Policy Briefing

Catalyst Weekly Policy Briefing Issue II: From Federal to State to Border

As we hear from friends and colleagues how new federal policies and executive orders impact them, Catalyst is here to help you understand how our region is faring. Please find the latest updates since our previous issue below.

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THE FACTS: Federal and State Funding, Plus Immigration Impacts

Federal funding freeze and executive orders:

  • Following the uncertainty caused by a federal funding freeze that was issued and rescinded, some organizations with active grants are currently locked out of the federal payment portal.
  • Those unable to access funds, including programs supported through the Environmental Protection Agency and the Departments of Agriculture and Energy, are now experiencing cash flow issues that put into question their staffing, client services, vendor relations, and planning timelines.
  • Numerous federally funded programs were subject to stop-work orders. In some cases, a judge ruled that the programs could continue, but future funding remains uncertain.
  • Organizations are being asked to submit materials for federally-funded programs and stop delivering any element that does not comply with executive orders, hampering work that references racial equity, gender issues, and more.

Federal workforce reduction:

  • The administration issued a hiring freeze, and job offers not yet finalized have been rescinded.
  • More than two million federal employees received a “Fork in the Road” email offering deferred resignation, in which they would resign now and be paid through September.
  • A federal judge postponed the response deadline until Monday afternoon after hearing arguments in a lawsuit brought by federal employee unions.
  • This affects more than 60,000 jobs in San Diego and Imperial Counties.
  • In addition to the potential loss of employment, reduced capacity in agencies could result in slower or less robust interactions on critical programs.

The State budget:

  • Governor Newsom’s proposed $493 billion budget for 2025-2026 projects higher revenues than expected and is roughly balanced ($353M surplus).
  • Federal funds contribute about one-third of the State budget ($170 billion) to programs like CalWORKS, CalFresh, SSI, MediCal, EITC and Child Tax Credit.
  • The budget, similar to prior years, allocates 41% to health and human services, which is also the area most reliant on federal funds.
  • Proposed federal budget changes could have significant impacts. For example, federally-funded MediCal insures one-third of Californians.
  • Key concerns include executive orders impacting funding and the possibility that disaster relief will be withheld or conditioned on State policy changes.

Immigration impacts in our region:

  • The need for support to immigrant communities has increased exponentially.
  • Nonprofit organizations and community groups in the United States and Mexico are providing legal services, community support, and humanitarian aid to thousands of people while also advocating for policy and budget decisions that rewrite a sensible, humane border story.
  • On February 5, Catalyst hosted a briefing with several local leaders to highlight ways our region is experiencing dramatic shifts in policy and enforcement activity in real time. Read key updates and takeaways on where philanthropy can make a difference here.

 

THE TAKEAWAYS: What Philanthropy Can Do
  • Reach out to your current grantees and find out what they need. Convert existing grants to unrestricted, flexible funding, or deploy new funds.
  • Consider a (forgivable) bridge loan, acknowledging that nonprofits whose federal funds are frozen may not feel confident that they’ll have access to those funds in the future.
  • Join us at Foundations on the Hill on February 23-26, to meet with other philanthropic and nonprofit organizations and join staff-supported meetings with federal legislators.

 

ADDITIONAL RESOURCES: How to Stay Engaged
  • If you are a member, register for Catalyst’s Advocacy 101 session on March 11 session to learn how advocacy to talk about the change you want to see, as well as how to navigate legal, strategic, and governance considerations
  • Join us for Sacramento Day of Advocacy on April 2-3 or in Washington DC on February 23-26 for Foundations on the Hill
  • Get more information on an upcoming funder visit to the border. Do the Work: Border Tour will take you through San Diego and Tijuana to have conversations with the community organizations and migrants who are living this every day.
  • Attend the Protecting Race-Explicit Programming webinar hosted by AAPIP to learn about the state of the law and how litigation has been used successfully and unsuccessfully to expand or constrain civil rights as well as how foundations and organizations can assess their risk related to race-explicit grantmaking.
  • Access the resource page put together by the California Health Care Foundation to help understand and advocate for MediCal, a federally-funded program that provides health insurance for one-third of Californians.

 

Thank you all for all that you do. We would love to hear from you about your evolving efforts, please don’t hesitate to reach out to our staff to share your story. Funders are invited to join us next Wednesday for a virtual Open Space on Navigating Policy Shifts to compare notes with your peers.