- Welcome to "American Black Journal!"

I'm Stephen Henderson, your host.

Federal funding cuts that began in January are now starting to have an impact on the programs, services, and staff of nonprofits here in Michigan.

And they are causing a lot of uncertainty about the future.

In order to help fill the funding gaps, the McGregor Fund has decided to double its payout rate to the foundation's nonprofit partners over the next two years.

Joining me now are McGregor Fund President, Kate Levin Markel and Portia Robeson, she is the CEO of Focus: HOPE.

Welcome to "American Black Journal."

I've wanted for a while to have this conversation and I think now that we are, you know, well into 2025, hey, we can assess what's actually happening, what the impact of all this change in Washington is having on people here.

Kate, I'm gonna start with you.

McGregor funds an awful lot of the organizations that are targets of some of these cuts in Washington.

Let's start just with what you hear and see from your grantees about what this means.

- Thank you Stephen, it's great to be here.

First, I like to think about how there are different things happening at once, and different partners are experiencing these different dynamics.

So the first thing that happened was, there were freezes on money owed- - [Stephen] Right, that had already been allocated.

- That had already been allocated and put into contract and spent because a lot of that funding gets paid by the federal government to organizations on a reimbursement basis.

- That's right.

- So there were just refusals to make good on payments that were frankly, for the most part, illegal, because they'd been appropriated by the Congress.

So those fights, because there have been pushbacks, are working their way through the courts.

So some of that money's freeing up, but in the meantime, there's a starvation effect on organizations.

Then there were different attempts to cut off funding more, a little bit more in line with what we would consider normal.

And then of course we have coming soon at us, future cuts that are going to come out of this congressional budgeting process.

So it's an enormous, complex mix of things, and I'm sure Portia will really be able to help us understand those dynamics as the leader of an organization that received so many different types of funding.

And, but before I turn it over to her, and I do wanna hear, I'll just say this has touched people providing housing, people providing free and emergency food, people providing supports for people to get to work, people providing legal services, people supporting survivors of domestic violence.

There are many examples, sadly, where this has really affected the whole social safety net.

- The social safety net, yeah.

- Across the board.

- And that's most of, or a lot of the work that you're doing.

That's why you're seeing this as closely as you are.

- Absolutely.

- Yeah.

Portia, Focus: HOPE, of course, you are part of that social safety net in a couple of different ways.

But talk about the relationship between the services you provide and the federal funding you get and what happens when that funding is in jeopardy.

- So, as Kate mentioned, the federal freeze on reimbursement dollars was the first, I guess, attack, so to speak.

You know, a Tuesday afternoon, we get word that the dollars had been frozen.

I immediately get on a call with about 75 to 100 other providers of Head Start and Early Head Start, which is one of the components of what Focus: HOPE does.

When I tell you there were literal tears being shed while we were on our Zoom call, because people in much smaller organizations were looking at having to close by the end of the day and layoff people.

Focus: HOPE has about 107 staff members in our early learning program that would have to have been laid off within two to three days, maybe over the weekend, maybe I would have four days to tell people what was going on.

But otherwise, we were looking at having to close that portion of Focus: HOPE.

We then got exempted out, so it's a roller coaster of a day in terms of emotions and what you're thinking you might have to do.

There was a moment when I closed my door and just sort of cried for a moment and then open the door back to try to figure out what to do next.

And so for that period of time, we were exempted out of the freeze.

And then subsequently those freezes were lifted for our time being.

But now we're in the situation where we have a grant application for Head Start and Early Head Start, and we've not heard whether or not we're getting it or not.

So currently we're operating until July 31st, but we don't know quite yet what's gonna happen after that.

The same was true for our senior food program, our commodity supplemental food program.

We were unsure, we got in the extension of the 2023-24, 24-25 budget, we got extended.

So we knew we were gonna be funded there through September.

We now are seeing that there was some money reintroduced into this new budget that's coming along, because there was a point where it was zeroed out.

There was no commodity supplemental food program.

So 43,000 seniors in nine counties in Michigan that are fed by Focus: HOPE each month, no food.

- You don't know.

- Right.

- You don't know what the future is.

Of course, if you talk to the folks in Washington who are doing this, they say, "Well, we have this tremendous spending problem in government.

We overspend terribly and we have to cut back."

And I keep hearing also, "Other people can do this," right?

"Other people than government, other sources than government can provide these services and they will if we pull back."

Is that a reasonable way to think about how this all works?

- No.

- Can we filled gap?

- No.

- No.

Why?

- Well, if you think about it, the government support for all of these critical functions is so large, that individuals and foundations just don't have enough funding to pay for it without a major risk redistribution of wealth in this country, or the largesse of the people with the most money.

Now, the reason these cuts are being made is to pay for tax cuts, which very disproportionately help high-earning and high-asset folks.

So we can pay for those services, but we can't pay for them and then reduce the tax revenue coming in.

So this is a values decision.

This is not just fiscal prudence.

This is a values decision and the way in which it's being done is not the traditional democratic process that we all deserve.

- Yeah.

Yeah.

So, let's talk about the effect of McGregor doubling what it is gonna make available to grantees over the next two years.

What effect might that have?

And what's the strategy, I guess, there, in terms of how it fits in with the cuts that people are gonna be facing?

- I am really pleased to have an opportunity to talk about that.

But before I start, I'd like to ask you, Portia, what is your annual budget for the most recent year?

- About 39, $40 million.

So there's no way that we could go out and find a foundation that could supplement that or that could continue funding us at that level in order to do the work that we do.

And I was at a discussion and somebody, I think it might have been Wendy Jackson from Kresge said, "We can go for about 72 days helping out a nonprofit and then we're out.

Like, we can't do it anymore."

So there are no long-term solutions outside of the federal government continuing to fund some of these programs.

And I think what ultimately becomes the issue is that there are real people on the other ends of this.

This is not some obscure thing that we just want to do.

This is people who, again, throughout nine counties in southeast Michigan, need our food every month, right?

These are seniors who are food insecure.

These are families who rely on Early Head Start, Head Start programs and not just in urban communities, 'cause I think sometimes the language becomes what happens in Detroit, you know, Head Start is a vital part of rural communities.

Like, there are no other options in those communities.

And so one of the things I've been talking about with a lot of our employer partners is, I can give you the best employee in the world and they want to have that job, but they probably have three days of finding somebody to stand in the gap of a Head Start or Early Head Start program.

I always say, "I'm never gonna encourage a parent to leave a 10-year-old at home with a 4-year-old.

So that they can go to work."

That's just not something I'm willing to do, because we know how dangerous that is.

So we need programs like Head Start and Early Head Start, so that this workforce that the government talks about wanting to create.

This, you know, "Everybody's gonna come back to these American jobs!"

Yeah, from where if they don't have childcare?

- Yeah.

So 39, $40 million a year just for Focus: HOPE.

- Right!

- Compare that to how much- - Exactly right!

- How much does McGregor grant to organizations overall?

- In a typical year, we grant $9 million.

- Right, so not even close to just what one organization needs.

- Exactly, exactly.

And so I'd love to answer the questions, 'cause we really believe in transparency and so we doubled our commitment of funding back in March when it was clear what was happening in the community.

We had a meeting with our board and our team and we said, "We just have to do more than we traditionally do."

So, historically, we've granted out about 5%, maybe five and a half percent of our endowment value every year.

So that endowment value fluctuates with investment markets.

But this is not unusual for philanthropy that's set up to last in perpetuity.

But we just said, "We know we can't make up the difference.

But that doesn't take us off the hook from doing everything we can."

We all need to pitch in and do what we can.

A lot of us need to advocate, a lot of us need to step up other ways of supporting community.

And as a funding organization, our job is to dig deeper and just get more money out.

So we feel that clearly, and everyone was in clear agreement around it.

And so we're doing our best.

We can't sit back just because, "Oh, we can't fill the gaps" or "Oh, we can't figure out how to give more money out quickly and perfectly."

We're doing our best.

We're starting with our current partners, trying to identify immediate cash needs, where even buying a few weeks or a few months might keep people in housing, might keep people fed.

More importantly for the long run, well, I shouldn't say more importantly, but like keep people employed in those jobs.

Because if you have to lay off your team, you just can't get them back two weeks later when the funding comes back, people have had to move on and support themselves.

So we can't afford to let people suffer and we can't afford an erosion of our nonprofit safety net, which is what is at stake as you explained.

So, we have a lot of different things we're trying to do.

I'm happy to give more examples or another conversation.

- No, we've only got about 30 seconds left and I, of course, we're gonna have you guys back at some point to talk more about where we are, 'cause this is not ending.

Just quickly, how big a threat is it that Focus: HOPE would have to stop these services If you don't- - Oh, it's huge.

I mean, I talked about the 107 employees, but there are 300 families that will be affected immediately if we have to shut our doors, if we, you know, we have to cut off the Early Head Start and Head Start program.

So it's not, you know, it's a huge community of folks that are looking for places that are safe, that are educational based to put their children every day.

It's what we should be providing for them, right?

And so, yeah, I think about our staff, but I also think about those families who are now thrust into a community that they have no safety net around their children.

- Yeah.

Okay, great to have both of you here.

We will be following up later as well to find out where all this goes.

- Thank you.

- Thanks for having us.