Navigating the Federal Funding Freeze: What Nonprofits Need to Know (Part 3)
February 13, 2025 - This content will be updated as developments unfold.
Latest Developments:
February 5: The DOJ issued a directive to begin civil and criminal investigations of NGOs and other private companies engaged in "illegal" DEI work. (Ending Illegal DEI and DEIA Discrimination and Preferences)
Read: DOJ Targets Illegal DEI Programs Under New Executive Order - National Law Review
By March 1, 2025, the Civil Rights Division and the Office of Legal Policy are to submit a report containing recommendations to “encourage the private sector to end illegal discrimination and preferences” related to DEI.
Notably, the memo does not prohibit educational, cultural, or historical observances that “celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.” Examples of these types of observances include Black History Month and International Holocaust Remembrance Day.
This new effort from the DOJ will likely face legal scrutiny in the coming weeks, as federal courts have routinely upheld private employers’ First Amendment right to promote DEI.
February 6: Secretary Turner announced in a press conference that HUD would immediately halt any pending or future enforcement actions related to HUD’s 2016 Equal Access Rule.
Per the National Alliance to End Homelessness: “The Equal Access Rule itself has not been rescinded; that requires a formal regulatory process.”
Read: Federal Updates & Continuing Advocacy - National Alliance to End Homelessness
February 7: President Trump issued a short memo directing “the heads of executive departments and agencies (agencies) to review all funding that agencies provide to NGOs”
Read: Why We Filed a Lawsuit Against the Administration | National Council of Nonprofits
February 10: A federal judge said on Monday that the White House had defied his order to release billions of dollars in federal grants, marking the first time a judge has expressly declared that the Trump administration is disobeying a judicial mandate.
February 11: A federal judge has blocked efforts to cut the NIH’s “indirect costs” in the funding it provides to research grants by 50%.
Read: NIH Budget Cuts - TIME
February 12: Kennedy Center President Deborah Rutter Steps Down as Trump Is Officially Elected Chair | Playbill
Read: Kennedy Center Responds to Trump's Intentions to Take Control | Playbill
Actions to take:
Guidance and legal orders are changing day to day. Always refer to granting agencies for updated guidelines.
Engage with your local lawmakers to express your concerns and opinions.
5calls.org is a tool that directs you to the right politicians and allows you to focus your efforts on the issues most pressing to you and your organization.
Be a storyteller to demonstrate policy changes' impact and real-world effects.
Participate in nonprofit coalitions actively advocating on behalf of the sector, including Purpose Possible’s newly formed Executive Exchange. Our first meetup was held on 2/12/25 and we will share key takeaways and next steps in a future blog post shortly.
This may be a good time to run through some cash flow forecasts for various scenarios. Here is a tool from the Nonprofit Finance Fund: Nonprofit Budgeting Scenario Planning Tool.
Tools:
Bookmark: 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.
Resources:
Georgia Center for Nonprofits US Policy Changes Resource Hub
Minnesota Council of Nonprofits Executive Orders affecting nonprofits
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