Adapt or Resist? How to Survive the Threat of Political Litmus Tests for Federal Grants

The terms of survival for nonprofits that receive federal funding changed on August 7 when the White House issued an executive order shifting final decisions on grants from independent reviewers to presidential appointees. The order requires alignment with Trump administration views to qualify for support and creates mechanisms to reward allies and cut off opponents.

Federal grants have always reflected political priorities, but in the past, those shifts were tied to policy agendas and program goals. What’s different now is that political loyalty itself is being written into the rules, turning what was once an imperfect but needs-based system into one based on loyalty.

The stakes are enormous for nonprofits, ranging from local service providers to national cultural institutions. A recent Chronicle of Philanthropy and Associated Press analysis showed that even in wealthy districts, most nonprofits would struggle to survive without government grants. Only two congressional districts in the country, one in parts of Orange County, Calif., and one in the suburbs west of Atlanta, could expect to avoid budget deficits if all public funding disappeared.

I’ve seen these stakes firsthand. Over my career, I have worked with more than 100 nonprofits nationwide to secure some $1.6 billion in competitive federal funding. That support has, among other things, expanded health care in the deep South, delivered generators to Puerto Rico after disasters, strengthened climate resilience in rural Alaska, and launched community college work-force programs in small towns.

My perspective is also personal. Growing up the child of a young single widow, I know the difference it makes when help arrives — and the harm that follows when it disappears.

The consequences of the new federal funding rules will fall hardest on families like the one I grew up in, determining whether a rural hospital stays open, a tribal housing project is completed, buses keep running for workers, and an after-school program continues. They will also affect the ability of philanthropic regranting programs to continue supporting grassroots partners.

For philanthropy, the question is no longer whether to get involved, but how. Rapid-response funds to replace pulled grants, legal defense support for targeted grantees, and coordinated advocacy to resist political litmus tests are now essential to protecting the nonprofit world.

7 Steps to Take Now

In an environment in which political loyalty is being written into the rules of public funding, adaptation by nonprofits must begin with moral clarity. Every step should protect an organization’s values while ensuring its survival and safeguarding the community it serves.

1. Set and defend your red lines.

Decide now what you will never do to keep a grant. Boundaries might include targeting or excluding people based on identity, erasing historical truth, promoting false information, or directly harming those your organization serves. Define these boundaries with your board, leaders, and staff so every decision reflects the same principles.

2. Show alignment without compromise.
Match your existing work to agency priorities without altering your mission. If the U.S. Department of Agriculture emphasizes rural economic growth, then highlight programs that buy from local growers, contract with small processors, or employ community members. Build a simple crosswalk between programs and agency goals, prepare staff guides, and use neutral language from the executive order to signal alignment while holding firm to your values.

3. Build coalitions that cannot be picked off.
Form alliances with groups that share your values and will stand together if funding is threatened. Coordinate legal strategies, share intelligence, and pool emergency funds to keep programs alive. Maintain rapid communication, joint advocacy, and mutual-aid agreements so if one group is hit, others can step in with public backing, operational support, or service coverage. Keep trusted ties with career agency staff and sympathetic appointees who can help shield coalition members from harm.

4. Audit your current awards for risk.

Know exactly where you are vulnerable. Review your agreements for clauses that allow a funder to end the grant at any time, such as “termination for convenience.” Understand what could trigger a funding loss, and clarify the process for accessing funds your organization has already been awarded so you can act immediately if new requirements are added.

5. Track agency actions as they happen. Each agency will apply the executive order differently. Sign up for agency newsletters, grants.gov alerts, and webinars. Identify which agencies move the fastest, use the broadest prohibitions, or change program areas most aggressively. Then adjust your funding strategy accordingly.

6. Diversify funding before you are forced to. Develop state, regional, philanthropic, and corporate funding streams now. For grant makers, this means setting aside funding pools that can be deployed quickly to bridge gaps when federal awards are rescinded.

7. Document every impact as evidence. Keep a record of policy changes, proposal rejections, delays, and service disruptions. This information is vital for legal challenges, advocacy efforts, public education, and showing other funders why your work urgently needs their support.

Adaptation vs. Complicity

Since the executive order was announced, I’ve heard sharply different responses from colleagues and clients across the nonprofit world. Some have argued for adaptation, including adjusting language, revising deliverables, and meeting new requirements in ways that allow core work to continue. Others have rejected adaptation outright, warning that any engagement under these rules risks legitimizing an authoritarian shift.

The fear that adaptation can slide into acquiescence is valid. But the choice to walk away is not equally available to all.

Adaptation, when guided by clearly defined red lines, is not endorsement. It is a survival strategy. When those lines are crossed, the strategy must change. That might mean refusing federal funds entirely or shifting to different funding models, including state or regional government sources that are insulated from the federal political climate; pooled philanthropic funds in which multiple foundations combine resources to quickly replace rescinded federal support; and values-aligned corporate donors whose commitments include both funding and shared responsibility for program outcomes.

Resistance can take place both within and outside the federal system. The latter includes advocacy, movement building, mutual aid, and legal challenges, while the former entails doing what’s needed to safeguard communities and sustain a mission while adhering to red lines. Endurance, after all, is not retreat. It is the refusal to abandon those who depend on you.