By Helen Coster and Nathan Layne
(Reuters) – U.S. President Donald Trump’s administration ordered a pause on all federal grants and loans starting on Tuesday, a sweeping decision that could disrupt funding for education, healthcare, poverty programs and a host of other initiatives that depend on federal dollars.
The National Council of Nonprofits, along with other allies, filed a lawsuit over the directive on Monday, and a federal judge ordered the Trump administration not to block funding to existing programs until a hearing on Feb. 3.
Here is how some nonprofits and affiliated groups are reacting to the Trump administration’s order:
NATIONAL COUNCIL OF NONPROFITS CEO DIANE YENTEL
“This order is a potential five-alarm fire for nonprofit organizations and the people and communities they serve.”
“From pausing research on cures for childhood cancer to halting food assistance, safety from domestic violence, and closing suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives. This order could decimate thousands of organizations and leave neighbors without the services they need.”
NATIONAL FAMILY PLANNING & REPRODUCTIVE HEALTH ASSOCIATION CEO CLARE COLEMAN
“Yesterday’s federal funding freeze threatens the nationwide network of health centers that rely on these resources to provide family planning services to people with no or low incomes.”
“Even a temporary funding pause could cause significant disruption to clinic operations, jeopardizing patients’ access to contraception, cancer screenings, STI and HIV services, and other essential reproductive health care.”
“For many patients, Title X-funded health centers serve as their sole source of health care. The Title X family planning program is already chronically underfunded, and this executive action risks destabilizing a health provider network that is already operating under immense strain. These funding disruptions could push some health centers to the brink of closure, leaving vulnerable patients without access to the care they need.”
LEWIS & CLARK REGIONAL WATER SYSTEM
Lewis & Clark Regional Water System, a nonprofit provider of water to parts of South Dakota, Iowa and Minnesota, is counting on federal funding to complete the final phase of a water treatment plant being built at a total cost of $104 million.
Troy Larson, the nonprofit’s executive director, said he was hopeful they would soon be given approval to draw down on already appropriated funds for the project, as it does not appear to be the type of spending targeted by the pause.
“Based on everything we’ve read. We are not a target,” Larson told Reuters. “But we don’t know how long this will last, and in the meantime we have to figure out how to pay our contractors so that construction can continue.”
Larson said a stop to funding lasting several months could force it to seek a line of credit or use its reserves to keep the contractor working, measures that would increase its costs. A prolonged freeze would be “extremely problematic,” he said.
CLEVELAND CLINIC
Cleveland Clinic, a world-renowned research and medical center in Ohio, said it was monitoring the situation closely. Roughly half of the nonprofit’s $303 million in external grants came from federal sources in the 2023 calendar year.
“Research is a crucial component of Cleveland Clinic’s mission. We are actively monitoring actions related to federal funding and assessing potential impacts. Current research projects are continuing at this time,” it said in a statement.
MEALS ON WHEELS
Meals on Wheels America spokesperson Jenny Young said it was unclear how the directive would impact their programs given that the law governing grants for senior nutrition programs sends funding through states onto community-based groups but does not give food money directly to individuals.
If OMB’s order does include the Older Americans Act, it could “halt service to millions of vulnerable seniors who have no other means of purchasing or preparing meals,” Young said.
The uncertainty is “creating chaos” for community entities providing meals, “which unfortunately means seniors may panic not knowing where their next meals will come from,” she said, adding that “local providers don’t have the ability to absorb a blow like this.”
HEAD START
Head Start grant recipients are currently not able to draw down any funds, according to the nonprofit organization, which provides early childhood education to low-income children.
In a statement on Tuesday, Yasmina Vinci, executive director of the National Head Start Association, said that the order “has the potential to severely disrupt the ability for Head Start programs to serve nearly 800,000 children and their families nationwide.”
(Reporting by Helen Coster and Nathan Layne; Editing by Frank McGurty and Jamie Freed)
