Despite hopes of slashing federal funding for progressive institutions, millions of State and federal dollars continue to pour into an expanding network of non-profit organizations, including K-12 schools, medical centers and more in the Birmingham area.
Federal spending was a hot topic in the opening salvo of President Donald Trump’s presidency, with the implementation of the Department of Government Efficiency (DOGE).
DOGE initially targeted Health and Human Services (HHS) funding to “woke” initiatives, the term used for programs promoting DEI, “health equity”, and disparities research focused on racial/ethnic minorities or LGBTQ+ people.
In the case of the Alabama-based Birmingham AIDS Outreach (BAO), HHS grants have continued to flow in for years, despite anticipated cuts under Trump.
According to its IRS filings, BAO is a registered 501 (c) (3) nonprofit with reported revenue of $14.8 million in fiscal year 2024. The organization lists its expenses at $13.7 million, which includes the $136,252 salary of the only paid BAO employee listed on IRS forms, Karen Musgrove.
Musgrove, an adjunct professor at the University of Alabama at Birmingham, is also the CEO of the Magic City Acceptance Academy (MCAA) and the Magic City Wellness Center (MCWC). MCAA is an LGBTQ-affirming charter school in Birmingham, while MCWC is an LGBTQ medical wellness center. In 2025, MCAA received roughly $3.38 million in State funding and $337,000 in federal funding.
MCAA has been at the center of several controversies, drawing condemnation from state leaders who want to see State funding eliminated. The Charter School Commission is slated to consider approving an MCAA expansion at a May 4 meeting.
There are no public records of MCWC’s funding, but it is registered as a 501(c)(3) and appears to be an affiliate of BAO and MCAA.
BAO is closely partnered with MCAA, though both receive their own streams of federal and State funding.
BAO appears to offer services to HIV and AIDS patients. However, it does not list services on its website. It also boasts of feeding pets and administering pet vaccines on its mobile van.
On its social media, the connections show through in events and partnerships with MCAA, MCWC, BAO and the Magic City Acceptance Center, which boasts “social and supportive programming rooted in resilience and inclusion to empower and connect Alabama’s LGBTQ+ community.”
BAO is ostensibly progressive, advocating for LGBTQ-related causes.
BAO also advertises regular Bingo nights, with cash prizes. Its most recent IRS Form 990 for FY2024 reports revenue of $67,000 from its gaming operations.
For FY2024, $13.35 million of BAO’s revenue came from grants and contributions. According to federal records, BAO received $3.7 million per year from 2023 to 2025, all of which came through HHS.
The most recent records for State funding come from FY2025. Those records show the State doled out nearly $1.1 million in funding. Those also came from grants from the Alabama Law Enforcement Agency, the Alabama Department of Economic and Community Affairs (ADECA), and the Alabama Department of Public Health.
BAO also has a friendly relationship with Birmingham Mayor Randall Woodfin, whose political campaign has provided funding to BAO. Woodfin makes regular appearances on BAO’s social media to tour the facility, give checks or host bingo nights.
The relationships among the entities in the Musgrave web, including MCAA, BAO, MCWC, and the Magic City Acceptance Center, are unclear. They all appear to be connected through BAO and MCAA. However, public documents do not indicate who funds the center or the wellness center.
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