Navigating the Federal Funding Freeze: What Nonprofits Need to Know (Part 2)
February 5, 2025 - This content will be updated as developments unfold.
“On January 29, the U.S. Office of Management and Budget (OMB) rescinded M-25-13, which it had issued two days earlier, and which required federal agencies to "temporarily pause all activities related to obligation or disbursement of all Federal financial assistance" and "complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President's executive orders."
Days after it was issued on January 27, one federal judge administratively stayed a portion of the memo before the OMB rescinded it altogether. A White House press secretary subsequently explained that the "freeze" was, in fact, still in place, and another judge indicated he intends to issue an injunction soon. While much remains unclear, there are basic parameters and next steps every FFA recipient should consider.”
-Venable LLP. (2025, January). The OMB Issued a Memo Freezing Federal Financial Assistance. And Then Rescinded the Memo, But Not the Freeze. Confused? Read On.
Most Recent Updates:
On Monday, February 3rd, the U.S. District Court for the District of Columbia granted a temporary restraining order of the OMB’s freeze on federal grant disbursements that has put essential services across the nation in jeopardy in response to a suit filed by Democracy Forward on behalf of the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE.
Full press release from National Council of Nonprofits
What does this mean?
National Council of Nonprofits President, Diane Yentel explained on LinkedIn:
The judge presiding over our case - National Council of Nonprofits et al vs. Office of Management and Budget - GRANTED another Temporary Restraining Order against the admin’s ability to halt federal grants and loans!!
The DOJ’s motion to dismiss was DENIED.
OMB is ENJOINED from implementing, giving effect to, or reinstating under a different name the directive to halt federal spending broadly.
OMB must provide notice to all federal agencies, and instruct all such agencies to release any funding that was paused under the directive. OMB has to update the court on Feb 7th on how they have notified the agencies.
Much more to come but make no mistake - this is a significant setback to the administration’s plans to halt federal funding.
Actions to take:
In response to the Federal Funding Freeze announcement on Tuesday, January 27, Purpose Possible issued a statement to its clients titled "Navigating the Federal Funding Freeze: What Nonprofits Need to Know.” Despite the court’s ruling on Feb. 3rd, PP is strongly encouraging all of our clients to take steps to ensure the resilience and solvency of their organizations with or without government funding. No matter what happens with government funding, your organization can only be made stronger by diversifying its funding streams and deepening relationships with donors and private funders.
Tools:
To help start the conversation and navigate the complexities of scenario planning we have designed a flowchart to aid in the decision-making process.
In Community:
Exec Exchange: A Nonprofit Leadership Town Hall
Join Purpose Possible and other nonprofit executive leaders for a candid discussion of recent threats to government funding, recommendations for how to move forward, and a collective call to action.
Date: Wednesday, February 12, 2025
Time: 9:00am - 11:00am EST
Location: East Atlanta Kids Club
at Brownwood Recreation Center
Venue graciously provided by East Atlanta Kids Club
Breakfast will be provided
Resources:
Georgia Center for Nonprofits, Executive Orders & Nonprofit Impact Webinar
(At the time of this article, registration was closed, but we encourage folks to check back as they may expand capacity)
Join us to hear from a panel of experts specializing in nonprofit law and crisis communications. Bring your leaders and your questions, and we’ll provide clarity around the legal developments to date as well as action steps for preparation and advocacy.
Date: Thursday, February 6, 2025
Time: 3:00 - 4:30 pm EST
National Council of Nonprofits presents, Executive Actions and Their Impacts on Charitable Nonprofits Webinar - RSVP, OR Register to Receive the Recording
The last couple weeks have been a whirlwind for many nonprofits, from the more than 100 Executive Orders (EOs) issued by President Trump to the confusion about the funding freeze ordered in a memo from the Office of Management and Budget (OMB). While a judge granted an Administrative Stay in the case filed by the National Council of Nonprofits and others, and OMB rescinded the memo, the EOs are still in effect, and charitable nonprofits with federal grants are still feeling the impact of these decisions. Learn more about EOs, the ones most directly or indirectly impacting charitable nonprofits, and the latest on the legal challenges.Because we expect overwhelming interest for this webinar, please only click the link to register for the live event if you plan to view it live. If you don't anticipate being able to join live, please register to receive the recording so we can keep as many live lines available as possible.
Date: Friday, February 7, 2025
Time: 3:00-4:00pm EST
Kilpatrick Townsend presents, The Changing Landscape of Federal Funding in the Trump Administration - RSVP
Join Kilpatrick Townsend to discuss the new administration's approach to federal funding and its implications for grant and aid funding and policy changes. We will explore topics including, but not limited to, the rescinded federal funding freeze, a shift in DOJ enforcement actions, policy changes affecting grant administration, and what we might see moving forward.
Date: Wednesday, February 12, 2025
Time: 1:00 p.m. to 2:00 p.m. EST
Reading
The American Bar Association: What is an Executive Order?
National Council of Nonprofits: “Executive Orders Affecting Charitable Nonprofits” - a chart of the most pertinent executive orders, expected impacts, and related actions that will be updated regularly.
