Federal grant freeze fire drill leaves orgs scrambling to brace for Trump-era priorities

Less than 24 hours after a pause on federal grants and loans was put on temporary hold by a federal judge, the White House rescinded the memo that caused nationwide confusion.

“This is great news, but we’re but we’re not off the hook,” Delaware Black Chamber of Commerce president Ayanna Khan told Technical.ly. “We’ve got to stay vigilant and resilient.”

Still, under the Trump Administration’s priorities, federal grants will be reviewed. Programs, projects and activities that don’t meet the criteria set out on “ending DEI, the green new deal and funding nongovernmental organizations that undermine the national interest,” could still be on the chopping block, according to a White House fact sheet.

Now, with the official order revoked, the fire drill proved to nonprofits the need to prepare for President Donald Trump’s forthcoming orders.

“Can you imagine canceling federal grants and loan disbursements, what that’s going to mean?” said Khan. “The debt in our country is going to go up astronomically.”

On Monday night, the White House Office of Management and Budget (OMB) released a memo ordering a temporary pause on certain financial assistance programs to go into effect the next day.

In between an attorneys general lawsuit, other legal challenges and regional politicians across the country weighing in on how to move forward, organizations scrambled to address an order that would halt funding on everything from scientific research to SNAP food benefits. 

While the original order wouldn’t have included Supplemental Security Income and Medicare, where federal payments go directly to individuals, it would have hit federally funded services that go through the states, like Medicaid. 

Repercussions also would’ve fallen on universities, hospitals, nonprofits and construction projects so they could be reviewed to determine whether they are “consistent with the law and the president’s priorities.” 

Floods of uncertainty halt progress on new funding opportunities

The ramifications of the threat to cancel grant funding rippled throughout different sectors.

Technical.ly learned a county government executive called an emergency leadership meeting to assess what might be included. A national nonprofit serving entrepreneurs called their SBA representative, and fielded inquiries from at least small business owners. A state economic development agency canceled a meeting with outside stakeholders to decide if this order would affect them at all, and if so when. 

As a joint statement by colleges and universities in Delaware put it, “the disruption could be significant — not just for our respective university operations, but for students and families who rely every day on critical federal assistance,” Tony Allen, president of Delaware State University, Dennis Assanis, president of the University of Delaware, and Mark Brainard, president of Delaware Technical Community College, said.

Though the OMB memo caused confusion, it laid out a clear plan for the administration to review each federal grant, loan and other federal assistance to make sure it aligns with the new administration’s agenda.

There was a prevailing frustration of feeling like a political football among the regional organizations that Technical.ly spoke to.

Each felt their work fit neatly into bipartisan work — business growth and workforce attraction — but the sudden and vaguely defined order seemed more to manufacture crisis than make any meaningful change.

“Federal grant funding is critical to support many facets of our economy, protect vulnerable populations, and stimulate job growth,” Bill Provine, president and CEO of The Innovation Space, which has partnered with the federal government to fund over 130 startups and support over 900 jobs, told Technical.ly. “This funding acts as a force multiplier for impact upon our innovation economy; without it, we will undoubtedly miss out on scientific advancements that benefit humanity.”