As our members are aware, the Trump Administration’s actions this week around federal funding assistance have caused no small amount of disruption and confusion across the country. A funding freeze communicated via a memo from the Office of Management and Budget (OMB) on January 27 had the potential to impact more than $3.2 trillion in federal grants, loans, and financial assistance that supports critical community services and programs. While the White House rescinded the original OMB memo on January 29, the Administration has indicated that broader executive orders around federal spending remain in effect.
In service of our members, Workforce Matters is sharing information and recommendations from the United Philanthropy Forum below and is hosting a peer learning strategy session with our funder members on Thursday, February 13 to discuss areas for collaboration and action.
Where Things Stand Now
- The immediate funding freeze has been lifted.
- However, the executive orders underpinning the freeze remain in effect, meaning future restrictions on federal spending are still possible.
- Federal agencies are navigating ongoing policy changes.
- Many nonprofits and government partners remain uncertain about how executive actions will impact their funding.
- Legal and policy battles may continue.
- While the memo was withdrawn, federal courts are still evaluating whether the administration’s broader funding restrictions effectively impose a freeze in practice.
Why This Matters for Philanthropy
- Potential Disruptions for Grantees: Many nonprofits rely on federal funding to sustain essential services, from housing to healthcare to workforce development. If new restrictions are imposed, foundations may see increased demand from grantees seeking emergency or replacement funding.
- Impact on Public-Philanthropic Partnerships: Many foundations collaborate with government agencies through public-private partnerships. Uncertainty in federal funding could disrupt joint initiatives and make long-term planning more difficult.
- Philanthropy as an Advocate: Foundations play a critical role in ensuring that public funding remains accessible to organizations serving communities. This moment underscores the need for continued advocacy to protect and strengthen nonprofit funding streams.
Source: United Philanthropy Forum, January 30, 2025
So what can workforce funders do?
- Reach out to your grantees and nonprofit partners to understand potential impacts on the communities you serve. Maintain open communication with grantees about their federal funding status and potential needs.
- Examine your grantmaking practices to ensure you can respond nimbly if federal funding gaps emerge. Consider adjusting reporting deadlines and other requirements to provide more flexibility to grantee partners.
- Convene other funders in your region and consider collaborating to fill critical gaps if federal funding becomes unstable.
- Provide support to your grantees to help them develop contingency plans and build financial resilience.
- Work with advocacy partners locally and nationally to push for greater transparency in federal funding decisions.
- Communicate the impact of potential funding restrictions on your community and on the charitable sector to policymakers.
Workforce Matters is committed to continuing to provide updates and information to support your work and to holding space for our funder members to share, collaborate, and advance equity through workforce grantmaking. To participate in our peer learning session on February 13, please sign up here. If you are interested in partnering with us to plan, host or coordinate conversations among our funder members, please let us know.
One more thing. We get that you might be feeling exhausted and overwhelmed during these times. There is so much to do, so many things to react and respond to. We recently read this piece in Medium and wanted to share its wisdom with you. Perhaps especially now, we'd like to encourage all of us to take a breath. To step back, think about the world we want to collectively create, examine where each of us has the heart and energy to lean in, and find how we can work in community.
