Subsequent to our Not-for-Profit Industry Alert on January 28, 2025, a federal judge has temporarily blocked the temporary pause of agency grants, loans, and other financial assistance programs. The block is in effect until Monday, February 3, 2025.
A court hearing is scheduled for Monday, February 3 for oral arguments and only applies to the disbursement of government funds that have already been authorized. The pause is still able to freeze funding to new programs or stop funding which has already ended.
In addition, the Office of Management and Budget (OMB) released an update to their memo related to the temporary pause of agency grants, loans, and other financial assistance programs. This update noted that any program not implicated by the president’s executive orders is not subject to the pause. The relevant executive orders include:
- Protecting the American People Against Invasion
- Reevaluating and Realigning United States Foreign Aid
- Putting America First in International Environmental Agreements
- Unleashing American Energy
- Ending Radical and Wasteful Government DEI Programs and Preferencing
- Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government
- Enforcing the Hyde Amendment
The update also clarified that any program that provides direct benefits to individuals is not subject to the pause. This includes programs such as Social Security, Medicare, Medicaid, and SNAP. Additionally, specific programs such as funds for small businesses, farmers, Pell Grants, Head Start, rental assistance, and other similar programs will not be paused.
This remains a fluid situation, and we will keep you updated as more information emerges.
If you have any questions or would like to discuss how the federal funding freeze may impact your organization, please reach out to Katie Galaska, Director, Audit & Accounting, or any member of our Not-for-Profit Industry Group.