What 2025 Taught Us About Capacity-Building Grants: Operational Lessons from Canceled and Disrupted Federal Awards

Patricia Moore Shaffer, Ph.D., Principal & Lead Evaluator

In 2025, many minority-serving higher education institutions (MSIs) found themselves navigating an operating environment few had anticipated: federally funded capacity-building grants, including Title III and V awards, that were modified, disrupted, or canceled outright after implementation had already begun. For project leaders, this introduced a level of uncertainty that went far beyond routine grant management and into core questions of staffing, institutional risk, and trust with communities.

Across multiple projects, our team observed institutions making rapid, consequential decisions—sometimes within weeks—about whether to scale back, pause, redesign, or absorb grant-funded activities. These decisions were not failures of planning or leadership but responses to a funding context that shifted after commitments were made.

Looking across these experiences, several operational lessons stand out.

1. Grant cancellation risk must now be treated as a design constraint, not a remote possibility. Historically, most capacity-building applications assumed that once awarded, funding would persist through the project period barring major compliance failures. In 2025, that assumption no longer held. Institutions that weathered cancellations most effectively were those that had avoided hard dependencies on grant funds for essential personnel or student services, and that had sequenced activities so early investments retained value even if funding was curtailed.

2. Grant staffing models must be designed for adaptability. In several disrupted or canceled grants, staffing structures were among the least flexible elements of project design. Grant-specific positions left institutions with limited options when funding conditions changed. Institutions that adapted more effectively treated grant staffing as modular. They relied on internal reallocations, phased hiring, and cross-training, and they defined core functions separately from specific positions. This allowed essential work to continue even as grant staff positions were cut.

3. Over-engineered project designs proved brittle under disruption. Complex activity structures, layered deliverables, and tightly coupled timelines left little room to adapt when funding conditions changed. In contrast, projects built around a small number of clearly defined core components were easier to scale down while preserving institutional learning. Simpler designs were not weaker; they were more resilient.

4. Sustainability planning mattered for all projects. In canceled projects, sustainability planning became an immediate concern. Institutions that had already identified which roles, practices, or partnerships were worth sustaining could make faster, more defensible decisions. Where sustainability had been treated primarily as a narrative requirement in the grant application and not revisited after award, institutions were left improvising under pressure.

5. Trust with communities is built—or eroded—through how institutions manage disruption. Grant cancellations did not occur in a vacuum. Many projects were embedded in long-standing relationships with students, families, communities of color, and regional partners. When activities were paused or withdrawn, communities experienced these changes not as abstract funding shifts, but as broken commitments. Institutions that maintained trust were those that communicated early and honestly about changes, acknowledged impacts on participants, and involved community partners in decisions about what could be preserved or adapted.

What these experiences suggest for minority-serving institutions

The 2025 funding environment underscored a difficult truth: capacity-building grants are increasingly operating in conditions of volatility, even as expectations for compliance, outcomes, and documentation remain high. For MSIs, this compounds long-standing capacity constraints and places additional strain on staff and leadership.

The institutions that navigated cancellations most effectively were not those with the most ambitious designs, but those with the clearest operational priorities. They treated grant plans as adaptable rather than fixed scripts, and they made early design choices that preserved their initiative's integrity when funding circumstances changed.

As an evaluation firm, this is where our work has increasingly concentrated—supporting institutions not just in designing and evaluating grant projects, but in making operational decisions about project implementation when conditions shift. As federal funding landscapes continue to evolve, capacity-building will depend as much on resilience and judgment as on alignment with funder priorities. Those lessons, while hard-won, are now shaping how institutions think about risk, sustainability, and what it truly means to build capacity in uncertain times.