Federal Funding Halt: What We Know So Far

UPDATE: According to an Associated Press article updated 8:34 PM ET on January 28, 2025, a federal judge has temporarily blocked the funding freeze. The article, which you can read here, credits the advocacy efforts of the National Council of Nonprofits for the administrative stay, which will last until Monday, February 3, 2025.

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As many have heard by now, the Trump administration issued a “temporary” pause the evening of Monday, January 27, 2025, on federal grants and loans effective January 28, 2025, at 5:00 PM (ET). The memorandum from the Office of Management and Budget (OMB) states:

“Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” 

The memorandum indicates Social Security and Medicare benefits will not be impacted, as well as “any other assistance determined to be provided directly to individuals.”

There is significant uncertainty about how broad this order extends. Regardless of its reach, we are certain this action will effectively halt many billions of dollars in federal grants and loans to organizations across the country and appear to leave many other federal payments in jeopardy — including grants and loans issued to charitable nonprofits, research bodies, community projects, and more in Pennsylvania. There is also a constitutional question, as it is Congress, not the Executive Branch that holds the power of the purse and has authorized these expenditures.

PANO is working closely with our partners at the National Council of Nonprofits (NCN) and our state association colleagues around the country to get more and accurate information.

What Happened on January 28:

• NCN filed a Motion for Temporary Restraining Order (TRO) in the U.S. District Court for the District of Columbia today to block the White House Office of Management and Budget from pausing all federal agency grants and loans. The National Council of Nonprofits filed together with public health and small business leaders, and was represented in court by Democracy Forward. You can read their press release here.
• The White House also issued some guidance indicating that certain federal funding will not be stopped. However, some organizations have not been able to draw down on funds starting late yesterday.

What We Still Don’t Know:

• How wide is the scope of the freeze and 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 staffing freezes and terminations?
• What are the ramifications in our communities if needs go unmet and if organizations are forced to downsize or close?

To help get a better sense of the real-world effects of the earlier-announced Executive Orders and the new freeze in federal funding, NCN set up this form on their website for nonprofits to share the effects on their missions and the people they serve. If your nonprofit is affected by either, please fill out the brief form and share the form with other nonprofits you know.

Sharing our collective story about the ripple effect a pause in federal funding will have on Pennsylvania communities is one way to take action – during a time when everything is so uncertain. Keep the stories coming and stay connected to each other.

The PANO network is stronger together.

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Image Credit: Image by amrothman from Pixabay