A U.S. District Court judge blocked the Trump administration’s effort to pause federal grant funding to state governments and nonprofit health and human service providers on Tuesday, January 28th, at 5 p.m. ET.

The memo calls for federal agencies to submit “detailed information on any programs, projects or activities subject to the pause” by February 7, 2025. The required information is in a spreadsheet that lists more than 2,000 programs that agencies must determine if any funding is related to undocumented immigrants, climate policy, diversity programs, or abortion. The list can be viewed in a summary on the New York Times website. The “Instructions for Federal Financial Assistance Program Analysis in Support of M-25-13” can be viewed on Politico.

Minutes before the Office of Management and Budget (OMB) memo temporarily freezing trillions of dollars of federal aid was set to take effect, Judge Loren AliKahn granted a “brief administrative stay” to preserve disbursements until Monday, February 3rd, at 5 p.m. EST. The judge will hold another hearing on Monday to decide if another injunction is needed. This means that disbursements for existing grants may continue, but new awards may not.

Further clarity was offered by the White House regarding the intent of the freeze and claiming that programs that directly support individual Americans would not be impacted, despite evidence that funds for Head Start and Medicaid programs had been frozen. The memo can be viewed on Politico.

Less than 24 hours after federal agencies received the OMB memo, the National Council of Nonprofits, the American Public Health Association, and other advocacy organizations filed a temporary restraining order and preliminary injunction to halt its implementation. Separately, attorneys general from 22 states and the District of Columbia are seeking a court order to stop enforcement of OMB’s grant funding policy.

In an unprecedented move that could cripple vital health and human service programs across the country, the federal funding freeze, issued Monday, directs federal agencies to temporarily stop trillions of existing and new federal grant/loan dollars across all federal departments.

According to the memo:

• Federal agencies “must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance,” including grants, cooperative agreements, non-cash contributions, direct appropriations, food commodities, loans, loan guarantees, interest subsidies, and insurance.
• The pause also applies to “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.”
• Applications in the federal grant review process will also be suspended.
• By Feb. 10, 2025, all federal agencies are required to submit a list of programs to OMB that are not in alignment with President Donald Trump’s executive orders, which includes programs involving immigration, climate and energy, gender identity, abortion, and diversity, equity, and inclusion (DEI).
• The temporary freeze will not impact “assistance provided directly to individuals,” such as Medicare and Social Security.
• OMB will consider exceptions on a case-by-case basis.

According to a CNN report, federal agencies will be required to review more than 2,000 programs “to document whether each program has any funding related to undocumented immigrants, climate policy, diversity programs or abortion.”

Response to Federal Funding Pause

Following an outcry from governors and nonprofits alike, OMB issued a guidance memo Tuesday afternoon explaining the funding pause:

• Is limited to “programs, projects, and activities implicated by the President’s Executive Orders, such as …funding nongovernmental organizations that undermine the national interest.”
• Does not include “mandatory programs,” like Medicaid and SNAP, as well as funding for “small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs.”

However, given that terms like “woke gender ideology” have no clear definition, it is possible that federal agencies may be over-inclusive and pause funding on all or almost all grant or loan programs out of an abundance of caution.

Significant funding disruptions will impact:

• Healthcare Providers: public health programs, research, community health center funding, rural healthcare initiatives, prevention and wellness programs, health technology innovations
• Nonprofits: community and workforce development efforts and social service delivery programs.
• State Governments: community development block grants, economic development programs, and infrastructure projects
• Tribal Governments: healthcare services, youth programs, community, and economic development initiatives

Filling Federal Funding Gaps

Adjudicating the Trump administration’s new policy may take days, weeks, or months. But there is no time to waste — safety net health and human service providers, as well as state government agencies, must act now:

• Advocacy: Tell members of Congress precisely how a lack of federal grant/loan funds will impact your organization. Be prepared to tell a short, compelling story about the impacts of this sweeping policy on real people and the economic impact on the community. Engage with your state’s Attorney General and Office of the Governor as well.
• Organizations in North Carolina can respond to this survey explaining the impact of the federal grants pause on their community and organization. Look for similar opportunities in your state.
• Federal funding assessment: Document all federal funding streams to understand potential program vulnerabilities and review cash flow implications and staffing needs to prepare for delays and adjustments.
• Communications: Brief clients/constituents and key stakeholders in clear, concise, and assessable language about potential impacts and next steps.
• Program assessment: Develop contingency plans for critical services; evaluate program alignment with the Trump administration’s policy priorities; and find alternative funding sources (i.e., philanthropy).

Atrómitos is here to help.

We know the incredible contributions that safety-net health and human service providers make in their communities and their work to improve the health and well-being of the people they serve.

Contact us with any questions you may have (425-494-9298 or info@atromitosconsulting.com). We will continue to share helpful information about this rapidly changing federal policy change as it becomes available.

Additional sources of important and valuable information include:

• National Council of Nonprofits: https://www.councilofnonprofits.org/
• American Public Health Association: https://www.apha.org/
• National Association of Community Health Centers: https://www.nachc.org/