What's at stake?
Local cities, nonprofits and everyday people rely on federal grants used to fund everything from housing and local infrastructure to support for youth trafficking victims and rental assistance. Now, that’s all hanging in the balance as President Donald Trump tries to use his crusade against DEI to strip local governments of federal funding.
After more than a month’s worth of uncompensated work, and an idle request for reimbursement to the City of Fresno, Christa Wiens began to worry.
The executive director got back in touch with city staff, trying to figure out when her nonprofit, the Central Valley Justice Coalition, could expect a reimbursement for 1-on-1 support and counseling for youth trafficking victims, provided in July and part of August.
On Aug. 21, she heard back from her city contact, who told her that funding was no longer guaranteed through the federal Community Development Block Grant program.
“I was told to pause (services), and that was the first I’d heard of any kind of concern that funding would not become available,” Wiens told Fresnoland, adding that the federal CDBG grant program provides 40% of her nonprofit’s approximately $400,000 budget.
Wiens and the Central Valley Justice Coalition aren’t the only ones in a tough spot in Fresno. At least six other nonprofits depended on the federal CDBG grant program for funding, which is routed through the City of Fresno as a pass-through entity.
The City of Fresno recently came under the scrutiny of the Trump administration and its crusade against funding anything remotely associated with diversity, equity and inclusion (DEI) programs.
The same week Wiens learned CDBG funding could be on ice, the U.S. Department of Housing and Urban Development notified city officials they needed to purge a city plan of all references to equity, environmental justice and gender.
If the language wasn’t removed, the federal agency would cut off CDBG funding to the City of Fresno. Part of the demand was to comply with conditions set by President Donald Trump’s executive orders.
The next day on Aug. 20, the City of Fresno, along with six other local agencies, sued the federal government, challenging the constitutionality of the Trump administration using executive orders to set new conditions on federal grants already approved by Congress.
The judge presiding over the case issued a 28-day temporary restraining order last week, hitting pause on millions in federal funding getting yanked from local jurisdictions involved in the lawsuit.
But in the haze of complicated lawsuit filings, a blatantly partisan fight and millions in federal funding for infrastructure and airports in jeopardy, it’s easy to lose track of the real people impacted by federal funding cuts, Wiens told Fresnoland.
For the Central Valley Justice Coalition, that means survivors of youth trafficking are at stake. The Coalition specifically provides 1-on-1 guidance to children and teenagers, to support them in obtaining an education and connecting them with services they need.
“We have some that we have helped complete high school,” Wiens told Fresnoland. “We have some that we have helped write resumes and get jobs — others that are looking to enlist in the military. Really just moving them forward towards their own personal goals.”
On any given day, the Central Valley Justice Coalition interacts with at least several individuals in need of support, she said. That kind of on-the-ground impact is very different from tens of millions for a new air traffic control tower, among the number of expensive projects largely reliant on federal funding.
“It’s hard to just say we can’t really be there for you anymore,” Wiens said, thinking about what the future could look like without CDBG funding. Wiens said the Coalition is trying to fundraise from the local Fresno community to fill their funding gap.
It’s unclear when a definitive decision will be made in the lawsuit over federal funding. The judge presiding over the case is expected to make another ruling in late September after legal arguments in court. However, there’s a likelihood the case could be appealed and even head to the Supreme Court.
That could take months, and local organizations have to decide whether to turn away from work they’ve been doing for years in the absence of funding.
At least seven local organizations could miss out on CDBG funding
The City of Fresno was expecting to receive at least $7.1 million in CDBG funds from the federal government, of which $1.2 million were slated for local nonprofit organizations. That includes the following:
- Centro La Familia ($50,000)
- Boys and Girls Clubs of Fresno County ($199,942)
- Central Valley Justice Coalition ($162,139)
- Chinatown Fresno ($40,000)
- Highway City Community Development Corporation ($23,057)
- Poverello House ($350,000)
- Self-Help Enterprises ($400,000)
City of Fresno spokesperson Sontaya Rose said the above nonprofit organizations had pending contracts, which were put on hold ever since the lawsuit.
“To be clear, agreements with grantees for these funds have not yet been executed, and are pending resolution of the City’s litigation and an approved Consolidated Plan,” Rose said via email. “Therefore, funds have not been pulled – but planned awards may be at risk.”
The remaining portion of the CDBG funds, about $5.9 million, are funds the City of Fresno was planning on using for everything from program funding to infrastructure improvements.
Rose added that more than $2 million in funding from other HUD programs may also be at risk:
- $1.6 million from the federal Housing Opportunities for Persons with AIDS (HOPWA) program, which provides funding to local governments based on their local population of people with HIV/AIDS. The money can be used for “housing, social services, program planning, and development costs.”
- About $600,000 from the federal HOME program, meant to go toward creating affordable housing for low-income households.
- Another $600,000 from the Emergency Solutions Grants (ESG) grant program, which can be used to help unhoused people obtain permanent housing.
Legal arguments to take place late September
When Judge Richard Seeborg granted a temporary win for Fresno, that’s all it was — temporary. When ruling from the bench on Aug. 26, he did, however, make note of how the attorneys for the City of Fresno and the six other local jurisdictions showed “a likelihood of success on the merits,” — a good early sign for the plaintiffs in the case.
A litany of litigation has been brought against President Donald Trump ever since he began his term and issued a number of executive orders. Some of those executive orders are the basis of which federal agencies are using to deny federal funding to local jurisdictions.
However, a key aspect of the Trump administration’s defense in court is that federal funds are not at stake, and even if they were, yanking them wouldn’t cause irreparable harm.
In an August court filing, the Trump administration’s defense wrote the following: “No Plaintiff faces an immediate threat of having its federal funding terminated as a result of the grant conditions at issue in this case or that any impending voluntary choice to accept such funding will cause irreparable harm during the pendency of this lawsuit.”
However, attorneys for the plaintiffs strongly disagree, citing guidance from at least three top Trump administration officials earlier this year who all threatened to pull funding from federal grant recipients. In an April letter from Transportation Secretary Sean Duffy, he warned recipients against having policies or practices “designed to achieve so-called ‘diversity, equity, and inclusion,’ or ‘DEI,’ goals.”
In a separate letter from May, Anthony Archeval, the acting director of the U.S. Department of Health and Human Services issued a letter to medical schools explaining how any institution with affirmative action policies would be violating the current interpretation of federal law under President Trump.
Archeval not only outlined how individuals could file a complaint with his office over alleged affirmative action programs, he also explained that a medical school could be stripped of federal funding if found to be violating the current interpretation of federal law, especially in the wake of a 2023 Supreme Court ruling on affirmative action.
In a June letter from HUD General Deputy Assistant Secretary Claudette Fernandez, she warned CDBG grant recipients to ensure they do not use funds to do anything that could violate Trump’s executive orders, including to “promote ‘gender ideology,’” or to “fund or promote elective abortions.”
Attorneys for Fresno and the other local jurisdictions maintain that federal funding is threatened — and that the evidence is not just in the letters sent out by various federal agencies, it’s also proven by action taken against the City of Fresno.
On Aug. 22, the City of Fresno was notified that its plan for how to use CDBG funding was disapproved by HUD. It’s unclear whether that funding could be reinstated, as various judges have ruled in different ways over the past few months.
Back in July, a federal judge threw out the Trump administration’s lawsuit against the State of Illinois and the City of Chicago over their refusal to aid in immigration enforcement. Part of the Trump administration’s tactic was to withhold federal funding to states and cities for not aiding immigration enforcement.
But just yesterday, a federal appeals court ruled in favor of Trump pulling $16 billion in federal grants from a number of nonprofits focused on fighting climate change. The appeals court ruling said the case should’ve been argued in a different type of federal court — which touches on a procedural aspect of the lawsuit, not the substance of the legal arguments itself.
The next hearing in Fresno’s lawsuit against the federal government is Sept. 23, during which both sides will get into the actual substance of their legal arguments.
That includes debate over whether Trump can attach conditions on federal grant funds without congressional approval.
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