NEW YORK: If any nonprofit epitomises the whiplash experienced by climate advocacy groups in the United States over the past few years, it’s Rewiring America.

Founded in 2020 shortly before former President Joe Biden was elected, the organisation focuses on shifting US homes from fossil fuel-powered appliances to electric ones like heat pumps, a prime goal of Biden’s Inflation Reduction Act (IRA) when it was passed in 2022.

Rewiring America was poised to receive nearly US$500mil from a US$27bil programme created by that law.

In February, the group was blocked from accessing those funds, and the Environmental Protection Agency, which administers the programme, has since terminated US$20bil in grants because of “substantial concerns” about “programme integrity, the award process, programmatic fraud, waste and abuse, and misalignment with the agency’s priorities”.

The programme is under investigation by the Federal Bureau of Investigation, according to the agency.

Meanwhile, grantees have sued over frozen bank accounts. The government has since walked back some of its claims in court.

“To be clear, we’re not accusing anyone of fraud,” Justice Department lawyer Yaakov Roth said at a hearing in May.

The funding uncertainty put Rewiring America in a bind, says chief executive officer Ari Matusiak, “and so we had to make the decision to operate financially as though the dollars weren’t there”.

It led to Rewiring America laying off 36 staff, more than a quarter of the organisation, and scaling back its work while putting more focus on regional projects.

President Donald Trump’s assault on clean energy regulations and funding has hit other parts of the climate NGO sector.

Biden-era programmes that injected billions into nonprofits have been culled, and leading philanthropists have warned they’ll be unable to fill in the gap.

At risk is the energy transition in the United States as nonprofits struggle to provide services while also playing defence to protect remaining federal climate programs.

“We still need to act now to stop some of the worst impacts of climate change,” said Randall Kempner, founder and executive director of the Climate Philanthropy Catalyst Coalition.

“That fact has not changed. If anything, our ability to move on that has been negatively impacted by the change in the administration.”

Rewiring America isn’t alone: US climate-related nonprofits have cut positions and looked for other ways to cut costs in recent months as the flow of funds has dried up. Environmental group RMI has also cut jobs, laying off about 10% of its staff in May following federal funding cuts.

The New Orleans-based nonprofit Deep South Centre for Environmental Justice had to lay off eight staffers after losing a US$13mil, five-year federal grant in February, said Beverly Wright, the group’s founder and executive director.

“We hired a lot of people we had to let go,” Wright said. “I thank God we hadn’t hired even more.”

Nonprofits were among the entities eligible for around US$54bil of the IRA’s nearly US$105bil in climate grants and direct agency spending, according to the Inflation Reduction Act Tracker, a project run by Columbia Law School and the Environmental Defense Fund. — Bloomberg