Resources Regarding OMB freeze on Federal Assistance

January 28, 2025 • By: MNA, Montana Nonprofit Association

UPDATE 2/4/2025:

Temporary Restraining Order granted against OMB

MNA has developed resources regarding OMB freeze on Federal Assistance to inform our membership.

On February 3, 2025, after a very successful hearing, the US District Court Judge Loren AliKhan, presiding over a case brought by a group of nonprofits, including the National Council of Nonprofits (NCN), granted another Temporary Restraining Order (TRO) against the administration’s attempt to halt federal grants and loans. The ruling can be found here.  In short: 

✖️ The U.S. Department of Justice (DOJ)’s motion to dismiss was denied.
✖️ The Office of Management and Budget (OMB) is prohibited from implementing, giving effect to, or reinstating under a different name the directive to halt federal spending broadly.
✖️ OMB must notify all federal agencies and instruct all such agencies to release any funding that was paused under the directive.

The hearing referenced real-life examples submitted via the NCN form about funding freeze impacts. These stories made a difference! If you have a story to tell, please complete this short form.

Next steps: 
NCN and the nonprofit coalition’s attorneys must work with DOJ attorneys to jointly propose – by this Friday, February 7 – a briefing schedule for the court to consider a preliminary injunction (i.e., court order that requires an entity to do or not do a specific action). 

Actions you can take now

Let the National Council of Nonprofits know how this will impact you

To help get a better sense of the real-world effects of the Executive Orders or the new freeze in federal funding, the National Council of Nonprofits set up a 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 at https://www.councilofnonprofits.org/form/effects-executive-actions-nonprofits and share that form with other nonprofits.

Have resources to share?

We have a thread going in our community forum for organizations and consultants to share resources as they become available. Join the community discussion

Take stock of your financial situation

Thank you to Barabara O’Reilly, CFRE for this great advice:

  1. Run cash flow and forecasting models for the next three to six months to see how this pause will affect you in the short-term (assuming it’s temporary). Also, run longer-term forecasting to see what happens if, in fact, this becomes permanent.
    1. You can use MNA’s Cash Flow Projection Template for this.
  2. With a solid grasp of financial possibilities, engage your leadership team in scenario planning so that you know how to scale back or change your service delivery, as needed.
    1. Budget and Scenario Planning
  3. Finally, and as importantly, communicate with your private donors TODAY. Be candid in what you know and don’t know. Tell them how you are leading your organization through this uncertainty. Thank them for being by your side and tell them you will keep them apprised of ways they can help. This can be done through 1:1 with top funders and donors and through wider email distribution.

Bring your board up to speed, along with those you serve, donors, and staff.

Feel free to start with this message:

On Monday, January 27, President Trump signed a memo that directed all federal agencies to temporarily suspend grants, loans, and assistance programs until those programs could be reviewed for compliance with recently issued Executive Orders. In short, federal agencies cannot pay out any money until they’ve passed the review. On January 28th, this memo was blocked by a federal judge, pausing the proposed funding freeze until February 3. Although funding is supposed to be flowing now, there is a distinct possibility that it will stop in the future. The situation remains unclear but we believe it may impact our ability to deliver services and programs. In the meantime we appreciate your support and invite you to [Insert call to action for board members, staff, or other stakeholders].

 

Common Questions & (some) Answers

There is a ton of confusion surrounding this directive, and unfortunately it will likely take some time before clarity is possible.  While we don’t have definitive answers – what we can say is that if you think your program might be affected, now is a good time to make plans for that scenario.

Q: Will my program be impacted?

A: While we can’t be sure, the scope of programs subject to review or a funding pause is broad. We recommend review the Guidelines for Federal Agencies to see if your program is listed.  

Q: Will projects already awarded but not spent be subject to pause or further review? 

A: There is the potential that funds already awarded but not spent will be subject to the funding pause or further review. 

Q: What about entities like NEA which have, for years, asked questions about DEI-related activities? 

A: The language on the memo suggests these grants will be reviewed given President Trump’s executive orders last week. 

 

What MNA is doing

MNA has been in contact with our members to understand potential impacts, as well as with state government and our congressional delegation to communicate the potential crisis this action could cause.

On Tuesday, January 28, we hosted a town hall with over 400 attendees to communicate with members about the developing situation and to answer questions as best we can.

We will continue to stay on top of the news as it develops and to communicate out to Montana nonprofits as we learn of developments that are likely to impact operations.

We are working to develop resources and guidance for organizations who find themselves facing suspended funding and the consequences of program closure.

Previous Updates

UPDATE 1/29/2025 11:00 AM

White House Rescinds Funding Freeze Memo

The White House on Wednesday formally rescinded a controversial memo that had ordered a freeze on federal grants and loans, NBC News reported.

The freeze, which had been set to take effect late Tuesday afternoon, was paused Tuesday by a federal judge to give her time to consider arguments challenging its legality.

The memo ordering the freeze had been issued by the Office of Management and Budget.

Acting OMB Director Matthew Vaeth, in a new memo issued Wednesday, wrote, “OMB Memorandum M-25-13 is rescinded. If you have any questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

Read a statement from Democracy Forward about the freeze rescindment.

A note from MNA: We want to reiterate – even if this means that the immediate threat is finished, we believe that the administration will continue to target programs that they believe are out of step with recent Executive Orders. It is of the utmost importance that organizations evaluate funding sources for potential targeting and make plans for what to do if federal funding for any of your programs is suspended. The resources below are a good starting point, and MNA will continue to add to this list and build tools to help guide you through worst-case scenario events to the best of our ability.

UPDATE 1/28/2025 3:13 PM

Federal funding freeze temporarily halted

U.S. District Judge Loren AliKhan granted a “brief administrative stay” that temporarily blocks the freeze on federal grants and loans. The administrative stay is in effect until Monday at 5 p.m. EST. The judge will hold another hearing Monday on whether to grant a longer pause.

This decision comes after a group of nonprofit organizations, including the National Council of Nonprofits (NCN), filed a lawsuit.

Separately from the nonprofits’ lawsuit, a number of state attorneys general, led by New York, also announced plans to sue over the federal funding freeze.

Learn more here: Judge temporarily blocks Trump’s plan to freeze federal aid 

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