Information Sharing on the Federal Funding Freeze
The federal grant landscape has been undergoing significant changes following recent executive orders and directives from the administration. Many organizations and nonprofits are seeking clarity on how these changes impact their funding opportunities and ongoing projects. In this post, we break down what has happened, what it means, and what to expect moving forward, based on a discussion by Tonia Brown-Kinzel from The Grant Plant. Watch the video below and a link to resources is at the end of this post. A summary of the discussion follows.
Who We Are and Why This Matters
The Grant Plant is a national grants consultancy firm based in Albuquerque, New Mexico. While many of our clients are local, we also serve organizations across the country. Our work spans the full grant lifecycle, from identifying opportunities and writing proposals to post-award grant management. Given our field of service, we’ve been closely following what has been called the federal funding freeze and its implications for nonprofits and federal grantees.
What Has Happened?
Since January 20th, the new administration has issued multiple executive orders that affect federal funding. The most significant development occurred on January 27th, when the Office of Management and Budget (OMB) issued memorandum M-25-13, which directed a pause on federal financial assistance obligations and disbursements. This led to immediate concerns among grantees and potential recipients.
However, on January 28th, two lawsuits were filed challenging the freeze: one by four nonprofits in the U.S. District Court for the District of Columbia, and another by 22 states and the District of Columbia in a U.S. District Court in Rhode Island. That same day, OMB released a clarification stating that the freeze did not apply to all funding, only to programs potentially impacted by the administration’s executive orders.
A temporary stay was placed on the funding freeze, and on January 29th, OMB rescinded M-25-13 with memorandum M-25-14. Despite this, the White House Press Secretary stated that the funding freeze itself had not been rescinded—only the memo. The administration signaled that it will still move forward with its plans to reassess federal grant funding according to its priorities.
Key Areas Affected
The administration’s executive orders and subsequent guidance indicate that federal funding may be affected in several key areas:
- Diversity, Equity, Inclusion, and Accessibility (DEIA):
- Federal DEIA programs and related training will be eliminated.
- Federal contractors and grantees must certify that they do not operate programs promoting DEIA principles.
- Agencies are required to identify DEIA-related funding for potential removal.
- LGBTQ+ and Gender-Related Policies:
- Federal grant funds cannot be used to promote “gender ideology.”
- Agencies must ensure that grant funds do not support LGBTQ+ initiatives that do not align with the administration’s policies.
- Immigration-Related Funding:
- Federal grants supporting non-governmental organizations that assist undocumented immigrants may be revoked.
- Federal assistance to sanctuary cities will be evaluated and potentially restricted.
- Environmental and Energy Funding:
- The administration has moved to terminate funding for Green New Deal-related initiatives.
- Some funding from the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) has been paused or rescinded.
- Electric vehicle subsidies and charging infrastructure projects are being reassessed.
- Foreign Aid and Humanitarian Assistance:
- A 90-day pause was implemented for all foreign aid disbursements.
- Emergency humanitarian assistance, including food and medical services, was later exempted via a waiver issued by the Secretary of State.
- Reproductive Health and Abortion-Related Funding:
- Two executive orders expanding access to abortion and reproductive healthcare were rescinded.
- Federal taxpayer dollars are being restricted from funding abortion-related services.
- Other Areas of Interest:
- Federal censorship policies are being reviewed to ensure they do not restrict free speech.
- The White House Office of Faith-Based and Neighborhood Partnerships has had its functions redefined.
- Federal funding for the arts, humanities, and museum initiatives has been reconsidered following the rescission of a related executive order.
What Does This Mean for Grant Seekers?
Many organizations are wondering how these changes will impact current and future grant applications. While the full extent of these changes is still unfolding, here are some key takeaways:
- Existing federal grants that conflict with the administration’s priorities may be canceled or modified.
- New grant opportunities may be delayed as agencies conduct internal reviews.
- Organizations that focus on affected areas (DEIA, environmental programs, immigration services, etc.) should carefully monitor further policy updates.
- Applicants may need to reconsider language and program framing in proposals, though the administration has indicated it will monitor attempts to “repackage” programs.
Next Steps and How to Stay Informed
Given the fast-moving nature of these developments, it is crucial for organizations to:
- Stay Updated: Follow official government announcements, court rulings, and guidance from OMB and federal agencies.
- Review Existing Grants: Assess whether your organization’s grants could be subject to new scrutiny.
- Be Strategic in Applications: Ensure compliance with evolving federal priorities when applying for future funding.
- Seek Legal and Professional Guidance: If your organization is directly impacted, consider consulting with legal experts or grant professionals to navigate potential funding changes.
Final Thoughts
These are challenging times for federal grantees, but staying informed and proactive is key. As The Grant Plant continues to monitor the situation, we encourage organizations to focus on the facts, seek clarity where needed, and adapt to the evolving grant landscape.
If you have specific questions or concerns, feel free to reach out. Our team is committed to providing accurate and nonpartisan information to help navigate these changes effectively.
Federal Grants Freeze – Resource Links
This post was filed under: Federal Grants