What is the National Endowment for the Arts and How Is It Funded?

The National Endowment for the Arts (NEA), the largest funder of the arts in the United States, is under renewed threat, as President Donald Trump moves to target cultural institutions in a sweeping bid to shrink the federal government.

The agency was founded by Congress in 1965 in order to encourage arts participation and practice, but could be shut down after Trump proposed slashing the agency in a budget proposal released Friday. 

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The NEA did not immediately respond to TIME’s request for comment. 

Several arts organizations received notice of NEA grant cancellations last week, where the agency outlined an update to NEA’s grantmaking policy that is “being allocated in furtherance of the Administration’s agenda,” an email sent to the San Francisco Jazz Organization reviewed by TIME, says. The NEA says they would focus on elevating projects for the 250th anniversary of American independence, “making America healthy again,” and elevating historically Black colleges and universities. “Your project, as noted below, unfortunately does not align with these priorities,” the email read.

“We are incredibly disappointed to receive notice that the NEA is changing funding priorities mid-year. The arts build stronger communities through developing empathy, social cohesion, and economic impact. These changes not only hurt A.C.T. but also have far-reaching consequences for arts organizations throughout the country,” Jennifer Bielstein, Executive Director, American Conservatory Theater, which lost a $40,000 grant for a musical, told TIME in a statement.

The budget cuts are part of a larger Administration policy to reduce the U.S. federal deficit, which stands at $1.3 trillion for fiscal year 2025, according to the Treasury Department. While the future of the agency is unclear, Trump may do good on the undoing of the NEA. In March, the President issued an Executive Order seeking to eliminate as much of the Department of Education as it could, moving some of its functions to other agencies and laying off nearly half of its workforce. 

This marks the second time Trump attempts to eliminate the NEA. Congressional Republicans worked with Democrats to save the agency during the President’s last term. 

The National Endowment for the Humanities and the Institute for Museum and Library Services are also at risk for termination under the 2026 budget proposal. 

Here’s what to know. 

What does NEA actually do? 

The NEA is the federal agency that funds the arts and art education across the country. It provides grants to nonprofit organizations, public agencies, colleges and universities, and individual writers for projects. It also has research grants and funds fellowships for translation and creative writing in prose and poetry. 

What was it funding?

Prior to the start of the new Administration, the NEA allowed organizations to apply for three different types of grants. One program, which provided funding for projects that reach “underserved communities,” was cut earlier this year as part of the agency’s pivot to comply with Executive Orders. The NEA temporarily asked applicants to commit to not promoting diversity, equity and inclusion, as well as “gender ideology.” But the agency changed that request after a lawsuit was filed by the American Civil Liberties Union, National Queer Theater, and others in response.  

NEA funding spans all 50 states, including rural and urban communities. For fiscal year 2022, the NEA issued more than 2,300 grants totalling at least $117 million, according to the NEA annual performance report issued in February 2023. 

In order to receive a grant, organizations must outline the project they are working on, project budget, and plan to match funding with nonfederal sources. Grants to organizations are matched one-to-one with nonfederal sources.

A panel of experts, who are not NEA staff, review and discuss the artistic merit of the project, including the impact the project has in its respective field, and the communities it will serve. The panel then passes their recommendations to the National Council on the Arts, made up of leading artists, which sends submissions to the NEA chairman. The chairman makes the final decision regarding which entities receive funding. 

The NEA sent at least two different types of emails to grant recipients on Friday, saying that it would be updating its policies to focus on funding projects that “reflect the nation’s rich artistic heritage and creativity as prioritized by the President.” 

The agency claimed that it would prioritize projects serving historically Black colleges and universities and Hispanic-serving institutions. Additionally, NEA says it is looking to support arts that “celebrate the 250th anniversary of American independence, foster A.I. competency, empower houses of worship to serve communities, assist with disaster recovery, foster skilled trade jobs, make America healthy again, support the military and veterans, support Tribal communities, make the District of Columbia safe and beautiful, and support the economic development of Asian American communities.”

What artists and groups receive these grants?

Several theaters, art groups, individuals, and others receive NEA grants. Some recipients may seem like nontraditional grantees, as NPR reportedly receives two grants from the agency totaling $65,000. 

Numerous groups, including the Berkeley Repertory Theater, American Conservatory Theatre Foundation, and San Francisco Jazz Organization, are now seeing their funding be rescinded. 

New York City’s Central Park Summer Stage, and Open Studio Project, an education nonprofit in Illinois have also seen cuts, NPR reports.