OMB Pauses Federal Grants to Nonprofits

Page updated as of February 4, 2025 @ 8:50 am
UPDATE on National Council of Nonprofits, et al., v Office of Management and Budget, et al Civil Action
- The judge presiding over the National Council of Nonprofits et.al. case has granted another Temporary Restraining Order, on February 3rd, against the administrations ability to halt federal grants and loans.
- The Department of Justice’s motion to dismiss the case was denied.
- OMB is enjoined from implementing, giving effect to, or reinstating under 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.
- Next steps – attorneys must work with DOJ attorneys and jointly purpose – by 2/7 – a briefing schedule for the court to consider a preliminary injunction.
January 29th: Funding Memo has been rescinded*
*It is important to note that while this is a win it is extremely important to stay vigilant, please share your stories with us in the event a new Executive Order is issued.
While the OMB memorandum was rescinded the Executive Order appears to remain in effect at this time.
Important Links:
- UPDATED (Feb 6th) WVNPA Statement
- Which Federal Programs are Under Scrutiny?
- National Council of Nonprofits Reacts to Rescinding of OMB Memo Ordering Funding Freeze
- The Impacts of the Recent Executive Orders on Nonprofits
- Share your organizations story with the National Council of Nonprofits
- Executive Orders Affecting Charitable Nonprofits – Updated by the National Council of Nonprofits
- National Council of Nonprofits Statement
- WVNPA Offical Statement
- Survey on how the federal grants pause will impact your organization
- Contact WVNPA Executive Director: rosemary@wvnpa.org
Reach out to your representatives:
- Senator Shelley Moore Captito: 202-224-6472, form to contact
- Senator Jim Justice: 202-224-2954, scroll to the bottom to find a form to contact
- Congresswoman Carol Miller: 202-224-3452, other ways to contact
- Congressman Riley Moore: 202-225-2711, other ways to contact
- Governor Patrick Morrisey: 304-558-2000
The federal Office of Management and Budget (OMB) sent a memo to federal agencies on the evening of January 27 ordering them to pause most of their grants and loans – including billions of dollars in grants to nonprofits – at 5 p.m. on January 28. The memo requires all federal agencies to pause issuing new grant awards, disbursement of funds under existing grants, and other relevant agency actions related to their grant programs. It also requires agencies to review their grant programs and report to OMB by February 10 on grants that are inconsistent with President Trump’s Executive Orders.
Thanks to a lawsuit led by the National Council of Nonprofits and other advocacy organizations, a federal judge issued an administrative stay minutes before the memo was set to take effect delaying the implementation of parts of the memo until at least Monday, February 3 at 5 p.m.
Here are answers to questions nonprofits have been asking:
Which federal funding streams are affected? Potentially, the pause applies to all (or at least most) federal grants to nonprofits and to state and local governments. The memo directs agencies to “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.” Because several of these terms are not clearly defined, it is possible that some or all federal agencies may interpret the memo to require a pause in virtually all of their grants to nonprofits. The memo does not apply to federal aid to individuals, including Social Security, Medicare, Medicaid, Supplemental Nutrition Assistance Program (SNAP), Pell grants, and rental assistance, so these payments should continue after 5 p.m. today. OMB has the authority to grant exceptions to allow agencies to grant new awards or make payments on a case-by-case basis.
How long will the pause be in effect? The memo is unclear on how long the pause in grants will be in effect.
Could this lead to the cancellation of existing grants? Potentially, yes.
Is there anything nonprofits with federal grants can do before the pause takes effect? The pause on grants doesn’t take effect until 5 p.m. on Monday, February 3. Some federal agencies may be willing to make advance payments to nonprofits before that time. If your nonprofit has a federal grant and is expecting a disbursement in the next few weeks, you may want to reach out to your grant administrator to find out whether you may be able to get your next disbursement before 5 p.m. on Monday, February 3.
Will this be challenged in court? It already has! The National Council of Nonprofits (NCN), along with small business and public health advocates, filed a lawsuit on January 28 asking the U.S. District Court for the District of Columbia to stop the implementation of the OMB memo. The lawsuit alleges that OMB’s memo is not allowed under the Administrative Procedures Act because it is: (a) arbitrary and capricious; (b) in violation of the First Amendment to the U.S. Constitution; and (c) beyond OMB’s statutory authority. The NCN lawsuit seeks a temporary restraining order and preliminary injunction that would immediately stop the implementation of the memo, along with a permanent injunction that would invalidate the memo. Shortly before the pause was set to take effect on January 28, the court issued an administrative stay delaying the implementation of parts of the memo until Monday, February 3 at 5 p.m. As the court explained in its ruling, “[a]n administrative stay ‘buys the court time to deliberate’ when issues are not ‘easy to evaluate in haste.'” The administrative stay ensures that federal agencies may continue to make disbursements to existing grantees through Monday, but it does not allow for the awarding of new grants. The parties to the lawsuit will submit additional briefs to the court this week so that the court can make a ruling on the merits of the case on Monday to determine whether to issue a preliminary injunction and temporary restraining order that would stop the implementation of the grants pause beyond Monday. It is likely that some state and local governments will file similar actions in federal court.
How can my nonprofit share the impact of the grants pause on our organization? To help understand the impact of the pause on federal grants, the WVNPA is asking nonprofits with federal funding to respond to this quick survey. Your responses will help the WVNPA best advocate for solutions to provide for continuity of federal funding.