For nonprofits in McDowell County, West Virginia, the federal cuts in the One Big Beautiful Bill Act threaten a lifeline.
Many of McDowell’s 17,000 residents rely on federal programs and the nonprofits they fund to get by. The county’s tax base and population have significantly declined since 1950, when McDowell was the top coal-producing county in the nation and had about 100,000 residents.
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Now, more than half the children in the county receive federal Children’s Health Insurance Program benefits, and about one-third of seniors are on Medicaid, the federal health insurance program for the poor. Decades after the Kennedy administration made the county a first test of food stamps, nearly half the county’s residents receive supplemental nutrition assistance, or SNAP, the Food Stamp Program’s successor.
The strains created by new eligibility restrictions on SNAP as a result of the passage of President Trump’s domestic policy bill will be especially dire in places like McDowell County, where more than one-third of the population lives below the federal poverty line, said Rosemary Ketchum, executive director of the West Virginia Nonprofit Association.
“These federal cuts are starving people,” she said.
Since the interruption in federal support tied to President Trump’s January executive orders barring grants related to “gender ideology”; diversity, equity, and inclusion; and environmental justice, Ketchum said many of the 9,000 or so nonprofits in her state have laid off staff. Others, she said, are dipping into whatever reserves they have to pay their employees.
Those reserves are slim, if they exist at all. Taken together, the seven nonprofits that receive federal grants in McDowell County run on a 3 percent operating margin, according to data tabulated by the Urban Institute’s National Center for Charitable Statistics. If all federal support disappeared, the center found, all the county’s nonprofits would be at risk of going under unless other funding was provided.
No Plan B
In a poor state like West Virginia, which is already facing a budget deficit and lacks the legions of philanthropic donors who got rich on Wall Street or in Silicon Valley, nonprofits don’t have a plan B, said Kathy Gentry, executive director of Safe Housing and Economic Development, or SHED, a McDowell nonprofit housing provider.
The nonprofit’s clients, many of whom are elderly or disabled, rely on U.S. Housing and Urban Development support to cover the rent at the 94 housing units SHED manages.
Gentry’s pay was temporarily cut for six weeks this spring because part of her salary comes from a HUD capacity-building grant that the administration deemed at cross-purposes with Trump’s anti-DEI policy agenda. Her full paycheck resumed, but Gentry worries further cuts will force her to lay off staff.
Already the nonprofit operates at a loss. In its 2023 tax filing, the most recent available, SHED’s $663,000 in expenses outstripped its revenue by nearly $200,000.
“We’re in a quandary here — all nonprofits are,” Gentry said. “Are we going to exist? Will we have to dissolve?”
Health care and internet access
Since 2015, Heidi Binko and her team at the Just Transition Fund have worked with economic development agencies and nonprofits in areas where the coal industry once flourished. That can mean helping a local organization identify or write a grant or provide a matching grant.
The fund was created by the Rockefeller Family Foundation and Appalachian Funders Network to help coal towns capture some of the dollars provided in the 2015 Clean Power Plan, or POWER Act, passed during the Obama administration. Since then, the fund says it has helped coal communities in West Virginia and throughout the nation secure more than $2 billion in federal grants.
Binko hopes the fund can continue to attract federal resources to towns with high poverty rates.
“There are still federal dollars available,” she said. “They haven’t all been zeroed out.”
The recently passed domestic policy bill, for instance, contains $50 billion in health care grants over 10 years for rural providers, though it is unclear whether that money will keep hospitals and clinics that rely on Medicaid dollars afloat.
Two hallmarks of the Biden administration’s infrastructure and stimulus acts — transitioning away from a carbon-based economy and providing federal resources among different populations equitably — are not a focus of the Trump plan. As a result, Binko fears recent progress will be dimmed.
For instance, Generation West Virginia, a Just Transition Fund grantee worked with McDowell County to apply for funds from the Biden administration’s Digital Equity Act to run an elementary and middle school digital literacy program. Programs under the act were terminated in May.
The cancellation of the Digital Equity Act is a setback for McDowell, where 20 percent of households don’t have a broadband internet connection, according to a Generation West Virginia report.
Clean water
Other, more basic infrastructure is lacking in the county. According to DigDeep, a nonprofit that assists with clean water access and wastewater systems and is primarily funded by private institutions, corporate partners and grassroots donations, there may be hundreds of people in the county without a dependable water supply. The exact number is unknown because information on whether existing water systems provide safe drinking water is not gathered by the U.S. Census.
DigDeep works with the McDowell Public Service District utility provider to identify residents who need a water hookup and helps secure grants from the U.S. Department of Agriculture’s rural development program to extend water trunk lines to hard-to-reach areas. In some cases, the nonprofit helps pay to connect the federally supported water lines directly to people’s homes. It is also helping to install wastewater treatment facilities to more than 400 residents who either have inadequate systems or flush waste into nearby creeks.
The water supply throughout the county is unreliable because of the area’s close historical ties to the rise and fall of the coal economy, said George McGraw, DigDeep’s chief executive.
When coal operations came to McDowell, businesses operated in a “closed loop” environment. Coal companies paid workers to build and work in the mines, they owned the houses where miners lived, and they built the water lines that served those houses, McGraw said.
When the coal industry began to peter out, companies exited the county, leaving behind an aging system of pipes and drains.
To secure water in the county today, hundreds of people fill plastic jugs from roadside springs or mine shafts, McGraw said. To get drinking water, they may use the bathroom in a store, a neighbor’s house, or a school.
DigDeep has several projects in the planning stages in McDowell. But the Trump USDA budget proposal would chop the rural water program by two-thirds, meaning some public works projects may never get completed. Someone else will have to foot the bill or the system will continue to crumble, leaving many people in McDowell County without a basic necessity.
“It’s not like the burden goes away,” McGraw said. “The burden just shifts, and utilities are forced to raise rates on customers, many of whom are below the poverty line.”
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Alex Daniels is a senior reporter at the Chronicle of Philanthropy, where you can read the full article. This article was provided to The Associated Press by the Chronicle of Philanthropy as part of a partnership to cover philanthropy and nonprofits supported by the Lilly Endowment. The Chronicle is solely responsible for the content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.