Catalyst Biweekly Policy Briefing Issue XIX: Redrawing the Rules

Any hopes that the summer recess would slow the flood of federal policy changes quickly faded with the events of the past two weeks. Here’s a look at what happened this week.

Catch up on our previous installments here.

THE FACTS

MAJOR SHIFT IN FEDERAL GRANTMAKING RULES

• ​​​On August 7, the president issued the executive order, “Improving Oversight of Federal Grantmaking,” which fundamentally changes how federal grants are awarded to nongovernmental organizations. ​​​​​​​
  • ​​​​​​​​​​​​​​​Under the order, every federal agency will appoint a political designee to ensure all grants advance the president’s policy priorities.
  • Agencies cannot issue new funding announcements until the new review process is put in place.
  • The order also changes how grants may be terminated. Current rules allow agencies to end grants if the grantee fails to meet the terms and conditions of the grant. The new order permits agencies to terminate grants “for convenience.”
  • It also bans all grants made for programs that use race as a selection criterion; that do not acknowledge sex as “binary” or suggest it is “a chosen or mutable characteristic”; that could be seen as supporting illegal immigration; or that could be viewed as compromising public safety or promoting “anti-American values.”

WHAT THIS LOOKS LIKE IN OUR REGION

• The changes could have a significant impact on San Diego and Imperial County nonprofits, many of which rely on federal grants as a significant part of their budget.
  • The Policy & Innovation Center identified $674 million in federal grant dollars that went to 126 nonprofits in San Diego County in 2023. Sectors most dependent on federal funds included arts/culture, environment, science, and housing. Half of federal dollars were allocated to education/youth, families/workers, and health-focused organizations.
  • ​​​​​​​Health and medical research thrives in San Diego County due to significant investments by federal grant programs from the National Institutes of Health and others. UCSD and SDSU especially rely on federal funds.
  • Nearly 30% of the San Diego LGBT Community Center’s budget comes from federal grants. Even before the release of the executive order, they had notified all staff that layoffs could begin as early as September as they prepare for the loss of grants and other funding cuts.

EXECUTIVE POWER

• On Monday, the president ordered 800 National Guard troops into Washington, D.C., for 30 days to support law enforcement in the city and announced he was taking control of the Metropolitan Police Department. Although the stated reason for the troop activation is rising crime in the city, recent reports show crime in D.C. is actually at a 30-year low.
  • ​​​​​​​The president must get congressional approval to retain control over the Metropolitan Police Department beyond 30 days, but on Thursday he announced that he would seek to circumvent that requirement if Congress did not grant it outright.
  • The administration said the Guard’s duties will be similar to those performed in Los Angeles. While the Trump administration is currently on trial over whether its use of the National Guard in Los Angeles violated the Posse Comitatus Act, there is some precedent for using the D.C. Guard for law enforcement.
  • On Thursday, Attorney General Pam Bondi announced she was naming DEA Administrator Terry Cole as D.C.’s “emergency police commissioner” to assume all powers and duties of the police chief – in effect taking complete federal control of the police department. This morning, D.C. Attorney General Brian Schwalb filed a suit against the administration for the unlawful use of the Home Rule.
• The president also said on social media that 14-year-olds who commit crimes in the city should be tried as adults and indicated that part of the federalized plan would be to remove unhoused people from the city.
  • In San Diego, federal and state laws have opened the door for more aggressive removal of people living outdoors in “encampments,” and on Tuesday Chula Vista Mayor John McCann announced the city’s intention to follow suit.
• On August 12, the White House sent a letter to the Smithsonian letting them know they will be conducting a review of all museums and exhibitions to ensure they “celebrate American exceptionalism, remove divisive or partisan narratives, and restore confidence in our shared cultural institutions.”
  • The letter cites the March executive order, “Restoring Truth and Sanity to American History” as the basis for the review. The order directs the administration to remove all “improper ideology” from the Smithsonian and associated institutions, with a focus on eliminating content that officials say could “degrade shared American values, divide Americans based on race,” promote transgender individuals or minimize the value of “certain historical events or figures.”
  • This targeted scrutiny follows the administrations much broader cancellation of arts and culture funding through the National Endowment for the Arts, Institute of Museum and Library Services, and National Endowment for the Humanities.
• Earlier this month, the Bureau of Labor Statistics (BLS) released its monthly jobs report and revised reports for May and June showing a hiring slowdown. Such revisions of previous months’ data are a normal part of data collection. However, calling the economic data “politically motivated,” the president fired the head of BLS, Erika McEntarfer.
  • ​​​​​​​The president claimed McEntarfer had faked the job numbers in order to make him look bad despite no evidence to support his claim.
  • ​​​​​​​Accurate BLS data is critical to the economy, as policymakers, businesses, and consumers rely on it to make decisions about essential services, organizational strategy, and workforce projections. The Federal Reserve also uses the data to guide interest rate decisions.
  • This week, the president named McEntarfer’s successor as E.J. Antoni, former chief economist at the conservative Heritage Foundation and a contributor to Project 2025. His nomination has raised concerns that the agency would become more politicized. Senate confirmation is required for Antoni to be appointed.

CENSUS & REDISTRICTING

• At a Thursday press conference, Governor Newsom announced the plan for a special election to allow Californians to vote on new congressional maps. First, it needs a two-thirds legislative approval – expected next week.
• ​​​​​In San Diego County, District 48 – a Republican stronghold represented by Rep. Darrell Issa – could be redrawn to favor Democrats if the plan moves forward. District 49, a Democratic-leaning district represented by Rep. Mike Levin could also be redrawn to make it a stronger Democratic district.
• • In 2010, California significantly changed the way the state determined redistricting lines by creating an independent redistricting commission to ensure that districts are drawn fairly and equitably.
  • A poll released Thursday showed the vast majority of Californians have no interest in abandoning the independent redistricting commission and redrawing maps to favor any party.
• This action was taken after the Texas Senate approved new congressional districts drawn in response to the president asking the state to create additional Republican districts before the midterm elections to help ensure his party maintains control of the U.S. House.
  • ​​At least 51 Texas House Democrats left the state on August 3 to deny the chamber a quorum and delay a vote on the new districts. Both houses must pass the new map for it to take effect. Texas Democratic House members signaled their willingness to return to their state if California introduced their proposal to redraw the lines in California to offset the new Texas lines.
• The move in Texas has ignited fights across the country over the nonpartisan nature of redistricting and the census. Several Democratic-leaning states, including California, launched efforts to gerrymander their own districts to offset the Texas gerrymandering, while Republican-leaning states are pursuing similar efforts to carve out even more GOP seats.
• Typically, districts are redrawn every 10 years based on the census, with the next count scheduled for 2030. However, the president announced he is directing his administration to conduct a new census immediately and redraw districts nationally before the midterms.
  • ​​​​​​​He specifically called for excluding people without legal status from the count, despite the Constitution requiring a full count of all people in the country.
  • The call aligns with the Making American Elections Great Again Act, introduced late last month by Rep. Marjorie Taylor Greene, R-Ga., which calls for an immediate census upon enactment of the bill, counting only U.S. citizens.

TAKEAWAYS

In times of uncertainty, there is strength in connection and power in coming together with a shared purpose. Across the Catalyst network, funders are meeting the moment — responding to uncertainty with clarity, compassion, and collaboration. You can join them by taking the following steps:

• Identify ways your funding can supplement pivots: UC San Diego has awarded pivot grants to 17 biomedical research projects that lost federal funding, bolstered by a $1 million donation from the Prebys Foundation, a Catalyst member.
• ​​​​​​​Move more money, faster: Read about how Catalyst member The California Endowment has doubled its payout rate, moving up to an additional $160 million to California communities each year for the next three years.
• ​​​​​​​Learn how other organizations are responding: New emergency funds continue to roll out as more federal funding freezes take effect. See what fellow philanthropic organizations are doing to assist nonprofits as funds they relied on are stripped away.

RESOURCES

• Join the California Policy Forum and Catalyst of San Diego & Imperial Counties on August 26 at 10:00 a.m. for Guidance for Nonprofits and Foundations Facing Federal Pressure. A panel of two of the state’s most experienced nonprofit attorneys will provide an expert briefing, guidance, and tools to help you better understand and address the federal pressure or legal threats that your organization might be facing.
• Save the Date: The United Philanthropy Forum’s Virtual Policy Institute will take place on November 5, 2025. The virtual forum will bring together philanthropic leaders and advocates to collaborate and strengthen advocacy capacity across the sector.
• Join Philanthropy California, Office of Community Partnerships and Strategic Communication, and the Census Equity Initiative on August 28 at 10:00 a.m. for “Making California Count: 2030 Census State Launch.”

Talk to you soon,

Megan Thomas
President & CEO
Catalyst of San Diego & Imperial Counties