Western Massachusetts, like much of the country, is still searching for ways to make up for lost federal dollars. The Trump Administration has revoked millions of dollars in grants over the last year and there has been a lingering impact of that lost funding.
When President Donald Trump took office for the second time at the start of 2025, he declared war on what he called 'waste, fraud, and abuse' endemic to the ways the federal government distributed money to states and institutions. That kicked off a wave of grant cancellations and funding revocations — some from the once Elon Musk-led 'Department of Governmental Efficiency' — and some from congressional clawbacks.
The nonprofit sector took a serious hit when federal dollars started to dry up. A 2025 report by the Urban Institute found that around a third of nonprofits across the country experienced some level of funding disruption in the first months of Trump's second term.
Aaron Vega is President and CEO of the Western Massachusetts Economic Development Council. He says nonprofits are a key player in the local economy, and that federal cuts create a ripple effect throughout the region.
"The nonprofit sector in western Mass. is a huge sector for employment and of course support systems for those people most in need. When those cuts happen at the federal level — those are jobs being cut, directly," he said.
Vega said the chaotic nature of these funding cuts makes it difficult to assess the damage in western Massachusetts specifically. Officials estimate the entire state is on track to lose nearly $4 billion in federal funds. Those losses create a cascading effect — without proper resources, agencies dedicated to vulnerable populations have a harder time helping those people find a stable job, or housing.
"You start taking away those supports, we're gonna keep people in this sort of pool of disadvantaged employees who aren't able to leverage skills, who aren't able to get workforce programs or aren't able to get a job," he said. "And we're sort of keeping them in this space without giving them an opportunity to utilize transitional assistance to transition up."
Vega said while there are some bad actors who may misuse federal money, he thinks the Trump administration's broad approach is "throwing out the baby with the bathwater."
"These cuts are sort of like, big swath, taking the machete, you know, to the programs. So instead of figuring out where real waste fraud and abuse is happening, what organizations maybe nationally aren't doing the work they say is happening, this is just sort of a broad stroke, just cutting everything," he said.
The effect of mass federal cuts is complex: some agencies lost grants directly, some experienced more of an aftershock, where the people they served needed more support due to cuts elsewhere.
Stephanie Steed is the executive director of 18 Degrees, a nonprofit that supports kids and families in Berkshire County and West Springfield. She says they didn't lose any federal funding themselves, but still felt its absence.
"There's this trickle-down effect that happens, when federal funds are cut. Our participants feel the pinch, and they show up with needs that sometimes exceed what we have to offer," Steed said.
Reductions in federal funding has also impacted private companies that wanted to do business locally — most notably Sublime Systems, which scrapped plans for a low-carbon cement plant in Holyoke after losing an $87 million federal grant.
"There's this trickle-down effect that happens, when federal funds are cut. Our participants feel the pinch, and they show up with needs that sometimes exceed what we have to offer." — Stephanie Steed, executive director of 18 Degrees
Vega says that will have long-term economic consequences.
"When these companies come to western Mass, its a calling card for other companies to follow. If they're not coming, the next groups not gonna come, and the next group's not gonna come," he said.
There have been efforts on the state level to make up for lost federal dollars — Gov. Maura Healey is asking lawmakers to pass her DRIVE Act, a $400 million proposal which aims to make up for grant cancellations primarily in scientific research. But ultimately, it pales in comparison to the amount of money that once poured in from the federal government.
Legal battles are still playing out to recover grants that were canceled, and they've had some success. But in the White House budget request for the next fiscal year, the Trump administration is calling for more drastic cuts to federal funding streams.
