Nonprofit Funding at Risk: What You Need to Know
Recently, the Trump administration issued a federal funding freeze that restricted grants and contracts essential to nonprofit organizations nationwide. While the administration has since rescinded its memo ordering the pause, the executive action behind it remains in place, meaning funding restrictions could still be enforced.
Additionally, the National Council of Nonprofits (NCN) and other advocacy groups have taken legal action to challenge the funding freeze in federal court. A judge has issued a temporary hold on the freeze, but a final decision has yet to be made. Nonprofits must remain vigilant and prepare for potential disruptions.
What Happened?
- On January 27, the Office of Management and Budget (OMB) sent a memo instructing federal agencies to pause “federal funding assistance.”
- On January 29, the administration rescinded the memo, but White House press secretary Karoline Leavitt confirmed that Trump’s Executive Orders on federal spending remain in full effect and will be rigorously enforced across all federal agencies.
This is not the end of the issue. The administration has made it clear that funding reviews will continue, and federal agencies are expected to implement spending controls aligned with the broader executive order. These efforts could significantly impact nonprofit organizations that rely on federal funding to serve their communities.
Where Things Stand Now
In response, NCN, the American Public Health Association, Main Street Alliance, SAGE, and Democracy Forward took swift legal action, filing a lawsuit to block the freeze.
United States District Court Judge Loren L. AliKhan issued an Administrative Stay, temporarily blocking the funding freeze until Monday, February 3, at 5:00 PM.
If the judge rules against the administration, funding may remain intact, but the case could still be appealed, potentially reaching the Supreme Court.
Stay Informed and Take Action!
With ongoing uncertainty, it is critical for nonprofit organizations to remain vigilant and take proactive steps:
Reach Out to Your Federal Grant Contact
If your organization receives federal funding, either directly from the federal government or through a pass-through entity such as a state or local agency, contact your grant or contract representative immediately to determine whether your funding could be impacted if the freeze is enforced.
Stay Updated
Follow the National Council of Nonprofits’ up-to-date resource on executive actions and their potential impact on nonprofit funding.
Contact Your Representatives
Use our IE Representative Look-Up Tool to find and contact your Congressional Representatives. Urge them to stand against any attempts to cut or withhold funding that supports vital community services.
Report the Impact
If your organization has been affected or has concerns about potential funding restrictions, please take a moment to share your experiences through these brief surveys:
CalNonprofits Survey
Help illustrate how federal funding uncertainty is impacting California’s nonprofit sector.
National Council of Nonprofits Survey
Provide insight into how these funding challenges are affecting nonprofits nationwide.
Nonprofits in the Inland Empire and across the country must remain engaged and be prepared to advocate for funding that allows us to support and uplift the most vulnerable in our communities. This funding ensures that essential services remain accessible to everyone who depends on them.
