Adapting to the DEI Funding Crisis

As federal and state governments scale back DEI funding, nonprofits committed to diversity, equity, and inclusion are facing urgent financial challenges.

The recent $1.7 billion in DEI grant cancellations by the U.S. Environmental Protection Agency (EPA) is just one example of a broader shift away from public DEI investment (Reuters, 2025).

The Impact of DEI Funding Cuts:

• Nonprofits are losing critical resources to sustain diversity-driven programs.

• DEI initiatives in education, workforce development, and social services are under threat.

• Equity-focused hiring, leadership, and outreach may be deprioritized due to financial constraints.

But nonprofits can still adapt. This article explores five alternative funding strategies to sustain DEI efforts in a rapidly changing landscape.

1. Tap into Corporate Social Responsibility (CSR) Funding

Why It Matters:

While government DEI funding declines, corporations remain strong supporters of DEI initiatives.

Many companies are investing in equity-focused grantmaking, sponsorships, and partnerships.

How to Secure CSR Funding:

• Apply for corporate DEI grants – Companies like Google, Salesforce, and Patagonia offer funding for inclusion programs.

• Offer DEI training & partnerships – Many companies need diversity consultants and nonprofit partners for internal programs.

• Pitch corporate sponsorships – Businesses seeking brand alignment with DEI values are often willing to fund nonprofit events and programs.

• Leverage employee giving programs – Some companies match employee donations to social justice and diversity causes.

Example: A racial justice nonprofit partnered with Microsoft’s CSR team, securing a $300,000 DEI workforce training grant to replace lost government funding.

Action Step: Research CSR grant opportunities and build a strategy to pitch DEI sponsorships to corporate donors.

2. Strengthen Individual Donor Engagement & Crowdfunding

Why It Matters: Nonprofits that diversify funding through individual giving are more financially resilient. Direct donor engagement can provide sustainable, unrestricted funding for DEI programs.

How to Build a Strong Donor Base:

• Create a Monthly Giving Program – Offer supporters an option to donate small recurring contributions.

• Use Crowdfunding Platforms – Websites like GoFundMe, Classy, and Donorbox can amplify grassroots DEI fundraising efforts.

• Develop Storytelling Campaigns – Share impact-driven DEI stories to encourage larger donations.

• Host Virtual & In-Person Fundraisers – Engage donors through webinars, networking events, and storytelling nights.

Example: A small nonprofit in Chicago raised $150,000 through crowdfunding after DEI grant cuts by mobilizing community support via social media.

Action Step: Launch a DEI donor campaign, highlighting how equity-focused programs impact real lives.

3. Explore Impact Investing & Social Enterprise Models

Why It Matters: Impact investors and mission-driven revenue streams can provide long-term financial sustainability for DEI programs.

How to Leverage Impact Investing:

• Seek mission-aligned investors – Some venture capitalists and social impact funds support nonprofits with equity goals.

• Develop a social enterprise model – Consider launching DEI-related services like consulting, job training, or leadership development.

• Apply for impact-driven loans & grants – Some nonprofits can access low-interest loans for sustainability projects.

• Collaborate with B Corps & ESG Investors – Businesses focused on environmental, social, and governance (ESG) impact often fund DEI work.

Example: A nonprofit that lost federal funding for workforce diversity training partnered with impact investors to create a fee-based DEI consulting program, generating $500,000 annually.

Action Step: Assess whether your nonprofit can launch a social enterprise model to generate long-term DEI funding.

4. Apply for Private Foundation Grants

Why It Matters: While federal DEI funding is shrinking, many private and community foundations are increasing their commitment to equity-focused grants.

Top Foundations Funding DEI in 2025:

• Ford Foundation – Invests in racial equity, gender justice, and economic inclusion.

• MacKenzie Scott’s Yield Giving – Funds grassroots DEI initiatives without complex application processes.

• Kresge Foundation – Supports diverse leadership in nonprofits.

• Open Society Foundations – Invests in social justice and human rights DEI efforts.

• W.K. Kellogg Foundation – Prioritizes racial equity and community engagement.

Example: After losing a federal grant, a nonprofit secured $750,000 from the Kresge Foundation to continue their BIPOC leadership development program.

Action Step: Identify at least three DEI-focused foundations and apply for alternative grants.

5. Advocate for Policy Change & Sustainable DEI Funding

Why It Matters: Nonprofits can protect future funding by advocating for state and local policies that sustain DEI investments.

How to Engage in DEI Advocacy:

• Join nonprofit policy coalitions – Groups like the National Council of Nonprofits lobby for DEI funding protections.

• Educate lawmakers – Work with local representatives to propose alternative funding solutions.

• Mobilize public support – Encourage communities to speak out against harmful DEI funding cuts.

• File legal challenges if necessary – Some groups are suing over anti-DEI legislation to protect nonprofit funding.

Example: A coalition of civil rights nonprofits successfully lobbied their state legislature to restore $10 million in DEI grants after public outcry.

Action Step: Get involved in policy discussions and advocacy initiatives to protect DEI funding.

Final Thoughts: A New Era for Nonprofit DEI Funding

While DEI funding cuts pose serious challenges, they also offer an opportunity for nonprofits to rethink financial sustainability.

By diversifying funding sources, engaging donors, and advocating for equity protections, nonprofits can continue to drive meaningful impact in 2025 and beyond.

The future of DEI in nonprofits depends on adaptability—organizations that embrace new funding models will remain strong.

How Diversity.com Supports Nonprofits & Mission-Driven Organizations

At Diversity.com, we help nonprofits build diverse, inclusive teams that reflect the communities they serve. We support nonprofit leaders, HR professionals, and job seekers in navigating the evolving DEI landscape within the mission-driven sector.

Whether you're expanding your team, increasing leadership diversity, or seeking a meaningful career in the nonprofit world, we provide resources, a nonprofit job board, and expert insights to support your mission.

For Nonprofit Employers & HR Professionals:

✔ Create a free employer account — Find mission-driven professionals who share your commitment to equity and impact. Choose from single job postings or subscription-based plans for ongoing hiring needs.
✔ Access a diverse talent pool — Connect with qualified, purpose-driven candidates from diverse backgrounds to strengthen your organization.
✔ Stay informed with expert DEI insights — Get the latest on inclusive hiring best practices, leadership diversity strategies, and nonprofit workplace trends.

For Job Seekers in the Nonprofit Sector:

✔ Find nonprofit job opportunities with organizations that prioritize DEI — Work for mission-driven employers committed to equity and social impact.
✔ Create a free job seeker account — Discover roles that align with your values, purpose, and professional goals.
✔ Gain insights into inclusive nonprofit workplaces — Learn about organizational DEI commitments, hiring practices, and leadership diversity before applying.

We’re committed to helping nonprofit employers and job seekers build stronger, more inclusive teams to drive meaningful change.

Explore our platform today and take the next step toward a more equitable nonprofit sector.

If you have any questions or need assistance, feel free to Contact Us Here. Our dedicated support team is ready to help!

Related Articles

• The Nonprofit DEI Leadership Gap: Why Diverse Leadership Matters

• How Nonprofits Can Build Inclusive Workplaces & Improve Hiring Practices

• The State of DEI in Philanthropy: Are Funders Still Prioritizing Equity?

• 5 Community Engagement Strategies to Make Nonprofit Programs More Inclusive

• Why Nonprofits Must Prioritize Diversity to Stay Competitive in 2025

• Nonprofits & DEI Funding Cuts: How to Adapt After $1.7 Billion in Grant Cancellations

• Illinois’ Nonprofit Diversity Law Under Federal Attack: What This Means for DEI in Other States

• How Nonprofits Can Build Inclusive Workplaces & Improve Hiring Practices

• Should Nonprofits Speak Out on DEI? How to Take a Stand Without Risking Funding

• The DEI Lawsuit Against the Trump Administration: What It Means for Nonprofits

• Ways Nonprofits Can Build Inclusive Workplaces Without Violating New DEI Restrictions

• Nonprofit Diversity in Jeopardy? How New Federal Orders Are Impacting DEI Initiatives

Sources & References:

• Reuters. (2025). EPA cancels $1.7B in DEI and environmental justice grants. Retrieved from https://www.reuters.com/