The financial fallout from shifting federal priorities under the Trump administration hit home for some nonprofits earlier this month. Among them was Memphis’ Blues City Cultural Center (BCCC), a staple in the arts community for more than 40 years, which received notice that its grant from the National Endowment for the Humanities (NEH) had been terminated.
A letter issued to BCCC Executive Director Ayana C. Williams on April 2 cited President Donald Trump’s Feb. 19 executive order, “Commencing the Reduction of the Federal Bureaucracy,” as the basis for an “urgent priority” to eliminate non-statutorily required activities and functions. The NEH stated the decision was necessary “to safeguard the interests of the federal government, including its fiscal priorities.”
The Trump administration’s series of executive orders in early 2025 reprioritized how federal dollars are allocated to education, health and nonprofit initiatives and dismantled key DEI frameworks across federal agencies. The changes are triggering concerns across multiple sectors.
For BCCC, the abrupt cancellation of grant funding means the loss of $25,000 designated for its Storied Place project — an arts and history initiative centered on Orange Mound, the first neighborhood in the United States built by and for Black people.
“This isn’t just a budget cut — it’s a cultural shutdown,” said Williams. “The cancellation of funding for Blues City and other arts organizations counting on NEH funding means removing access to the arts — especially in schools, senior centers and neighborhoods where theater and other creative experiences aren’t convenient. Many people rely on us to bring the arts to their neighborhoods because art transforms lives.”
The organization’s slate of educational programming is rooted in local history, original works and visual storytelling. With the cancellation of funding, they are considering ways to continue planned activities.
“Our role is to amplify community voices through the arts,” she said. “Like other organizations impacted by federal funding shifts, we will have to lean more on community support, identify other revenue sources and be innovative.
“I also hope citizens will reach out to Congressional representatives and remind them not to minimize the importance of arts and culture to humanity when it comes to funding considerations.”
BCCC is just one of many Memphis nonprofits navigating the wave of financial uncertainty as changes in federal policy begin to take root. While some organizations have not yet received direct termination letters, many rely heavily on government-funded partners or programs for operational support.
“We began seeing a gradual reduction in indirect funding in late fall of 2024,” said Judy C. Martin, nurse practitioner and executive director of Alzheimer’s & Dementia Services of Memphis Inc., which provides therapeutic day care for individuals with memory loss — 90 percent of whom are Black.
“If this continues, we will have no choice but to raise prices, increasing the financial burden on caregivers — most of whom are already stretched thin,” Martin said.
Though the center receives no direct federal dollars, about half of its funding is tied to government programs such as Medicaid and agencies like the Department of Health and Human Services now under scrutiny or being scaled back in light of broader budget shifts.
“Challenges for Black families living with Alzheimer’s and dementia could be significantly impacted,” said Martin. “Most of these families require some type of governmental support for the therapeutic day care we provide.”
Habitat for Humanity of Greater Memphis, also in Memphis for more than 40 years, has helped low-income residents purchase their first homes and has provided repairs so seniors can remain in their homes. It is uncertain how potential pass-through funding changes will play out for the charity.
“We rarely receive direct federal funding,” said CEO Dwayne Spence, “but we are often a sub-recipient of pass-through funding administered by state and local governments and other organizations. Changes to those funding programs could affect our work in the future.”
Habitat for Humanity of Greater Memphis primarily relies on donations, grants and revenue from its ReStore, but rising building costs — driven in part by tariffs on materials — pose an increasing challenge. “The ever-changing government funding landscape has only strengthened our commitment to expanding our funding streams,” said Spence.
Spence says that increasing costs for building and repair supplies could affect their work in the future. In anticipation, their strategic plan includes strengthening their capacity to serve. “Like all nonprofits, we’re staying abreast of any changes and need support from across all sectors now.”
For the Man Up Teacher Fellowship, which funds tuition for aspiring teachers of color in Memphis, concerns about future funding are already beginning to surface.
“We were recently informed that nearly $750,000 in state funding may be cut from our budget request,” said CEO Patrick Washington. “If this decision is finalized, we will be forced to explore all options, including reducing the number of fellows we can accept this year.”
Washington said the consequences extend beyond classroom staffing. “This is about educational equity, public safety and the future of our schools. We are not just creating teachers — we are investing in Memphis.”
A 2023 report by the National Council of Nonprofits revealed that nearly one in five nonprofit dollars nationwide comes from government sources. For many Black-led and Black-serving organizations in Memphis, that dependency is even greater when accounting for indirect support via local partnerships and grant programs.
Nonprofit leaders across the city are rallying to increase private fundraising and foundation support but agree the stakes are high.
“Relying on government funding is becoming more unpredictable,” said Martin. “We’re adapting, but policymakers must see the real-life consequences of these decisions.”
Despite the uncertainty, nonprofit leaders remain committed to serving the Memphis community. But with each letter like the one BCCC received, the risk of fundamental changes to the services nonprofits provide grows closer to reality. Mitigating that risk, they say, will require increased private-sector support and innovative funding strategies — or simply a reversal of the federal administration’s current viewpoint on priorities.
