The Trump administration, the day after directing agencies to implement a temporary freeze on federal financial assistance, has rescinded its order, which sparked consternation and confusion throughout the nonprofit community.
The pause on federal grants and loans, which would have also impacted states, schools and hospitals, was set to start at 5 p.m., Tuesday, Jan. 28. A federal judge temporarily blocked the order just before it was to go into effect and the White House reversed itself and rescinded it the next day.
The order called for a pause in as much as $3 trillion 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 order came in a memorandum from the Office of Management and Budget (OMB). It stated 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.
While nonprofits celebrated the news, White House Press Secretary Karoline Leavitt asserted that only the OMB memo was rescinded. “The President’s EO’s (executive orders) on federal funding remain in full force and effect and will be rigorously implemented.”
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.
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A broad range of organizations rely on grants and loans to fulfill their missions, and the flurry of activity around federal funding has raised fears about what the future may bring.
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 challenging.
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