Federal grant cuts have a big impact on New Mexico nonprofits, new report finds

Yahoo

24-05-2025

May 24—New Mexico nonprofits are particularly reliant on federal dollars, so federal funding freezes have had a dramatic impact in the state, according to a new report commissioned by three New Mexico foundations.
It is typical for funding patterns to change to align with a new presidential administration's priorities.
But the Trump administration has paused or canceled an unusually wide range of already approved federal grants — at times grant funds that have already been partially spent and were awarded by Congress — because they do not comply with its agenda. That includes money for scientific research, dollars meant to help ranchers make their operations more efficient, and arts program funding.
Approximately 37% of nonprofits in New Mexico rely on government grants, according to the nonpartisan report commissioned by Santa Fe Community Foundation, Thornburg Foundation and Anchorum Health Foundation and authored by The Grant Plant Inc.
To replace federal dollars that have been eliminated nationwide, private foundations would have to increase giving by 282%, the report found.
"This kind of constant change is creating deep, deep uncertainty for a lot of nonprofits," said Allan Oliver, president of the Thornburg Foundation.
A survey of 200 nonprofits operating in New Mexico found that 20% got at least half of their funding from federal grants. The sectors most reliant on these federal dollars were education, youth and family services, housing and environmental organizations.
Organizations are especially concerned about receiving the payouts for already obligated funds, the report found. In New Mexico, 54% of federal dollars for active grant awards have been paid out, meaning close to half could be withheld or canceled.
'Tough decisions'
New Mexico nonprofits are rapidly adapting to the shifting grant landscape, the report says. The survey found that 89% of organizations surveyed are developing contingencies to operate without federal grants.
"Private philanthropy can never replace federal funding, but well applied investments can make a significant difference," the report says.
Quivira Coalition is one of the nonprofits that lost federal grants.
The organization, focused on regenerative agriculture, lost its largest grant, a $3.9 million Partnership for Climate Smart Commodities. The funds were frozen in late January, and the nonprofit was notified the grant would be terminated in April, said Interim Executive Director Leah Ricci.
The five-year contract began in 2023 and was focused on helping livestock producers take waste products such as carcasses or livestock waste, and turn them into something like compost to improve soil health. The original goal was to enroll 50 livestock producers; when the grant was frozen 13 livestock producers hailing from New Mexico, Arizona and Colorado were enrolled.
The Biden-era program was overhauled into a new Advancing Markets for Producers initiative, the U.S. Department of Agriculture announced in April.
"It became clear that the majority of these projects had sky-high administration fees which in many instances provided less than half of the federal funding directly to farmers," said a USDA news release.
Some projects from the canceled grants were automatically enrolled in the new program, if they committed at least 65% of federal funds and directly paid to producers. Other projects can reapply. Quivera is unlikely to reapply for the grant, Ricci said.
"One of the issues is that USDA is not allowing any other types of producer support to be included in the calculation towards that 65%, and so there's all sorts of other support that we provide, like providing producers with grazing management, technical assistance or marketing support," Ricci said.
Instead, Quivera is moving forward with a revised version of the project, supporting the 13 already enrolled producers with funding from donors and foundation supporters. The nonprofit is grateful to have diverse income, allowing it to work without the federal dollars, but Ricci thinks some of the smaller, more community driven nonprofits may have trouble continuing their work without the federal dollars.
"I have talked with a few foundation funders who have said very candidly that they're having to make tough decisions about, do I give this $50,000 to this organization that really critically needs it, knowing that that organization might not make it through this year? Or do I have to make the hard choice to pull back and give that money to someone else because we're worried about organizations not existing beyond this year?" Ricci said.