Federal Actions — Updates
March 6, 2025 — A federal judge extended an order that prevented the Trump administration from freezing billions in congressionally approved funds to 22 states and the District of Columbia. The judge found that the administration had overstepped in trying to stop the agencies from using money appropriated by Congress. Read more here.
February 25, 2025– In the case National Council of Nonprofits et al v Office of Management and Budget, represented in court by Democracy Forward, Judge Alikhan ruled to grant a preliminary injunction. The ruling states that OMB is prohibited from implementing, giving effect to, or reinstating under a different name the unilateral freeze of all new federal spending, attempted under OMB’s funding freeze directive. OMB must instruct all federal agencies of the preliminary injunction.
February 11, 2025 — A federal appeals court has rejected a Trump administration push to reinstate a sweeping pause on federal funding, a decision that comes after a judge found the administration had not fully obeyed an earlier order. Read more here.
February 3, 2025 — The judge presiding over the National Council of Nonprofits case granted another Temporary Restraining Order against the administration’s ability to halt federal grants and loans – you can find the ruling here and the press release here. In summary, 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.
January 31, 2025 — In a temporary restraining order (TRO) issued today, a Rhode Island judge said that federal agencies cannot pause or freeze any awards or obligations in any state pending settlement of ongoing litigation. The order applies to the January 27 memo from the Office of Management and Budget (OMB) freezing federal payments as well as to the President’s recently issued executive orders. Find a copy of the order here.
January 29, 2025 — The OMB memo that froze all federal grants and loans was rescinded. However, the administration has indicated that a review is still in process and although the memo was rescinded, the funding freeze was not.
What we know:
- What funds are paused? There has been a lot of confusion about which funds are still paused. While we do not know the full extent of the freeze, any funding related to the Inflation Reduction Act and the Infrastructure Investment and Jobs Act has been halted.
- What funding is being reviewed? Federal agencies must submit detailed information to the administration on programs, projects, or activities no longer eligible under the series of executive orders.
- Are any programs exempt from a pause? The administration has indicated that Medicare, Supplemental Nutrition Assistance Program (SNAP), Social Security benefits, and all assistance to individuals will be unaffected by a pause.
- Does this impact previously awarded grants? Even grants that have been awarded but not spent are in review.
- How would a potential freeze affect federal funding to Alaska? The funding freeze could affect the billions of dollars Alaska gets each year from the federal government, including funds directly to nonprofits and tribes and funds to the state. According to research Foraker has conducted in partnership with the University of Alaska Anchorage Center for Economic Development, the latest available data shows that Alaska received $38 billion in federal grants in 2023. This is in addition to funding from the Infrastructure and Jobs Act, Inflation Reduction Act, and remaining federal pandemic relief funds. Each of the projects within these funds is being reviewed for compliance with the executive orders before they can commence.
What we don’t know:
- How long will the court cases take to resolve?
- How will the executive orders be interpreted during this evaluation period?
- What access will nonprofits have to individuals at their funding agencies to ask questions and receive guidance during this evaluation period, particularly in light of federal staffing freezes and terminations?
- What are the ramifications in our communities if needs go unmet and if organizations are forced to downsize or close?
What nonprofits can do:
- Don’t panic, breathe, take care of yourselves. To reduce fear, communicate what you can with staff.
- Run scenario plans and engage in discussions with your board and staff leaders. If all your federal funds were cut, what changes would you need to make to program services, staffing, or other expenses to remain viable?
- Start documenting how you anticipate this impacting your organization.
- Ensure any communications you receive from federal agencies are legitimate.
