In 1964, President Lyndon Johnson declared a “war on poverty” that included the provision of direct federal grants to nonprofits tasked with delivering education, health care, and other social services to marginalized communities. More than 60 years later, President Donald Trump appears to be dismantling much of that strategy, according to Claire Dunning, author of the book Nonprofit Neighborhoods: An Urban History of Inequality and the American State.
In her book, centered on Boston, Dunning charts how increased federal funding helped grow the sector and led many nonprofits to rely heavily on government money.
“More and more nonprofits started being founded and expanded in order to tap into those federal resources,” said Dunning, who teaches political and urban history at the University of Maryland. “This was how the federal government was going to start solving problems more directly.”
Yet in her book, Dunning questions whether federally supported nonprofits have succeeded or failed to meet the needs of low-income residents in Boston and other places. Her view is this funding has been neither a boon nor a disservice but part of a complicated power dynamic. Johnson’s push to fund neighborhood nonprofits “was a response to demands during the black freedom movement and other freedom movements of the 20th century for access and inclusion to the state — for recognition, for services, for help, and support,” she said. However, it turns out that grants are a poor means of delivering rights, and they cannot, alone, upend systemic socioeconomic and racial inequalities, she said.
“Who gets served by federal grants?” Dunning asked. “It’s typically vulnerable populations whose needs are not being met by the state in a more direct capacity — people of color, immigrants, the elderly, the young.”
As President Trump threatens to withdraw federal funds from some nonprofits, Dunning sees both a “civics lesson” about the nonprofit sector and an opportunity to discuss how to make it more sustainable and effective in the future. Perhaps returning some social service responsibilities to the government will be necessary for programs to get the kind of public support that exists for Social Security and Medicaid, Dunning suggested.
The Chronicle of Philanthropy spoke with Dunning about the history of federal funding to nonprofits and this moment of government defunding.
How have different presidential administrations approached federal funding to nonprofits?
Since Johnson’s dramatic expansion of federal grants, every administration has used nonprofit funding as a tool to signal their priorities and preferences, whether that’s through Nixon’s desire to shrink government — he dramatically consolidated the federal grant infrastructure from categorical grants to block grants — or the Reagan administration, which implemented deep budget cuts. More recently, President George W. Bush used partnerships with nonprofits through the funding of faith-based initiatives. He opened a new White House office that enabled faith groups to compete for and win federal grants, particularly around schooling, education, health, and reproductive health. The Obama administration’s Choice Neighborhoods, Promise Neighborhoods, the Clinton Empowerment Zone programs — every administration has used this tool as a way of signaling priorities. So there’s a degree to which the Trump administration is consistent in that regard. But Trump has deviated from the pattern in that — where previous administrations have focused on a program here or there — his administration is completely dismantling the federal grants infrastructure in everything from social services to advocacy to monitoring to research. This is being done at a far larger, far more aggressive, and far more punitive scale than previous administrations, which merely created new grant programs or sunsetted old ones.
What were the benefits of the federal government’s outsourcing of services to nonprofits?
Johnson’s strategy as part of the war on poverty was really strategic, really radical, and really innovative. The civil rights movement was calling out the inadequacies of government at every tier, at the local, state, and federal levels, which had been deeply exclusionary and discriminatory. Movement leaders were saying, “We in the nonprofit sector, we can do this better, and can do it in a way that’s more diverse, more participatory, more inclusive, more responsive, and using a particular set of strategies that we know our local neighborhoods need. We can do a better job than governments, which have been ignoring and, in fact, have been the source of harm for our populations.”
What we’re seeing now, in some ways, is a backlash — not only to whose needs are met through federally funded programs and provisions — but a sort of general surprise about how things are done. People don’t know that Meals on Wheels or after-school tutoring programs or affordable housing are enabled by public money flowing through the nonprofit sector.
In what ways are the current cuts to federal grants echoes of the past? In what ways are they different?
One of the things I write about in my book is that Black leaders, leaders of color, Latinx leaders, queer leaders have long known that grants are a tool of control — that what can be doled out can be extracted, that these are not relationships among equals, despite all of the talk about partnership. They’ve long felt and recognized that grants are a tool of discipline, of control, of surveillance. It’s largely a white professional class for whom this is now becoming more visible — that grants are a tool of power, of decision making. The grants retain, for the funder, the ability to set priorities, to deem which populations are worthy or not of support, of what strategies are seen as productive.
Given that the federal government has outsourced social services, especially in cities, to nonprofits for more than 60 years, and now an unknown amount of that money is frozen, what are we looking at? Could 2025 mark the end of nonprofit neighborhoods?
There are going to be layoffs, which we’ve already seen. There are going to be closures. There is going to be a lot of instability at the local level. Maybe we’ll see private philanthropy and donors step in, but probably not at the same scale. Private money cannot compensate fully for what the government provides. It’s one of the myths of the nonprofit charitable sector — the notion that it relies on private money when, really, public grants are essential. We may see more mutual aid. We’re going to see maybe some creativity, as people are trying to come up with alternate means of keeping organizations alive and services provided.
One of the things I’m curious about and am somewhat hopeful for is that this transformation prompts a larger conversation about whose needs are met by direct government provision and what public goods are delivered by public entities. I hope we have some conversations about what nonprofits can provide and what they’re good at, like being responsive to communities and validating the identities of different persons. But I hope we talk about the limitations of what nonprofits can do. A lot of the public problems that nonprofits have been tasked with addressing are far beyond the scale of a neighborhood-based group, such as racism, structural inequality, all sorts of issues that are best dealt with by policy and at the scale that government can operate. I think the question is: How can nonprofits mobilize and create demand — not just for their own entities but at a collective level —and what the role of government could or might be in the future?
What is your impression of the Trump administration’s approach to nonprofits?
I think the Trump administration has made it quite clear that they are using the federal grants infrastructure — and everything from research grants to service grants to data monitoring grants — to curtail federal civil rights protections. They are marshaling the whole government apparatus to make clear their hostility to those civil rights goals. President Johnson’s federal nonprofit grant program was a response to demands during the black freedom movement and other freedom movements of the 20th century for access and inclusion to the state, for recognition, for services, for help and support. So the Trump administration’s desire to roll back a lot of those gains, to roll back recognition, protections, and support for those populations, is quite deliberate.
This transcript has been edited for brevity and clarity.
