June 17, 2025

Information Sharing on Federal Funding: Update June 17, 2025

This post offers updates on where things stand with the federal funding freeze. There’s a lot at stake, legal challenges are unfolding, and it all affects the nonprofits doing essential work across the country. 

For more information, here is a tracker on federal funding that has been frozen.

Subcommittee Hearing “Public Funds, Private Agendas: NGOs Gone Wild” Recap

The federal funding freeze is already having a big and harmful impact on the nonprofits that hold our communities together. A June 4, 2025 congressional hearing on “government efficiency” made it clear: this isn’t really about cutting waste. It’s about politics. Nonprofits are being targeted not for mismanagement or fraud, but for the types of communities they serve—immigrants, low-income families, and marginalized groups. During the hearing, Rep. Marjorie Taylor Greene painted nonprofits as part of a vast political scheme, while New Mexico’s own Rep. Melanie Stansbury called out the real harm being done: fewer meals served, fewer shelters open, fewer programs for youth, immigrants, and families in need. Many of these organizations are small, local, and nonpartisan. They fill critical gaps in care and connection where other systems fall short. 

As we’ve seen with our clients and the work they do every day, freezing funds midstream doesn’t increase efficiency. It causes harm. When vital programs are halted, real people suffer. It undermines trust in public institutions, destabilizes frontline services, and punishes communities that already face the steepest challenges. Our nonprofits are doing their jobs; we urge our readers to advocate for restoring funding and protecting the organizations that care for our communities. 

If you don’t have time to watch the full 2.5 hours, here are some key points made:

  • The funding freeze is real and already harming communities. Nonprofits across the U.S.—including in New Mexico—are reporting lost or delayed federal dollars, forcing them to reduce services like food assistance, youth programs, and health care.
  • This isn’t about “government efficiency.” According to Rep. Melanie Stansbury, the freeze is a politically motivated effort by the Trump administration to target nonprofits they disagree with ideologically, especially those working on immigration, civil rights, and poverty.
  • Nonprofits are being threatened with loss of tax-exempt status. Legal experts and witnesses confirmed: the executive branch does not have the authority to revoke 501(c)(3) status based on political disagreement. Doing so would be illegal and unconstitutional.
  • Most nonprofits are small, local, and nonpartisan. Over 90% of nonprofits have budgets under $1 million. They operate with transparency, serve all communities, and are often the only providers of critical services in rural and underserved areas.
  • The risk is especially high for states like New Mexico. In a state where nonprofits are essential to filling gaps in health, education, and safety nets, losing federal support would have an outsized and deeply damaging impact.
  • The public is being misled about how federal funding works. Despite claims of “waste,” the freeze has affected high-performing, long-standing organizations—not just newly formed or politically connected ones.

GPA Signs on to the Community Impact Coalition Letter

As members of the Grant Professionals Association (GPA), we’re proud to share that GPA has joined over 100 organizations in signing a joint letter opposing the federal funding freeze and calling for immediate action to protect nonprofit funding. The letter supports the value of 501(c) organizations and advocates against proposals that would eliminate their tax-exempt status or divert resources away from their missions through additional taxation. The letter highlights the widespread harm this freeze is already causing to communities nationwide and urges Congress to restore funding for programs that support everything from housing and food assistance to youth and mental health services. It’s a powerful show of unity from the nonprofit and grantmaking communities, and a reminder that these decisions are not abstract. They impact the people and places we serve every day. You can read the full letter here.

This joins another letter that GPA signed onto written by the Council on Foundations, Independent Sector, National Council of Nonprofits, and United Philanthropy Forum, which is about the “One Big Beautiful Bill Act.” The letter calls for several harmful provisions to be removed. They are encouraging nonprofits, foundations, and others to sign on, which you can do here.

This post is part of our ongoing series tracking federal funding changes, their impacts, and resources for adaptation. Subscribe to stay informed, and please share with colleagues or partners who may benefit. If you have resources to include, please let us know via mail@thegrantplantnm.com.

 

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