Struggling for support: Minnesota’s nonprofits serving communities of color react to funding loss

After President Donald Trump took office at the start of 2025, nonprofit leaders in Minnesota who work to support communities of color say they noticed an immediate shift.

Companies across the state and country rolled back efforts related to diversity, equity and inclusion (DEI) after Trump issued an executive order calling some of these efforts “illegal.” Grants that nonprofits expected to come through were taken away. Some had to lay off staff or take other measures to protect their finances.

Mary Anne Ligeralde Quiroz, the co-founder of Indigenous Roots Cultural Center in St. Paul, was expecting about $2 million in grants and contracts to come through. One grant was through the National Endowment for the Arts. Another was through Ramsey County. But she was notified that the money would not be awarded, with no explanation.

“For us, as a small nonprofit organization, that is a huge amount of money,” she said. Last year, the group’s budget was about $1.5 million.

Due to the funding loss, Quiroz said she had to stop paying off a loan to help cover building improvements. Quiroz said the lender allowed her to pause payments, which prevented her from having to lay off staff.

Quiroz is not alone.

The Minnesota Council of Nonprofits surveyed more than 300 nonprofits in 2025 that were facing funding challenges. The report found nearly half of those that responded said their organization had seen a decrease in government funding, and 35% saw a decrease in donations. Amid cuts to funding, 82% said they’ve seen increased business expenses.

The report does not break down nonprofits by those serving communities of color, but Nonoko Sato, president of the Minnesota Council of Nonprofits, said those nonprofits have been historically underfunded.

“Funding has been cut, or land stolen from them, or wealth being built off the backs of Black and brown people, this has happened before,” she said.

The Immigrant Law Center of Minnesota, which provides free legal services to low-income immigrants and refugees, was notified it would not receive payment for a grant from the federal government for services that help immigrants who have green cards work toward citizenship.

Executive Director Jennifer Stohl Powell said she received a notice from U.S. Citizenship and Immigration Services, the grant administrator, saying the program no longer reflected the department’s priorities.

The center was also poised to start a partnership with a local college to give students work experience interning for it. But that college suddenly pulled out.

“I think my bigger concern is, long term, can we sustain that level of support?” she said.

Marquita Stephens leads the Urban League Twin Cities, which faced substantial cuts to its housing program that helps Black residents work toward homeownership. The loss in $150,000 in funding administered by the Minnesota Department of Commerce caused the organization to lay off staff, leaving just a part-time worker and a contractor leading the housing program.

Antonio Williams, who leads TONE UP, which provides re-entry services for formerly incarcerated people, said foundations have been less willing to give grants. “​​We felt our normal funding flow jam up immediately,” he said.

Last year, Williams was able to raise about $500,000 in contracts and grants. He said he’s only been able to raise a fraction of that money.

Nonprofit leaders say they’re also facing an overall decline in people supporting work related to racial equity. Corporations like Target have rolled back DEI efforts, and some businesses scrubbed information about DEI initiatives from their websites.

At the Minnesota Alliance of Volunteer Advancement, executive director Niila Hebert lost a federal grant of about $400,000. The organization supports nonprofits through training and resources. She had to cut all of her staff, leaving her as the only person at the nonprofit, down from a staff of 10 in 2024.

She and other leaders, including Sarah Clyne, who previously led EquaSpace, a nonprofit coworking community, banded together to create the Matriarch Giving Circle. The coalition collects funds for nonprofits led by women of color, and has been a space for women leaders to support one another. So far, the group has raised about $2,000.

“We feel like it’s one strategy to address all of the challenging things that are happening,” Clyne said.

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