“This order could decimate thousands of organizations and leave neighbors without the services they need.”
— Diane Yentel, president of the National Council of Nonprofits on President Trump’s directive to halt federal grant payments
In a surprise move on Monday evening, the Trump administration said it would pause all grants and loans disbursed by the federal government. Nonprofits scrambled for information and took legal action the following day, reports my colleague Alex Daniels.
Declaring that a Trump administration freeze on federal payments will have “catastrophic consequences” for charities that rely on government support, a coalition of nonprofits petitioned a federal judge Tuesday to block the Office of Management and Budget’s “temporary pause” of federal grants, loans, and assistance programs. Tuesday afternoon, the court ruled that the administration’s planned payment pause cannot go into effect without further review.
The complaint was filed with the U.S. District Court for the District of Columbia by Democracy Forward, a group consisting of the National Council of Nonprofits; the American Public Health Association; the Main Street Alliance, a small business network; and SAGE, an LGBT advocacy group. The complaint came within 24 hours of the payment stoppage being made public through news reports, rather than a formal announcement from the Trump administration.
“This memo — made public only through journalists’ reporting, with barely twenty four hours’ notice, devoid of any legal basis or the barest rationale — will have a devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money (money already obligated and already awarded) to fulfill their missions, pay their employees, pay their rent — and, indeed, improve the day-to-day lives of the many people they work so hard to serve,” the Democracy Forward filing reads.
In the OMB memo, Matthew Vaeth, the agency’s acting director, directed federal agency heads to investigate whether their grants aligned with the new administration’s mission to get taxpayers relief in the face of inflation, create a safer country, and “ending ‘wokeness’ and the weaponization of government.”
The OMB directive, which follows President Trump’s January 21 executive order meant to curtail diversity, equity, and inclusion programs both inside and outside the federal government, says the pause in payments is temporary. Agency heads were given until February 10 to report to political appointees whether their activities were in step with the Trump agenda.
Wrote Vaeth: “The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
The memo has sent nonprofits into a rush to find out if their funding will be cut, diverting staff time and resources to communicate with their beneficiaries what that means, said Beth Gazley, professor at Indiana University’s Paul H. O’Neill School of Public and Environmental Affairs.
Nonprofit leaders said the seriousness of the freeze could not be overstated. Diane Yentel, president of the National Council of Nonprofits, called it a potential “five-alarm fire.”
“This order could decimate thousands of organizations and leave neighbors without the services they need,” she said in a statement.
For more on this breaking news story, read the rest of Alex’s story, and look for updates in Philanthropy Today if more news breaks.
MacKenzie Scott inspires more big donors. A tech mogul, inspired in part by philanthropist MacKenzie Scott, is itching to give away his money — quickly. Jeff Atwood, computer programmer, blogger, and entrepreneur, pledged to give away half his family’s wealth over the next five years, reports my colleague Eden Stiffman.
He plans to put tens of millions of dollars toward “efforts ensuring that all Americans continue to have access to the American Dream.” Atwood, who grew up with modest means, co-founded the question-and-answer network Stack Exchange, which contains the popular Stack Overflow forum for developers. The site sold in 2021 for $1.8 billion, turning Atwood and dozens of his colleagues into millionaires.
“I lived the American Dream,” Atwood said in an emotional interview. “The American Dream doesn’t end with you getting rich. It ends with you helping everyone else get to where they need to be too,” he said, breaking into tears. He went on to say he wished “more rich people would really stand up and do this.”
For more on Atwood’s plan and his past giving history, readEden’s entire story.
