say, “Listen, here’s what’s happening. Here’s the reality that we’re facing and here’s what we’re hoping to do about it.” Or, “Here are the three things we’re going to try.” So there is a huge difference between going to your donors and saying, “If you don’t help, we’re going to close our doors.” That’s not the message.

Okay, so Crystal wants to know how to stay hopeful in the context of the long arc of history. Which one of you two wants to chime in? Cherian, how are you staying hopeful?

Cherian Koshy:
I have been in fundraising for about 25 years, and there was… The thing that sort of got me into fundraising or sustained me in fundraising all these years is a rabbi from a couple of millennias ago said something that I think about pretty much every day, which is never be afraid of work that has no end. I can promise that while I don’t know every organization in the chat, I know that the work that you’re doing matters, that it makes a difference, and it makes a difference every day to someone in your community, that there are really powerful stories that have yet to be told. And it doesn’t matter if one person says that what you do doesn’t matter, because it does matter.

And generosity always finds a way. It does not matter what the culture says, what the person in power says. There will be a way that your work, it may look different, it may be a different focus area, it may be a different program, way of doing things, but the reminder that I would give you, that I’m holding onto myself, is that the things that we do probably don’t have an end, but we struggle through them and we come out stronger, especially when we do it together.

Amy Eisenstein:
Beautiful. Andrea, what are you doing to stay positive these days?

Andrea Kihlstedt:
I’ll just share a couple of things. First of all, I always feel positive when I look at pictures of the Earth from one of these space telescopes, when I go way out and realize that we are just teeny, weeny little ants. That in the way big picture, this doesn’t feel as important as it does here. So that’s on one big scale. It somehow gives me peace to think about what’s going on from a very, very big perspective.

And on the other, it gives me hope to function very locally, to be sure that I am kind, to be sure that I help people as I can. I have a friend, my husband and I have a friend who is in and out of prison. He’s in Rikers at the moment and has been for some months. He calls every day, and we have the most wonderful conversations every day. It struck me, if he can be resilient, right? If he can be resilient, I can be resilient.

So I think globally, but function locally. Invite friends over. We live in a society where people don’t come together as much as we used to. I guess I would encourage everyone to think about inviting people over for dinner or for brunch or to actually come together, to get off your screens and to realize that we have a ton in common, even no matter our political perspectives. So that gives me hope when I can talk to people who are very different from me, find commonality.

On Losing Federal Funding

Amy Eisenstein:
All right, Kate’s asking about organizations whose mission means that federal funding make them almost certain to lose all their federal funding. I’m not sure if that means that the organization’s going to be defunct, because again, if you’re 90% funded by federal funding, it is going to be… You’re going to have some really difficult decisions to make.

Include your board. I’m going to start there and then pass it over to see if there are other ideas. But I would say if you haven’t called an emergency board meeting yet, you need to be having a weekly emergency board meeting over Zoom to discuss the latest and what’s happening and what the options are. Okay, Cherian, any thoughts on that?

Cherian Koshy:
There are three types of organizations I’ve heard from. Ones that I would say are essentially like government subcontractors, those are the 90 to 99% funded by the government. And if you are in the line of fire with regard to federal funding, then it requires an entirely new business model. That’s not easy, but there’s no moving through that. There’s no private funding that will cover what you need, so it’s scrap what you had, do something else. I have a friend who’s dealing with that and working through those issues.

The second area is where there is a significant portion, whether it’s through government reimbursement or something else where a different… You can keep doing some of the things that you’re doing, but you have to develop an earned income model or a private philanthropy model to sort of offset what you’re losing in federal funding. And depending on the percentage and what can be borne by the community that you serve, that’s potentially viable.

The last is where there is a specific program, whether significant or not in terms of your funding, that is funded by the federal government. In which case, it may be that there’s a new business model or that program gets extracted from what you’re doing. For having done NEA grants in the past, I can tell you if that were the circumstance, we had an NEA grant for a particular program that would probably just cease to exist. There was no way of doing an economic offset in terms of business planning from where we were at the time.

I would say the thing to unpack with regard to all three of those different variations is sit down, hopefully you’re sitting down already with your board, as Amy mentioned, but sit down and say:

“What is the best option for us? What’s mission aligned? What’s appropriate for our staff resources, and particularly our staff wellbeing?”

Those are things that I would consider as part of that conversation.

Amy Eisenstein:
Andrea, any —

Andrea Kihlstedt:
Good to me.

Amy Eisenstein:
Sounds good to you. Yeah. Cherian, I have to say that I’ve found this conversation… I’m very anxious about lots of things these days in terms of what’s happening and specifically for Kate’s organization that, as you said, may need to be scrapped and reimagined from the ground up. However, I will also say that I’ve found this conversation and others we’re having fairly therapeutic. People coming together, smart people who care about the community, who care about other people, who care about their communities, coming together to do the hard work and to think and have the hard conversations and to strategize together and not be alone and isolated. To me, it’s what makes this community really special.

I would say Cherian and I will be at AFP. You’re going to AFP, aren’t you? The big national conference, if you want to come find us in person and give… I’ll be giving hugs. I’ll be taking hugs.

Final Thoughts

All right. Is that how we should end? I think that’s a good ending. You want a final thought?

Cherian Koshy:
I’ll just reaffirm what you said, Amy, around this community is so valuable in the ability to just share with one another what you’re working on because it will expand the idea. The community is so important in bouncing ideas off one another. That’s what we can do in convenings like this to say, “Oh, here’s what we’re thinking about. Here’s what we came up with,” and maybe you can iterate on what someone else in the community is doing, and that’s why I think those communities are so powerful.

Amy Eisenstein:
Thank you, Cherian. Really, we appreciate you.

If you want to read more from Cherian, be sure to visit him at cheriankoshy.com. That’s C-H-E-R-I-A-N-K-O-S-H-Y dot com.

And if you need more thoughts and advice on the present moment, all of these conversations on our federal funding emergency are on our website at capitalcampaignpro.com/emergency.