CEO Insights on Federal Funding

This week was unseasonably cold and wet in the Twin Cities, and I found myself suddenly wondering where I had stored my warm comfortable sweaters. Despite my protests to the contrary, it was undeniably clear that summer was ending, the seasons were changing, and fall was coming to Minnesota.

Despite my feelings to the contrary, I simply needed to get ready to deal with what was inevitable.

As many people who I have seen the past few weeks have asked about the status of MHC’s federal funding and we have had some recent developments in the litigation, I thought for the benefit of those who I have not had a chance to visit with, I would share some of my thoughts.

This week, the United States Attorney’s Office filed its Answer in the litigation action involving the decision of the National Endowment for the Humanities (NEH) to terminate all the state operating grant contracts with its affiliates such as the Minnesota Humanities Council (MHC) and to eliminate the office Federal State Partnership within NEH.

As background, the Federation of State Humanities Councils and the Oregon Humanities Council filed a Compliant against NEH in the Federal District Court of Oregon and a Preliminary Injunction motion to stop NEH from taking further action to terminate its relationships with Humanities affiliates and dismantle the NEH Federal State Partnership office. Earlier this summer, our presiding judge granted the relief that we requested in our Preliminary Injunction motion that NEH must maintain its relationship with the humanities councils.

After a Preliminary Injunction motion is granted, the attorneys for the parties often engage in serious discussions about how they can settle the dispute on behalf of their clients. Why? Because a Court only grants a Preliminary Injunction motion after it has a made a finding that one party is likely to win on the merits at trial.

While the relationship has been professional and cordial, there have been no settlement discussions between counsel for NEH and counsel for the Federation. In reviewing the NEH’s Answer, NEH appears to be preparing to defend their actions to the end.

What does it mean for humanities councils such as MHC if NEH decides to appeal the Preliminary Injunction Order?

The presiding judge in our matter will not schedule our case for trial until after the period for NEH to appeal his Preliminary Injunction Order has elapsed. The last day that NEH counsel can file its appeal is October 6. If NEH pursues an appeal of the Preliminary Injunction Order, the trial court will stay all proceedings before the court until after NEH’s appeal has been exhausted.

If NEH files an appeal on the Preliminary Injunction Order, the appeal will need to be briefed by the parties. The Ninth Circuit Court of Appeals will then schedule argument for the parties; after the argument is scheduled, the Ninth Circuit appellate panel will need time to write and issue its opinion.

When the Federation filed its Complaint against NEH, I knew that it was highly probable that MHC would not have final resolution of our 2025 funding until 2026.

On September 30, the Continuing Resolution that provides funding for the federal government is set to expire. The Federal budget for 2026 is set to begin on October 1.

The committees that have oversight of the Department of Interior, the budget from which NEH receives its funding, have begun preparing budget proposals for 2026. The initial information emerging from those committees suggests they will request that Congressional leadership restore and fully fund the humanities councils within the NEH budget as they expected to be funded at the beginning of 2025.

While this is an important first step for the humanities councils, there is still significant work ahead of us to secure federal funding in 2026.

Further complicating matters are recent discussions that we may not have an appropriations bill for the upcoming year but rather we will continue to fund the federal government by a Continuing Resolution bill. The current Chair of NEH has indicated that he believes that without explicit language from Congress in an appropriation bill that he has discretion to reduce funding to humanities councils.

As my parents often reminded me, hope for the best, but prepare for the worst.

While I remain hopeful, tempered as it may be, I understand that I need to prepare for the possibility that MHC may not receive federal funding from NEH to support its programming until 2027. (Please know that Grants from the funding we received from the State of Minnesota will continue to be awarded.)

Looks like it will soon be time to find my warm clothes and heavy outwear for the chill of winter.