Late on Monday, January 27th, the White House issued a vague two-page memo directing federal agencies to pause “all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated” by a recent spate of executive orders. The pause was to begin on Tuesday at 5 PM, without any official notice having been circulated to affected recipients, to members of Congress, or to the general public.
These funds had all been previously allocated by Congress and the previous Administration.
The White House stated that the purpose of this pause was to review agency programs and determine if they aligned with President Trump’s Executive Orders. This created widespread confusion and chaos here and across the country, as thousands of educational & research institutions, hospitals, municipalities, states, and of course, nonprofits receive at least $3 trillion in federal grants every year. Grants from the federal government fund critical work related to housing, childcare, healthcare, food insecurity, and so much more.
But we wanted to assess just how significant of a problem this funding freeze would create. So on Tuesday morning, we sent out a survey asking our members what the impact would be on the work they do and the people they employ and serve.
This sweeping and unclear directive would have potentially forced many of our members to make difficult decisions about cutting programs, laying off staff, and even remaining open. From the 68 responses we’ve received thus far, $165 million are at risk.
On Tuesday afternoon: OBM circulated a Question and Answer to members of Congress, clarifying that direct payments to individuals would be exempt from the freeze. But there continued to be uncertainty about what grants and programs would be impacted and how grants would be reviewed by this Administration. Concurrently, widespread problems with the federal payment system (including challenges all 50 states had accessing the Medicaid web portal) made us all question whether the Q&A document accurately reflected the reality on the ground.
At least two lawsuits were filed to block the federal grant funding freeze, including one by State Attorneys General and another by Democracy Forward on behalf of the National Council of Nonprofits, Mainstreet Alliance, the American Public Health Association, and SAGE.
Our Board of Directors released a statement explaining the detrimental effect this would have in Franklin County and calling on Ohio’s representatives in Congress to implore the Administration to continue the flow of federal grant dollars. We also held space for our members to come together as they grappled with the existential questions this memo forced so many around our nation to consider.
Around 1pm on Wednesday, the White House formally rescinded the memo freezing federal grants.
While we are grateful that the memo was rescinded, the White House immediately sowed more confusion when the Press Secretary published a vague statement insisting that the federal funding freeze was still in effect. This statement was immediately used against the federal government in the other legal challenge against the funding freeze.
And now, on Wednesday afternoon, we’re awaiting whatever comes next.
As Executive Director Michael Corey told The Columbus Dispatch: “Nonprofits will continue doing everything they can to fight to serve the people that they are entrusted with serving. We know with this new Administration that funding to and through nonprofits to the people they serve is going to be much more precarious and we have to be ready to stand up for the people we serve accordingly.”
On Thursday, January 30, in partnership with the Center for Community Solutions and Advocates for Ohio’s Future, we issued the following statement:
For more information on HSC’s advocacy, please see our most recent press engagements:
- January 28: Millions in funding at risk as Columbus nonprofits scramble to deal with potential Trump pause | The Columbus Dispatch
- January 28: ‘Chaos’: Franklin County executive director reacts to Trump’s funding freeze | 10TV News
- January 28: How potential federal grant pause could impact central Ohio organizations | NBC4
- January 29: Uncertainty, confusion persist for local nonprofits even after Trump funding memo rescinded | The Columbus Dispatch
- January 30: How a federal grant freeze would affect Ohio nonprofits | Spectrum News