Do you run a nonprofit that helps people – feeding families, providing housing, or teaching kids in underserved schools? Do you receive government funding? There is a potential nonprofit funding crisis looming that begins tonight. Funding will not be restored, if at all, until after February 10th, according to a memo from the Office of Management and Budget (OMB).
What’s in the Memo?
The memo (called M-25-13) orders federal agencies to pause grants, loans, and other financial programs so they can be reviewed. Why? To make sure taxpayer dollars align with President Trump’s priorities, like cutting costs, boosting energy production, and stopping funding for programs the administration doesn’t support—think diversity initiatives, climate action, or “woke” policies.
Here’s the deal:
- Federal agencies have to stop giving out new grants or loans and even pause money they’ve already promised for ongoing programs.
- Exceptions exist for legally required payments (like Social Security or Medicare), but there’s a lot of gray area for everything else.
- Agencies have until February 10, 2025 to submit a plan to the OMB detailing which programs should keep their funding and which shouldn’t. Who knows how long it will take for final determinations to be made.
This pause starts TONIGHT, January 28, 2025, and will likely create a nonprofit funding crisis.
How It Impacts Nonprofits
- Funding Stops (For Now). Nonprofits often rely on government grants to keep their programs running. Whether it’s housing, healthcare, or disaster relief, this funding is a lifeline. Without it, many programs could face delays, cutbacks, or even shut down. For example, a food bank funded by federal dollars might struggle to feed people during this pause.
- Programs Could Vanish. If your nonprofit’s work doesn’t align with the administration’s priorities, you could lose funding permanently. Organizations working in these areas may have to shift focus, cut services, or close their doors altogether.
- More Pressure on Donors. With federal dollars on hold, nonprofits will need to ask corporations, foundations, or individuals to step up and fill the gaps. This puts a lot of stress on everyone, especially as more organizations compete for the same private funding.
- Uncertainty Makes Planning Hard. Imagine trying to run a business without knowing if your paycheck is coming. That’s what this feels like for nonprofits. They don’t know when—or if—their funding will resume, which makes it nearly impossible to plan ahead or grow their impact.
What’s Next?
This funding pause highlights how closely nonprofits are tied to government policies. Organizations need to prepare for the worst, get creative with finding money, and even advocate for why their work matters.
