A Critical Moment for DEI Funding in Nonprofits

The recent $1.7 billion in DEI and environmental justice grant cancellations by the U.S. Environmental Protection Agency (EPA) sent shockwaves through the nonprofit sector.

Many organizations that relied on this funding to support diverse communities, environmental equity, and racial justice initiatives are now left scrambling for alternatives (Reuters, 2025).

The Impact:

• Dozens of community-based nonprofits lost essential funding overnight.

• Programs supporting marginalized groups, environmental sustainability, and racial equity are at risk.

• The future of DEI in nonprofit work is now uncertain, forcing organizations to rethink their funding strategies.

But while these cuts present challenges, they also highlight the need for nonprofits to diversify revenue streams and adopt new strategies for sustaining DEI efforts.

1. Identify Alternative Grant & Funding Opportunities

Why It Matters: Despite federal rollbacks, many private foundations and corporate donors are still prioritizing DEI funding.

Where to Look for DEI Grants:

• Philanthropic Foundations – Organizations like the Ford Foundation, MacKenzie Scott’s Yield Giving, and Open Society Foundations remain committed to equity-focused grants.

• Corporate Social Responsibility (CSR) Initiatives – Companies like Google, Microsoft, and Patagonia have DEI-aligned grant programs.

• State & Local Government Grants – While federal grants are shifting, many state and city-level DEI programs remain active.

• Community & Family Foundations – Local funders often prioritize grassroots DEI initiatives.

Example: After federal cuts, a Midwest environmental nonprofit secured $500,000 in funding from a local foundation focused on racial equity and sustainability.

📌 Action Step: Begin applying for diversified grants that align with your nonprofit’s mission. Check resources like Candid and GrantStation for updated DEI funding opportunities.

2. Strengthen Donor & Community-Based Fundraising

Why It Matters: Relying solely on grants is risky—individual donors and crowdfunding can provide stability.

How to Build a Resilient Fundraising Strategy:

• Engage Existing Donors – Strengthen donor retention by sharing impact stories and hosting exclusive donor updates.

• Launch Crowdfunding Campaigns – Platforms like GoFundMe and Classy can help raise funds from supporters passionate about DEI.

• Offer Membership or Subscription-Based Giving – Monthly donor programs provide consistent revenue.

• Host Fundraising Events – Virtual or in-person DEI-themed fundraising galas, panel discussions, or networking events can attract support.

Example: An LGBTQ+ advocacy nonprofit raised $100,000 in recurring donations by launching a monthly giving program focused on community impact stories.

📌 Action Step: Create a donor engagement strategy and explore crowdfunding as an emergency funding source.

3. Partner with Corporations & Social Impact Investors

Why It Matters: Many corporations are still investing in DEI, even as government funding declines.

How to Leverage Corporate Partnerships:

• Pitch Sponsorship Opportunities – Offer businesses branding and visibility in exchange for sponsorships.

• Engage in Skills-Based Volunteering – Some companies provide funding in exchange for employee engagement opportunities.

• Apply for CSR Grants – Many corporations, including Salesforce, Ben & Jerry’s, and Starbucks, fund nonprofits aligned with equity-focused initiatives.

• Explore Social Impact Investing – Some investors provide mission-aligned funding or no-interest loans to DEI organizations.

Example: A racial justice nonprofit secured a $250,000 corporate sponsorship from a financial services firm seeking to improve DEI in leadership programs.

📌 Action Step: Develop a corporate engagement strategy and apply for CSR grants that align with your nonprofit’s mission.

4. Advocate for Policy & DEI Funding Protections

Why It Matters: The best way to prevent future funding cuts is through collective advocacy.

How Nonprofits Can Take Action:

• Join Advocacy Coalitions – Collaborate with organizations like Independent Sector and the National Council of Nonprofits to protect DEI funding.

• Engage Lawmakers – Build relationships with state and local representatives to advocate for inclusive funding policies.

• Raise Public Awareness – Use media, newsletters, and social platforms to educate supporters on the impact of funding cuts.

• File Legal Challenges if Necessary – Some organizations are challenging anti-DEI funding policies in court.

Example: A coalition of 30 nonprofits successfully lobbied their state legislature to protect DEI funding, securing $10 million in alternative grants.

📌 Action Step: Get involved in policy discussions and advocacy initiatives to safeguard future DEI funding.

Final Thoughts: The Path Forward for Nonprofits & DEI

The $1.7 billion DEI funding cuts mark a pivotal moment for nonprofits.

While federal grants may be shrinking, opportunities still exist through private funders, corporate partnerships, community fundraising, and policy advocacy.

Nonprofits that diversify funding streams, engage donors, and advocate for sustainable DEI policies will be best positioned for long-term impact.

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

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• 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

• 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

• Losing DEI Funding? 5 Alternative Strategies for Nonprofits to Sustain Inclusion Efforts

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

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Sources & References:

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

• National Council of Nonprofits. (2024). The Future of Nonprofit DEI Funding. Retrieved from https://www.councilofnonprofits.org/

• Candid. (2024). Philanthropy’s Role in Advancing DEI. Retrieved from https://candid.org/