On Monday night, a memo from the White House’s Office of Management and Budget triggered widespread confusion among nonprofit organizations nationwide, including in Montana. By Tuesday noon, these agencies were scrambling for clarity, unsure if they should cease operations due to a potential funding freeze. The memo outlined President Donald Trump’s plan to scrutinize all federal spending, temporarily halting funds potentially reaching billions or trillions of dollars. Although exceptions were mentioned for individual payments like Medicaid and Social Security, nonprofit and healthcare officials reported disruptions in funding streams.
The Trump administration mandated federal agencies to “identify and review all federal financial assistance programs and related activities” based on presidential policies, even affecting existing contracts. Reviews will be conducted by political appointees on a case-by-case basis. An emergency lawsuit filed in Washington D.C. paused the funding freeze until 5 p.m. Monday.
Despite the legal intervention, nonprofit leaders remained unsettled, seeking more information. Attempts to contact federal employees were redirected to the White House’s OMB, leaving many questions unanswered. Cindy Stergar from the Montana Primary Care Association noted that some funding portals like Head Start had reopened temporarily by early afternoon.
“We just don’t have a lot of answers right now,” Stergar stated. “I have been working in this field for a long, long time and I have never seen anything like this, where it’s just a blanket order.”
Before the court’s intervention, the White House directive gave organizations roughly 24 hours to submit current expenses. Federal spending reviews would commence thereafter, requiring submission of plans and budgets by Feb. 10. Some were informed funding might be delayed until mid-March, about 45 days away. The White House later clarified it was targeting programs related to DEI, immigration, and foreign aid, but most federally funded nonprofits were affected.
Montana Nonprofit Association, part of the broader National Nonprofit Association, challenged the order in court. Executive Director Adam Jespersen reported being overwhelmed with calls, highlighting that 11% of Montana’s economy relies on the nonprofit sector. “It is complex with many, many impacted,” Jespersen stated, emphasizing the necessity for clarity.
Kelsen Young, Executive Director of the Montana Coalition Against Domestic and Sexual Violence, warned of potential risks to public safety, as the funding freeze could hinder services for abuse victims. Young expressed concerns over the indefinite duration of the review, stating, “It appears that most of the funding will be frozen without an end date.”
Montana Superintendent of Public Instruction Susie Hedalen’s office confirmed the pause affected discretionary Department of Education grants, but not Pell grants or direct higher education loans. Nonprofit leaders feared the temporary reopening of funding portals might not last, impacting organizations funded in arrears. Young stressed the urgency, noting, “Some organizations will have to make decisions about keeping their doors open.”
Nonprofits typically use a “drawdown” system for funding, submitting expenses throughout the year to receive reimbursement. State leaders voiced concerns about public misconceptions regarding funding sources, as the state often acts as a “pass through” for federal funds. The Governor’s Office did not respond to requests for guidance on advising affected organizations. Leaders across sectors expressed shock, with no comparable precedent.
Even Republican leaders, generally supportive of Trump’s policies, faced challenges. Montana Congressional delegation member Rep. Troy Downing expressed support for Trump’s initiative but committed to monitoring its implications: “I support any efforts by President Trump to be a good steward of taxpayer dollars…My office will continue to monitor what this guidance means for my constituents.”
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