Memo issued by the White House puts funding for every nonprofit at risk (again)

A barely noticed memo issued by the White House puts funding for every nonprofit at risk.

‍“I therefore direct the heads of executive departments and agencies (agencies) to review all funding that agencies provide to NGOs. The heads of agencies shall align future funding decisions with the interests of the United States and with the goals and priorities of my Administration, as expressed in executive actions…”

This memo directs all federal agencies to review all funding to Nongovernmental Organization (NGOS) and to align future funding with the “goals and priorities” of the Administration, as stated in Executive Orders.  

Reviving the directives of the federal funding freeze

Under this directive, federal agencies will likely restart the analysis which was paused when OBM memo (M-25-13) “Temporary Pause of Agency, Grant, Loan, and Other Financial Assistance Programs” was rescinded.

Clearly, the Administration intends to defund any organization that does not fall into line.

While the term NGO is typically used to describe international or foreign organizations, other information makes it very clear that domestic organizations fall under this umbrella. A fact sheet released by the State Department on inauguration day outlines this Administration’s definition of NGO:

“Approximately 1.5 million NGOs operate in the United States. These NGOs undertake a wide array of activities, including political advocacy on issues such as foreign policy, elections, the environment, healthcare, women’s rights, economic development, and many other issues. They often develop and address new approaches to social and economic problems that governments cannot address alone.”

Later, the memo explicitly states that nonprofits are NGOs with tax exempt status.  

Who gets funding and who decides?

Under this memo, the Administration can pick which organizations receive funding and which are blocked for any reason they see fit with no other oversight. Congressional appropriations bills define the buckets and amounts of federal funding, while federal agencies issue grants or contracts to carry out those purposes using the dollars specified.  

Outside of Congressionally Directed Spending (earmarks), who gets funding is entirely decided by federal agencies. It is not yet clear whether Ohio’s two new Senators will participate in the earmark process and submit projects from Ohio. Sherrod Brown did, J.D. Vance did not. There is currently a sign-on letter circulating urging Ohio’s Senators to continue to submit these requests as part of the annual federal appropriations process.  

Organizations can read the letter and add their name.

While Congress holds the purse strings, the Administration writes the checks. The Administration must follow the directives of Congress, but most appropriations language is loose and open to wide interpretation. Unless future congressional appropriations bills are written with much greater specificity, any nonprofit could be immediately defunded, and the courts and Congress will have little recourse.