On January 27, 2025, the Office of Management and Budget (OMB) issued a memorandum directing federal agencies to temporarily pause the obligation or disbursement of federal financial assistance. The intent of the pause was to conduct a review of federal grant and loan programs in alignment with recent executive orders. The directive specifically referenced funding related to foreign aid, nonprofit organizations, diversity, equity, and inclusion (DEI) initiatives, gender-related programs, and environmental policies.
While the memorandum stated that Social Security, Medicare, and certain direct-to-individual payments would not be affected, it raised concerns across multiple sectors, including the nonprofit community. The scope of the pause remained uncertain, and some organizations reported disruptions in accessing previously approved federal funds.
In response to these concerns, the National Council of Nonprofits (NCN) launched a data collection initiative to assess the impact of this funding pause on nonprofit organizations, research institutions, and community programs. If your organization has been affected, NCN encourages you to share your experiences by completing their brief form here: https://www.councilofnonprofits.org/form/effects-executive-actions-nonprofits
This data will help NCN and other nonprofit advocates better understand the real-world effects of the pause and ensure that policymakers have access to concrete examples of how organizations and communities are being impacted.
Subsequently, on January 28, 2025, a federal judge temporarily blocked the administration’s pause on federal grants and loans, allowing the continuation of funding until a scheduled hearing on February 3. This legal development adds another layer of complexity to the situation, and its long-term implications remain uncertain.
While this situation continues to develop, we will monitor updates and share relevant information as it becomes available. If your nonprofit relies on federal funding, we encourage you to stay informed and participate in NCN’s data collection efforts to help provide a clearer picture of the nonprofit sector’s response.
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