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Defunding Diversity: What Trump’s DEI Executive Orders Mean for Michigan’s Nonprofits

Since beginning his second term on January 20, 2025, President Trump has signed 210 executive orders (EOs).[1] While the EOs have varying targets and apply to a span of industries, one overarching goal has been to dismantle diversity, equity, and inclusion (DEI) initiatives. From altering hiring practices to canceling programs that benefit low-income individuals, people of color, and other disadvantaged groups, these EOs have forced large corporations, law firms, and universities to make changes.[2] But these attempts to eliminate DEI efforts have had harmful effects on small-to-medium-sized nonprofits too. Most nonprofits rely on federal funding to operate, and many others exist exclusively to promote DEI, leaving them especially vulnerable to these attacks on DEI.[3] This blog post discusses the negative repercussions of these federal funding cuts on Michigan-based nonprofits and briefly describes some strategies these organizations can implement to navigate these challenges.

            Two EOs that have had far-reaching impacts on nonprofits are titled “Ending Radical and Wasteful Government DEI Programs and Preferencing” and “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Together, they aim to eliminate DEI throughout the federal government.[4] The director of the Office of Personnel and Management, with help from the Attorney General, has been carrying out this order to cancel federal funding for organizations that employ DEI initiatives. More specifically, these EOs have, among other things, canceled DEI programs, postponed federal grants that go to organizations that support DEI efforts, removed DEI positions and committees, and terminated federal contractors who provide DEI training.[5]

            These EOs have affected nonprofits, both in Michigan and nationwide, in a few primary ways. Most notably, the federal government’s attack on DEI initiatives has threatened the federal funding that many nonprofits rely on. The affected funding includes direct federal grants as well as discretionary contracts and other agency-administered funding. About 30% of nonprofits nationwide receive federal grants, and out of that 30%, about a third rely on that funding to cover over 50% of their costs.[6]

In Michigan, 27% of nonprofits[7] (about 100,000) receive grants directly from the federal government or from pass-through entities.[8] This means that the federal funding freezes would affect about 16,000 nonprofits in Michigan.[9] The EOs target organizations that employ general DEI initiatives, but this has included ones that focus mostly on inclusion as well.[10] As such, the nonprofits that have been most at risk of losing federal funding are ones that support vulnerable groups such as children, immigrants, and veterans as well as victims of domestic violence, human trafficking, and sexual assault. For Ozone House—a Ypsilanti nonprofit that helps local houseless children and families—federal funding accounts for 30% of its annual budget.[11] Ozone House’s Executive Director has expressed concern about the uncertainty and potential significant effects resulting from these funding cuts. The Accounting Aid Society is a nonprofit that helped over 20,000 low-income Detroiters fill out their tax returns last year.[12] About one-third of this organization’s revenue comes from federal funding.[13]

The nonprofits experiencing fiscal uncertainty due to the EOs also include food programs and childhood education initiatives. Officials of Head Start—a Michigan program that supports childhood education, health, and nutrition in low-income communities—found themselves locked out of the organization’s payment management system soon after the EOs were signed.[14] Food banks and pantries have faced drastic shortages as well. The Food Bank Council of Michigan announced that financial limitations are preventing almost $3.7 million worth of essential food from reaching food insecure Michiganders.[15] Many programs established during COVID to combat food insecurity in Michigan are also being canceled entirely.[16]



These funding cancellations and delays are forcing these organizations to make difficult decisions. The Accounting Aid Society is planning on reducing hours and opening fewer locations in the coming year.[1] Head Start decided to lay off all staff for one-day while their payment issues were resolved. The Food Bank Council of Michigan advised food banks across the state to pause local food purchasing for the remainder of 2025.[2] Overall, nonprofits both nationwide and in Michigan are scrambling to adapt to the ever-changing federal funding freezes. One Michigan nonprofit CEO stated that “this isn’t just a funding issue, it’s a workforce issue, a public health issue and a future of Michigan issue.”[3]

But there are resources to help Michigan nonprofits navigate these uncertainties. The National Council of Nonprofits has a detailed FAQ that conveys important information for nonprofits regarding the federal funding freezes.[4] The Michigan Nonprofit Association also has sources that provide useful guidance, including an overview of the EOs currently in effect.[5] Overall, it is important for nonprofits to be informed about how policies will affect them and how they might have to respond.

By Emma Sand

[1] Id.

[2] Sherri Welch, Michigan food and service nonprofits scramble as federal funding delays threaten essential services, MICHIGAN NONPROFIT ASSOCIATION, https://www.mnaonline.org/about/newsroom/2025/03/07/crains-detroit-michigan-food-and-service-nonprofits-scramble-as-federal-funding-delays-threaten.

[3] Id.

[5] MICHIGAN NONPROFIT ASSOCIATION, Federal EOs and Administrative Actions, https://www.mnaonline.org/policy/federal-2025-eos-and-administrative-actions.

[2] Sam Levine, US law firms quietly scrub DEI references from websites to appease Trump, THE GUARDIAN, (Apr. 11, 2025),  https://www.theguardian.com/us-news/2025/apr/11/law-firms-dei; Conor Murray & Molly Bohannon, IBM Reportedly Walks Back Diversity Policies, Citing ‘Inherent Tensions’: Here Are All The Companies Rolling Back DEI Programs, FORBES, (Apr. 11, 2025), https://www.forbes.com/sites/conormurray/2025/04/11/ibm-reportedly-walks-back-diversity-policies-citing-inherent-tensions-here-are-all-the-companies-rolling-back-dei-programs/; Santa J. Ono, https://president.umich.edu/news-communications/messages-to-the-community/evolving-our-approach-to-dei-and-moving-forward-together/.

[3] Anna Koob & Laura Tomasko, How Losing Government Funding Impacts Nonprofits, CANDID, (Mar. 18, 2025), https://candid.org/blogs/how-losing-government-funding-impacts-nonprofits-candid-urban-institute-data/.

[4] Exec. Order No. 14151, 3 C.F.R. 8339 (2025); Exec. Order No. 11246, 3 C.F.R. 8633 (2025).

[5] Executive Order: Ending Radical and Wasteful Government DEI Programs and Preferencing, HOLLAND & KNIGHT: EYES ON WASHINGTON BLOG, https://www.hklaw.com/en/insights/publications/2025/01/executive-order-ending-radical-and-wasteful-government-dei-programs.

[6] Cathleen Clerkin, Anna Koob & Laura Tomasko, How Many Nonprofits Rely on Government Grants?, CANDID, (Feb. 6, 2025),  https://candid.org/blogs/how-many-nonprofits-rely-on-government-grants-data/.

[7] Id.

[9] Id.

[10] Kyle Davidson, Michigan Nonprofits Share Impacts and Uncertainty Brought by Pause in Federal Funding, MICHIGAN ADVANCE, https://michiganadvance.com/2025/03/05/michigan-nonprofits-share-impacts-and-uncertainty-brought-by-pause-in-federal-funding/

[12] Id

[13] Id.

[14] Id.

[15] Id.

[16] Id.

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