San Jose nonprofits threatened by federal funding cuts

Santa Clara County nonprofits serving the region’s vulnerable residents are facing funding cuts coming down from the Trump administration.

Among proposed cuts is the planned elimination of the $3.3 billion Community Development Block Grant program tied to the U.S. Department of Housing and Urban Development. San Jose distributes millions of dollars annually through the program to nonprofits implementing services that benefit low- and moderate-income residents with community development needs. Nonprofits facing potential negative impacts include the Law Foundation of Silicon Valley, The Health Trust and SOMOS Mayfair.

“The future of Community Development Block Grant funds for local nonprofits is unclear,” Jeff Scott, spokesperson for the housing department, told San José Spotlight. “The city of San Jose is monitoring the evolving nature of the situation and other matters regarding our relationship with the federal government.”

San Jose received almost $13 million in block grant funding for the 2024-25 fiscal year and $7.8 million for 2025-26. As of May 12, the remaining fund balance sits at $4.3 million. Scott said the city is focused on spending the already approved funds.

“As new restrictions and procedures are proposed, we are working across departments to understand the impact and implementation,” he said.

Law Foundation of Silicon Valley Chief Program Officer Cynthia Chagolla said they have relied on the block grant funds for more than a decade to support legal services provided to residents, including low-income renters. Organizations under the nonprofit’s umbrella including Asian Law Alliance, Project Sentinel and Senior Adult Legal Assistance will be hurt by a loss of funding.

“In terms of the funding that we get directly from the city of San Jose for housing work and legal services for low-income tenants — this (funding) is it,” Chagolla told San José Spotlight. “It’s really a safety net service for individuals who are either at risk of losing their housing or are experiencing some sort of discrimination, like for their disabilities, and are prevented from even getting housing.”

Kyra Kazantzis, CEO of the Silicon Valley Council of Nonprofits, said the federal administration is targeting cuts toward organizations providing services counter to President Donald Trump’s policies. This includes nonprofits focused on gender, culture and topics deemed “culture war” issues.

“The administration is hitting nonprofits in particular ways,” Kazantzis told San José Spotlight. “It’s impacting nonprofits that are serving folks without federal funding, as well as nonprofits that are funded by the federal government.”

Alexandra Urbanowski, CEO of SVCreates and a San José Spotlight columnist, said federal funding cuts have a cumulative impact that trickles down to state and local governments.
In a recent column, Urbanowski said the range of local organizations impacted by the federal retraction of existing grants includes Opera San Jose, TheatreWorks Silicon Valley, San Jose Jazz, Opera Cultura, CreaTV, San Jose Museum of Art, MACLA, San Jose Taiko and more.

“The policy changes create substantial turmoil and financial uncertainty —threatening the stability of a sector already traumatized by the effects of a range of presidential executive orders and current economic pressures,” she said.