Friends in nonprofits and philanthropy,
Last night, the Trump Administration announced an immediate freeze of federal grant, loan, and other financial assistance funds related to the executive orders it has issued in the past week. We understand that this order impacts a large number of nonprofit organizations in Tennessee and, more importantly, the communities that they serve.
The Office of Management and Budget order requires that “to the extent permissible under applicable law, federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” While Congress holds the power of the purse and has authorized these expenditures, it is likely that the President has the power to “pause” spending, subject to review.
This action will effectively and “temporarily” halt, as of 5pm today (1/28), many billions of dollars in federal grants and loans to organizations across the country. The memo specifies that Social Security, Medicare, and “payments to individuals” will not be affected, but appears to leave many other federal payments in jeopardy — including grants and loans issued to charities, research bodies, community projects, and all types of nonprofits. A review of spending to ensure alignment with the Administration’s priorities will ensue. Agency officials have until February 10 to submit reports for OMB’s consideration.
The White House is planning a press briefing at 1:00p.m ET.
The text of the order is here. It raises large constitutional questions, and lawsuits are sure to come. We expect that this order will be challenged in court. Tennessee Nonprofit Network is working with our partners in the nonprofit, legal, and civic communities to provide updates as quickly as possible.
Please be patient with us as we work to interpret and disseminate information about this new directive. We will provide updates as they become available. Please be sure to visit our blog for the most current updates.
Sincerely,
Kevin Dean
President & CEO
Tennessee Nonprofit Network