A Trump administration order to freeze as much as $3 trillion in federal financial assistance was temporarily blocked just before it was set to go into effect, yet the notice has caused widespread worry and confusion among nonprofits, states, schools and hospitals.
The order called for a pause in federal funding for a sweeping range of programs, projects and activities that may be impacted by the blizzard of executive orders issued in the first days after President Trump’s inauguration. The freeze on federal grants and loans, which was set to start at 5 p.m., Tuesday, Jan. 28, was blocked by a federal judge who sided with the activist group Democracy Forward, which contends the order is illegal.
A more permanent decision is set for Feb. 3. Meanwhile, attorneys general in 22 states and the District of Columbia have filed a separate lawsuit.
The order came in a memorandum from the Office of Management and Budget (OMB). It states that agencies are ordered by Feb. 10 to submit a comprehensive analysis of impacted programs to OMB, which will then review the list and provide the agency guidance on next steps. Reviews of new federal grants have been paused as well.
The National Council of Nonprofits, which represents 30,000 member organizations, has compiled a list of executive orders that impact charitable nonprofits. The OMB also provided a spreadsheet of 2,600 federal programs that are under scrutiny.
The OMB memo spells out that Medicare and Social Security benefits will remain in place.
How Can CBM Help?
A broad range of organizations rely on grants and loans to fulfill their missions, and the memo raises numerous questions about the ramifications that so far have gone unanswered.
One of the biggest everyday challenges non-profits face is adequate cash flow. Nonprofits make budget decisions based on their expected cash flow and plan years in advance. Continuing to provide services without federal funding, even temporarily, is likely to be difficult.
CBM offers customized services for nonprofits, including budgeting and cash flow management and analysis.
CBM’s team of not-for-profit experts is ready to help your organization chart its course through the challenges ahead. We will also keep you advised of developments as they unfold.
Please reach out to us with any questions on our online contact form or contact Julia Lafferty.
