Hello again.

This week’s briefing lands in your inbox a day early because tomorrow, July 4, is the Independence Day holiday. We invite you to join us in celebrating the America that we want and deserve: one that lifts up its people, supports those in need, and welcomes those pursuing a safe and prosperous future. The budget passing gives some certainty to the challenges we will face. Philanthropy continues to have an important role to play – voicing your values, protecting community advocacy, and ensuring that the nonprofit sector survives funding cuts and attacks on its work. The America of our future is the one we make together. Read on for the latest. (Catch up on our previous installments of this briefing here.)

 

THE FACTS

FEDERAL & LOCAL BUDGETS

• The budget bill is headed to the president for a July 4 signing ceremony. It passed the House midday Thursday with a vote of 218-214, with two Republican congress members joining every Democrat in voting against the bill.  
  • The bill adds $4 trillion to the U.S. national debt, primarily from tax cuts to higher-income individuals and businesses, as well as increased funding for deportations, a border wall, and military spending. While some provisions that would negatively impact the philanthropic sector were removed from the bill, provisions that threaten food assistance and health care for millions of Americans remain. Tax breaks for clean energy were also rolled back.   
  • After a lengthy overnight session, the Senate passed the reconciliation bill Tuesday morning. Three Republican senators joined Democrats in voting against it, requiring a tiebreaker vote by Vice President JD Vance.  
  • On Wednesday, the House majority leader announced in the middle of the night that he had the votes after overnight negotiations with a handful of Republican holdouts to overcome opposition during what had been a five-minute procedural vote.  
  • And mid-morning Thursday, Minority Leader Hakeem Jeffries concluded his use of the “Magic Minute” privilege, having spoken for more than eight hours, reading letters from every state from Americans who rely on Medicaid and SNAP. He asked Republicans who had expressed misgivings about portions of the bill to show “John McCain levels of courage” to join the Democrats in voting no. His speech ended and the path opened for a vote to take place. 
• On June 23, the City of San Diego approved a $6 billion budget for fiscal year 2026 after the original version was amended through a series of actions by the mayor and council.
  • The budget will preserve Monday hours at 16 libraries, fully restore recreation center hours, maintain restroom service at beaches and Balboa Park, and keep beach fire pits.
  • Mayor Gloria used his line-item veto to eliminate management positions in the Office of Race & Equity; the position of Chief Operating Officer; funding for the Community Projects, Programs and Services (CPPS) grant program; funding for the Arts, Culture, and Community Festivals (ACCF) program; funding for the homeless outreach team (PATH); and funding for brush management. 
    • City council overrode parts of the mayor’s veto and reinstated some funding for brush management, flood prevention, and recreation programs at reservoirs. They also reinstated $900,000 for funding for CPPS and $250,000 for positions at the Office of Race & Equity. 
    • The final budget includes a plan to pay for programs being kept by charging for parking at Balboa Park and for non-residents at the San Diego Zoo, as well as the implementation of numerous new parking meters near Balboa Park and extending the enforcement of meters by two hours. 

 

LEGAL DECISIONS

• The Supreme Court ruled last week that judges’ rulings (in most cases) can only apply to the individuals named in a lawsuit and cannot be extended to others unless the case becomes a class action suit. This means that nationwide injunctions that courts have ordered in cases concerning immigration, funding freezes, and other issues will be limited in the future. 
• The Supreme Court paved the way last week for states to bar Medicaid payments made to Planned Parenthood. Medicaid covers cancer screenings, birth control, and testing and treatment of sexually transmitted infections (and is already barred from being used for abortion services).  
  • Planned Parenthood has 20 health centers in San Diego, Riverside, and Imperial Counties. Across those centers, slightly over 80% of services provided can be covered by Medicaid, and 55% of all Planned Parenthood’s funding comes from Medicaid. 
• On June 20, a federal judge indefinitely blocked the Trump administration from revoking Harvard’s ability to host international students. While Harvard and the administration had reopened talks over the last two weeks, the Joint Task Force to Combat Anti-Semitism, a Trump Administration multi-agency collaboration, sent a separate letter on Monday stating that Harvard is in “violent violation of Title VI of the Civil Rights Act” due to their response to antisemitic incidents on campus. 
  • In our region, international students comprise a large population at our colleges and universities. UCSD hosts over 8,000 (about 20% of the student population); SDSU has more than 1,200; and both CSU San Marcos and USD enroll over 500 international students each.  

 

NATIONAL & GLOBAL NEWS

• On Wednesday, a federal judge ruled that the president’s proclamation of an “invasion” at the southern border is not sufficient to grant him the authority to bar asylum or deny other protections that allow temporary stay in the United States. The ruling requires that all procedures in the Immigration and Nationality Act must be followed by the administration.  
  • The judge is allowing a two-week pause on the implementation of the ruling to allow the administration to appeal.  
  • Prior to the executive order that abruptly halted asylum in January, hundreds of individuals moved through our region each day to travel to their final destination. Thousands are now temporarily sheltering in Tijuana, Mexicali and other Mexican border towns awaiting the opportunity to resume their progress. 
• University of Virginia President James E. Ryan stepped down last week under pressure from the Justice Department over the university’s diversity, equity and inclusion policies. 
  • Separately, the University of Pennsylvania reached a settlement with the administration in which they agreed to restore all Division I titles to cisgender female athletes who lost to transgender female athlete Lia Thomas and send personal apology letters to each of the cisgender swimmers. As part of the settlement, they have also agreed to only allow cisgender females to compete in female athletic programs.  
  • Early Thursday morning, the Supreme Court announced that it will hear two challenges to laws that ban bar transgender athletes from competing on teams consistent with their gender identities.  
• On Monday, the Trump administration unexpectedly froze over $5 billion of education funding for K–12 schools that was supposed to be distributed on July 1. The funding remains under review by the Department of Education, with no suggestion of how long the funds will be frozen, or if they will be released at all. The withheld funding supports programs that assist migrant children, improve teacher quality, help students learn English, provide academic support and enrichment, and offer after-school and summer learning opportunities, particularly for underserved and low-performing schools.  
  • The funding withheld makes up 16.5% of total federal K–12 funding in California and would have a significant impact on education for immigrant students and English language acquisition programs. 
• The president toured a new migrant detention center in Florida, nicknamed “Alligator Alcatraz.” The center is being built on an abandoned airstrip in the Everglades and is said to be able to hold 5,000 people and cost $450 million per year to operate.  
  • Protestors and immigrant-rights groups call the detention center—in which housing will mainly be tents—inhumane, citing the intense heat and humidity of the area, as well as evacuation concerns in hurricane season.  House Democrats have called for its closure before it officially opens, saying it is “morally reprehensible, inherently cruel, and starkly violates basic humanitarian standards.” 
• Following a complete cut of funding to GAVI, the Vaccine Alliance, by the Trump administration, the Gates Foundation pledged $1.6 billion over five years to support the organization that provides life-saving vaccines for children in developing countries. 

 

STATE & LOCAL NEWS

• A special election of the San Diego County Board of Supervisors was held on Tuesday to fill the spot vacated by Nora Vargas. While results will not be finalized for some time, Imperial Beach Mayor Paloma Aguirre held a sizeable lead when her opponent, Chula Vista Mayor John McCann, formally conceded on Wednesday afternoon. Results will continue to be updated at the County Registrar of Voters’ website. 
  • With Aguirre’s win, the Board of Supervisors will be complete for the first time since January, and the party balance will move from an even split to three Democrats and two Republicans.  
• The governor signed sweeping changes this week as part of the State budget negotiation. The budget trailer bills (legislative bills that amend or add details to an already approved budget) provide exemptions to the California Environmental Quality Act (CEQA) that require environmental impact studies for new development and allow individuals and groups to sue if they believe a study is inaccurate or not exhaustive enough.  
  • Housing built in and around existing development will no longer be subject to CEQA, as long as the development is under 20 acres. The policy may only be used for multi-family dwellings and includes a requirement to notify relevant tribal governments.  
  • In addition, nine other types of projects will be exempt from CEQA, including child care centers, health clinics, food banks, farmworker housing, broadband, wildfire prevention, water infrastructure, public parks or trails, and advanced manufacturing. 
  • There are a number of San Diego projects currently caught up in CEQA lawsuits, and experts are unsure whether this new law will affect lawsuits already in progress. It will, however, clear the way for many new housing projects in the future, as well as for tech manufacturing in the Salton Sea area. 
  • While this rollback will make affordable housing easier to build, many environmental groups are concerned about what it means for environmental justice priorities. 
• The federal administration pulled back 150 National Guard troops deployed to Los Angeles on Tuesday, allowing them to go back to their regular jobs as firefighters during peak wildfire season. Those remaining also include police and paramedics.  
  • The governor has stated that only 20% of the troops that remain have been given any work assignment, and that eight of the 14 National Guard teams normally fighting fires across the state and doing prevention work at this time of year have been “degraded” by being sent to LA. 

 

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: 

• Contribute to the San Diego Resilient Response Fund, which provides support to organizations adapting to circumstances caused by federal policy and funding shifts. Funds are available to consult experts, build collaborative efforts, or host strategic conversations. 
• Join the Coordinated Regional Response Collaborative, now with 26 members. This group of funders shares strategies, learns from one another about navigating uncertainty in the current landscape, and works together to maximize impact across the region. 
• Contact us about contributing to a soon-to-be-announced Bridge Fund, which will provide operating capital to organizations with guaranteed future funding, but work that has to happen now. 
• Prepare for advocacy and legal support. While private foundations have limits on lobbying, they can support legal challenges and advocacy efforts related to critical policy decisions affecting immigration, education, and civil rights. Philanthropy can amplify voices defending these rights. 
• Learn from and invest in community-led solutions. On July 9, join Catalyst of San Diego and Imperial Counties, Art Pharmacy, and San Ysidro Health for a live panel discussion on the power of social prescribing in adolescent mental health care. Attendees will hear directly from the leaders of this groundbreaking initiative and learn how cross-sector partnerships are fueling a movement to advance whole-person health in San Diego and beyond.  

 

RESOURCES

• Take an in-depth look at the effects the reconciliation bill could have on the philanthropic sector in this article from Council on Foundations. 
• Read United Philanthropy Forum’s statement on Senate passage of the reconciliation bill. In the words of Deborah Aubert Thomas, President & CEO of United Philanthropy Forum, “We are proud of the sector’s unified advocacy that helped secure major wins—but we unequivocally condemn the devastating cuts to core safety-net programs like Medicaid and SNAP.” 
• Learn about the asylum-seeker’s experience through stories and pictures from Tijuana and San Diego captured by Catalyst members during the May 2025 Do the Work trip. 

 

Talk to you next week,

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