If you’re looking for a case study on how quickly fortunes can turn for climate nonprofits, look no further than Rewiring America. The group once stood as a rising star in clean energy advocacy, expected to receive nearly half a billion dollars under the Biden administration’s climate push. But within just two years, that dream was stalled, their funding frozen, and layoffs became a harsh reality.
Whiplash
Rewiring America was founded in 2020, focused on helping Americans switch from fossil fuel-powered home appliances to electric alternatives. Think heat pumps instead of gas furnaces — a key part of Biden’s Inflation Reduction Act (IRA). By 2023, the group was set to receive $500 million as part of a $27 billion clean energy fund.
Fast forward to 2024, and that funding was blocked. The EPA pulled $20 billion in grants citing concerns around integrity, misuse, and poor alignment with agency goals. Add to that an FBI investigation and frozen bank accounts, and it’s easy to see why climate nonprofits are feeling like the ground is shifting under their feet.
Fallout
That funding freeze forced Rewiring America to lay off 36 employees — more than a quarter of its team. They had to pull back from federal-level initiatives and refocus on regional projects, where funding and political will seemed more secure.
They’re not alone. RMI, another major climate nonprofit, let go of around 10% of its workforce in May. The Deep South Center for Environmental Justice had to lay off staff after losing a $13 million grant. These aren’t just budget cuts — they’re setbacks that shake the core mission of these organizations.
Dependence
Here’s the thing: many of these nonprofits rely heavily on federal dollars. When the IRA was passed, it promised nearly $105 billion for climate initiatives. Over half of that — around $54 billion — was earmarked for nonprofits. So when grants get canceled, it doesn’t just hurt; it threatens survival.
Take a look at this:
| Organization | Grant Lost | Layoffs or Impact |
|---|---|---|
| Rewiring America | ~$500M (planned) | 36 staff laid off |
| Deep South Center for EJ | $13M | 8 staff laid off |
| RMI | $7.5M | ~10% of staff laid off |
| Climate United Fund | Unknown | 10 of 35 staff lost |
Reactions
Power Forward Communities, a coalition that included Rewiring America, is now suing Citibank for freezing accounts. Two major members — Habitat for Humanity and United Way — have left the group entirely.
Meanwhile, foundations like Kresge and MacArthur are stepping in, but even they admit they can’t fill the gap left by a retreating federal government. Philanthropies are trying — loosening restrictions, boosting giving, or shifting toward legal defense strategies — but their pockets aren’t deep enough for long-term solutions.
Resilience
Still, not all groups are sinking. Stand.earth, for example, has stayed afloat by never depending on government or corporate funds. Their wide donor base and diversified revenue model have insulated them from the political chaos. It’s a model more nonprofits might need to consider.
Others, like the Deep South Center, are scaling back their ambitious plans to expand outreach. What once was a goal to work with 200 groups in 14 states is now back to fewer than 20 partners. The loss of funding means more calls unanswered and communities left hanging.
At the core of this struggle is a hard truth: nonprofits are on the front lines of the energy transition. They’re not just advocates — they’re service providers, educators, and connectors in the push toward clean energy. Without stable funding, the larger climate goals of the nation may falter.
The federal funding rollercoaster has left climate nonprofits in a tough spot. Some are adapting and pivoting to local work, while others are scaling down, laying off staff, or even closing doors. The stakes are high — not just for these organizations, but for communities counting on them to lead the energy transition. Unless alternative funding models or political stability return soon, the path to a cleaner future might slow down — just when we need it to accelerate.
FAQs
Why did Rewiring America lose its funding?
The EPA froze funds over concerns with integrity and oversight.
How many staff did Rewiring America lay off?
They laid off 36 employees, over a quarter of their team.
What is the IRA’s role in nonprofit funding?
It provided up to $54 billion in climate grants for nonprofits.
Which groups are suing Citibank?
Power Forward Communities and Climate United Fund are suing.
Can philanthropy replace federal funding?
Foundations say they can’t fully make up for the shortfall.
