When it finally became clear that Moonlight had won the 2017 Oscar for best picture, nowhere were the cheers more intense than at a small community arts center in one Miami neighborhood.

Tarell Alvin McCraney, whose play was made into the movie and also won him the adapted screenplay Oscar, held his golden statuette aloft and dedicated it to “all those black and brown boys and girls and non-gender-conforming who don’t see themselves, we’re trying to show you you, and us.”

He had not forgotten how far he had come since he turned up at the African Heritage Cultural Arts Center in the Liberty City section of Miami as a child and didn’t have the money to pay for classes there. “When he couldn’t afford the modest tuition fee, we waived it. He got started in a government-run arts center,” said Michael Spring, director of the Miami-Dade county department of cultural affairs.

A crucial part of that public funding comes from the federal government via the National Endowment for the Arts (NEA), which gave Spring’s department $40,000 last year. The budget that Donald Trump sent to Congress last month allocates $1.6bn to build a border wall with Mexico while at the same time pledging to shut down the NEA. If Trump gets his way, the closure, now to be debated in Congress, would begin with an 80% cut in NEA funds from this fall, slashing the annual budget from $148m to $29m.

Even $148m is less than Democrats estimate is the annual cost to taxpayers of providing security at Trump Tower in New York alone. The NEA gives 40% of its budget to state and local authorities across the US and spreads out 60% in grants to individual artists or programs, with many awards just $10,000.

That money can end up anywhere from a youth orchestra in rural Idaho to a dance project in a nursing home in Ohio, funding a theater program in small-town South Dakota or keeping a budding poet off food stamps in New Mexico.

And in some cases it helps to nurture the Oscar, Nobel and National Book Award winners of the future. “It’s diabolical,” Spring said of the president’s move to destroy the NEA.

“The Tarells of this world don’t start in Hollywood or the Royal Shakespeare Company. They start at the African Heritage Cultural Arts Center, and that place has helped thousands of kids dream about something bigger than they knew – and what they knew was poverty in the inner city,” he said.

McCraney has spoken about growing up in an environment where, if he hadn’t been bitten by the creative bug and found a local incubator for that, he could easily have ended up as just another drug dealer in his neighborhood.

Now, he’s donated $20,000 to the arts center that mentored him and which he calls “hallowed ground”, and he leads a summer playwriting program there. Spring said the NEA funds that go via the state and county into that center and similar ones, such as the South Miami-Dade Cultural Arts Center 25 miles away, would be “extremely difficult, if not impossible” to replace with more local funds, business sponsorship or philanthropic money.

“That’s why we put them there in the first place: they are in underserved communities that are not the sexy parts of town. If we waited for private sector money, it simply wouldn’t happen,” Spring said.

Tarell Alvin McCraney accepts an Oscar for Moonlight. Photograph: Lucy Nicholson/Reuters

Margaret Carlson, producing artistic director of the small Verb Ballets company, based in a church basement outside Cleveland, was ecstatic at receiving a $10,000 NEA grant last fall. “NEA grants are highly competitive and out here in the

midwest few and far between. It’s a huge stamp of approval that helps you with your other fundraising,” she said.

She used it this spring to hire dancers and the legendary choreographer Dianne McIntyre to go into two adult daycare centers, gather the residents’ life stories and translate them into dance performances which proved transformational, she said.

“One old lady had not left her room in two years, but she came into the common area to watch the performance. Residents’ families came and they were so proud, they saw their relatives through new eyes,” Carlson said.

Carlson said there was no way the project would have happened without the grant. “Do we want to be the only developed nation whose government does not support the arts? What does that say about us?” she said.

Do we want to be the only developed nation whose government does not support the arts?​ What does that say about us? Margaret Carlson

McIntyre told the Guardian that she had been particularly moved by a resident who was a military veteran and had lost both his legs but “became a superstar as his story unfolded in front of him. He was beaming and people were in tears.”

The choreographer, who was born in Cleveland, then recalled the grant of between $5,000 and $10,000 she received from the NEA back in 1974, her first funding, which allowed her to create a dance school, Sounds in Motion, in the Harlem neighborhood of New York City.

In addition to performing at prestigious venues, she would take her dancers to the streets, block by block, in often-troubled parts of the city, inspiring kids there to take up dance “or just helping people understand their own heartache”, she said.

“We have to save the NEA. The arts nourish the soul of the people, who have paid the government to provide them with services and this is just one aspect of that,” she said.

Jennifer Givhan received an individual creative writing fellowship of $25,000 from the NEA in 2015. She works “paycheck to paycheck” as an adjunct professor and at the time her husband was training to be a nurse, having been laid off from AT&T during the 2008 financial crash, and they were raising their two young children in Albuquerque, New Mexico. “That grant was everything to me. A lifeline,” she said.

They sometimes relied on food stamps and after Givhan’s grant she had the time to support the family while producing her first published collection of poetry. That led to a second, then two more, and her first novel, as well as acquiring an agent.

“I was at the cusp, creatively, and it was huge. Perhaps I could have done it without the funds but it would have taken years longer. And it also fed my soul and my spirit and when you are so poor and struggling to pay the bills it’s sometimes hard for the inspiration to come. It was an endorsement,” she said.

And as a Mexican American, Givhan said, it was important to her to give readings in Latin communities in New Mexico, which the grant also helped facilitate.

“The idea of losing the NEA is soul-crushing. I feel as though I have been saved many times in my life by reading. When I was bullied at school I turned to poetry. Taking money away from the arts is like taking it from healthcare,” she said.

Red, rural states such as South Dakota and Idaho, which voted enthusiastically for Donald Trump, benefit considerably from NEA funding to support theater, music, writing, visual and other arts across their far-flung communities. In 2016, South Dakota received a total of $1.05m from the NEA in a combination of funds to the state arts body and individual grants. That’s just 0.7% of the NEA’s $148m budget but in a highly rural, sparsely populated state funded a lot of local theater, music and Native American art projects.

Hannah Rodabaugh assists students at the Log Cabin Literary Center in Boise, Idaho. Photograph: Courtesy of The Log Cabin

Idaho received a total of $822,000 from the NEA last year, which was distributed to projects flung across the rural state, often in amounts the state arts chief called “piddling but priceless”.

The Log Cabin Literary Center in Boise, Idaho, received an individual grant of $10,000 from the NEA last fall. It’s not enough to make or break the center, but it’s a priceless endorsement from the government that’s instrumental in attracting membership, said Kurt Zwolfer, executive director.

The center pays local writers “a living wage” to go into public schools, especially those with higher percentages of low income kids, and teach them the art of poetry, memoir or fiction writing – skills that can become squeezed out of a busy core curriculum, Zwolfer said.

The program might sprout the next Alice Walker or Sherman Alexie, just two authors from thousands who have benefited from NEA grants since the body was formed in 1965, or it might simply help a child start a journal to process their thoughts and emotions.

The center also receives funding from the Idaho Commission on the Arts, which is a mix of state and NEA money. “We would be in serious trouble without it. It would endanger programs like writers going into schools,” said Zwolfer.

He also sends writers into a school for pregnant teens and into the juvenile detention center.

“Many in the detention center have given up on the school system and it’s given up on them. They are turned off by authority but they look forward to our classes. We have no illusions, we are not turning every life around, but it can help their self respect and self esteem to write a memoir or a short story and feel heard – it can help some get back on track in life,” he said.

Michael Faison, executive director of the Idaho Commission on the Arts, the state governing body, said that last year the state received $787,000 from the NEA. And the state legislature, which has a Republican super-majority, agreed to add state funding of $810,000 for the arts.

“The support is bipartisan. This money cannot simply be replaced by sponsorship or donations. Without the NEA, many projects simply won’t happen,” he said.