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Federal Updates: What Grantseekers Need to Know Amid Uncertainty in D.C.

There has been significant activity and conflicting messages regarding obligated federal grant funding since Donald Trump returned to the White House in January, leaving many grant recipients and applicants uncertain about the future of their awarded funding. Given the evolving situation, the GrantExec team is closely monitoring the latest developments and providing real-time insights to help organizations navigate these disruptions and the near-term future of the federal grant market.






Timeline of Events


Week of January 20, 2025


Executive Orders (EOs) Issued: Federal agencies were instructed to halt grant funding for programs related to several policy areas of concern:

  • Illegal immigration

  • Foreign assistance

  • Climate/environmental justice

  • Diversity, equity, inclusion, and accessibility (DEIA)

  • Abortion

  • “Gender ideology”


Agency Reactions

  • Federal agencies began independently suspending expenditures for programs under review, though these actions were inconsistent and lacked clear guidance.

  • The Department of Health and Human Services (HHS) imposed a communication freeze until February 1st, preventing officials from discussing funding decisions.


Specific EOs and Agency Directives

  • January 20: Promoting American Energy Production: Agencies must prioritize domestic energy development, remove regulatory barriers, and align federal funding with energy independence goals.

  • January 24: Maximizing Alaska’s Resource Potential: Agencies must expedite liquefied natural gas (LNG) and other resource development in Alaska by removing prior restrictions and fast-tracking permits.

  • January 26: DOS and USAID Pause Foreign Aid for Review


Week of January 27


EOs and OMB Memo


  • Deregulation Through “10-for-1” Rule: Requires agencies to eliminate 10 regulations for every new one proposed, minimizing net regulatory costs in FY25.

  • OMB Review Process: Requires agencies to complete a detailed questionnaire on over 2,600 programs by February 7th. Agencies scrambled to assess compliance, creating an atmosphere of confusion for grant recipients.


Legal and Agency Responses


  • January 28:

    • Temporary Stay: A federal judge issued a temporary stay (effective until February 3rd) blocking OMB’s new guidance after Democracy Forward and other advocacy groups filed a lawsuit.

    • Court Challenge: Twenty-two state Attorneys General filed a separate case in Rhode Island, challenging the administration’s authority to suspend legally appropriated funds.

    • NSF Funding Disbursements: Down since January 27, the NSF disbursement system for grantees returned online on Feb 2. (For more details on NSF’s implementation of the executive orders, visit this NSF page.)

    • Memo Withdrawal: Facing legal pressure, the White House rescinded the OMB guidance, temporarily lifting the broad freeze on federal expenditures.

      Agency Obligations Remain: Even with the memo withdrawn, agencies must ensure that expenditures comply with both the new EOs and existing statutes, resulting in continued delays in grant disbursements.

      Further Legal Action Expected: The judge in the Attorneys General case signaled intent to issue a broader ruling that may further block expenditure suspensions.


Additional EOs and Agency Directives


  • January 29:

    • Expanding Educational Freedom: Agencies are directed to support school choice initiatives through discretionary grants and targeted funding for military and low-income families.

    • Ending Ideological Programs in K-12 Schools: Agencies must halt funding for programs advancing controversial ideologies and ensure compliance with FERPA and Title IX.

    • DOT Directs Elimination of Biden-Era DEI and Climate Programs: Secretary Duffy issued a memorandum instructing all DOT operating administrations to identify and eliminate Biden-era programs and policies related to climate change, DEI, racial equity, gender identity, and environmental justice.

  • January 30: DOI Ends DEIA and Environmental Justice Programs: DOI will terminate all DEIA and EJ programs. The order discontinues related grants and contracts and mandates a policy review to ensure funding is based on merit and compliance.

  • January 31: ED Revises Charter School Programs (CSP), Announces $33M in Grants: Revised State Entity and Charter Management Organization Grant programs to be aligned with Trump-Vance Administration priorities. The Department cited regulatory burdens and discriminatory practices under the previous administration and made $33 million available for the CSP competition.


Week of February 3


Court Action and Agency Shifts


  • February 3: Temporary Stay -> Temporary Restraining Order (TRO): In the case of National Council of Nonprofits et al. vs. Office of Management and Budget, the presiding judge granted another TRO against the administration’s plan to halt federal grants and loans:

    • The Department of Justice’s motion to dismiss was denied.

    • OMB is enjoined from reinstating or implementing any directive to halt federal spending broadly.

    • OMB must provide notice to all federal agencies, instructing them to release any funding that was paused under the directive.

    • The court order can be accessed here.


  • February 10: Court Clarifies TRO Scope and Orders Immediate Fund Restoration: U.S. District Judge John J. McConnell issued a critical clarification to his February 3 TRO, explicitly prohibiting all categorical freezes tied to OMB Directive M-25-13 or presidential EOs. Judge McConnell emphasized that the freeze caused “irreparable harm” and likely violated constitutional spending powers. The administration appealed to the First Circuit Court of Appeals, but the TRO remains in effect during litigation. The order mandated:

    • Immediate restoration of frozen funds, including those under the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA).

    • Resumption of disbursements for agencies like the National Institutes of Health (NIH).

    • Removal of administrative hurdles delaying implementation.


  • Impact on Agencies: This ruling represents a significant setback to the administration’s attempts to freeze funding. Agencies are now scrambling to interpret and comply with the judge’s order—meaning many previously paused or halted disbursements may resume.


EOs and Agency Directives


  • February 3

    • DOI Issues Order to Maximize Alaska’s Resource Development: DOI ordered to accelerate energy and mineral production in Alaska by revoking prior restrictions, expediting permitting and leasing, and prioritizing infrastructure development to support extraction and transport.

    • DOI Issues Deregulation Order: DOI Bureaus and Offices ordered to identify at least ten existing regulations for removal when proposing a new one. New regulatory costs must be offset by eliminating costs from at least ten existing rules.

    • DOI Orders Energy Funding Review and Realignment: DOI ordered to assess all grants, loans, and disbursements under the IRA and IIJA. The order prioritizes funding for domestic energy production, critical minerals, and infrastructure, while eliminating barriers to investment and requiring neutrality between energy sources unless otherwise mandated by law.

    • DOI Issues Emergency Order to Accelerate Energy Projects: DOI ordered the use of emergency and existing legal authorities to fast-track domestic energy production, critical mineral development, and infrastructure expansion.


  • February 4

    • EPA Launches “Powering the Great American Comeback” Initiative: EPA's new strategic plan focuses on five pillars: clean air, land, and water; restoring American energy dominance; permitting reform and federalism; advancing AI leadership; and protecting and restoring American auto jobs.


  • February 5

    • DOE Launches Energy Directive: DOE directed to advance American energy dominance through nine priority actions: (1) Advance energy addition, not subtraction; (2) Unleash American energy innovation; (3) Return to regular order on LNG exports; (4) Promote affordability and consumer choice in home appliances; (5) Refill the Strategic Petroleum Reserve (SPR); (6) Modernize the U.S. nuclear stockpile; (7) Expand commercial nuclear power; (8) Strengthen grid reliability and security; and (9) Streamline permitting and identify undue burdens on American energy.


  • February 7

    • Aligning NGO Funding with U.S. Interests: Agencies must review NGO funding to ensure alignment with national priorities and adjust allocations as needed.


Week of February 10


DOE Disburses $782 Million: DOE announced a $782 million disbursement under its Loan Programs Office (LPO) for sustainable aviation fuel development, marking the first major funding release since the freeze began. This action followed the court’s TRO but coincided with DOE’s broader review of grants and loans to ensure alignment with EOs like Unleashing American Energy. Energy Secretary Chris Wright stated that while the DOE must “follow the law” on existing commitments, future funds will prioritize the administration’s energy agenda.


EOs and Agency Directives


  • February 13:

    • ED Terminates $350M in Regional Lab and Equity Grants: ED canceled 14 contracts and grants totaling over $350 million, affecting Regional Educational Laboratories and Equity Assistance Centers.

    • HUD Launches DOGE Task Force to Review Spending

    • USDA Issues New Merit-Based Funding Guidance: USDA will base funding decisions on merit rather than identity-based criteria. The memo rescinds all DEIA programs, including Special Emphasis Programs (SEP), and eliminates demographic data requirements in funding applications.


  • February 14: EPA Cancels $60M in DEI and Environmental Justice Grants


Week of February 17


EO Compliance and Legal Challenges


  • NIH Indirect Cost Rate Adjustments Paused

    • NIH attempted to cap Facilities and Administrative (F&A) rates at 15% via NOT-OD-25-068, but multiple TROs halted enforcement. Research institutions like Virginia Commonwealth University are maintaining negotiated rates pending further court rulings.


  • EPA Solar for All Grants Remain Frozen

    • Despite the TRO, EPA has not resumed $7 billion in Solar for All grants, citing ongoing reviews of EO compliance.


  • NEA Reschedules Grant Deadlines

    • NEA revised FY 2026 guidelines, canceling its February 13 deadline and rescheduling to March 11 and July 10, 2025. Applicants must now demonstrate five years of programming history, with pandemic-era flexibility.


  • First Circuit Appeal: The administration’s appeal against the TRO is pending, with oral arguments expected in early March.


  • Agency Discretion: Departments like Labor and Transportation resumed some grants but are scrutinizing programs related to DEI, climate initiatives, and foreign aid under EOs.


  • State and Nonprofit Litigation: New lawsuits challenge agency-specific pauses, arguing violations of the Administrative Procedure Act and constitutional overreach.


  • USDA Resumes IRA-Related Contract Funding: USDA announced the release of approximately $20 million in contracts previously paused under IRA review. Funding will resume for the Environmental Quality Incentive Program, Conservation Stewardship Program, and Agricultural Conservation Easement Program.


EOs and Agency Directives


  • February 17: ED Cancels $600M in Teacher Training Grants: ED cancels more than $600 million in grants to institutions and nonprofits that used Department funds to train educators on “divisive” ideologies.


  • February 18:

    • Agencies on Radical Transparency about Wasteful Spending: Agencies must publicly disclose canceled programs, contracts, and grants to increase transparency and taxpayer awareness.

    • Ensuring Agency Accountability: Agencies must improve performance and oversight through stronger internal reviews, compliance mechanisms, and regular reporting.


  • February 19:

    • Reducing the Federal Bureaucracy: Agencies are directed to eliminate non-essential functions, close certain entities, and identify further program reductions to streamline operations and cut spending.

    • ED Revises COVID-19 Relief Policy for $4.4B in State Funds: Updated guidance for the remaining $4.4 billion in state pandemic relief funding requires payments under the CARES Act, CRRSA Act, and ARP Act be made by the states in advance and then submitted to the Department for reimbursement.


  • February 20

    • DHS Freezes Grants to Nonprofits Linked to Illegal Immigration

    • HUD Cancels $4M in DEI Contracts


Week of February 24


EOs and Agency Directives


  • February 24:

    • SBA Outlines Day-One Priorities: Administrator Loeffler issued a Day One memo identifying three SBA priorities: supporting the “America First” agenda, eliminating wasteful spending and fraud, and empowering small businesses.


  • February 25: EPA Cancels $60M in DEI and Environmental Justice Grants


  • February 26: DOGE Order on Contract and Grant Oversight: Agency heads must review existing contracts and grants to identify those for termination or modification to reduce spending. Payments lacking justification must be paused. Agencies must implement a centralized system to track all disbursements, each with written justification from approving staff.


Week of March 3


Agency Directives


  • March 3: VA Cancels 585 Contracts, Redirects $900M to Core Services: The VA announced the termination of 585 non-mission-critical or duplicative contracts totaling $1.8 billion. An estimated $900 million will be redirected to health care, benefits, and services for veterans as part of an ongoing audit of 90,000 contracts valued at over $67 billion.


  • March 4: EPA Administrator Lee Zeldin Cancels 21 Additional Grants in 3rd Round of Cuts


  • March 5: DOC Announces BEAD Program Review: Secretary Lutnick announced a review of the $42.4 billion Broadband Equity Access and Deployment (BEAD) Program to remove certain prior requirements and adopt a more tech-neutral approach. The Department will also streamline infrastructure approvals to reduce delays and costs.


Legal Challenges


March 6: Two Critical Federal Grant Funding Court Decisions


  • Federal Grant Disbursement Injunction Upheld The U.S. District Court for Rhode Island has reaffirmed its earlier injunction preventing the administration from freezing or delaying disbursement of already approved federal grant funds. The ruling specifically addresses concerns from state agencies, universities, and nonprofit organizations that had received award notifications but experienced delays in receiving actual disbursements. The court determined that withholding approved funds violated Administrative Procedure Act requirements.

  • NIH Indirect Cost Rate Cap Temporarily Blocked A separate federal court ruling has temporarily halted implementation of the administration's directive to cap indirect (F&A) costs at 15% for National Institutes of Health research grants. The court found that plaintiffs - including major research universities and medical centers - demonstrated a likelihood of irreparable harm, as the cap would have immediately affected ongoing research programs. Current indirect rates, which average 52% at major institutions, will remain in effect pending further legal proceedings.


Week of March 10


EOs and Agency Directives


  • March 10:

    • EPA Administrator Lee Zeldin Cancels 400+ Grants in 4th Round of Cuts

    • DOT Rescinds Biden-Era Infrastructure Policy Memos: Secretary Duffy announced the rescission of two Biden-era memorandums related to BIL, citing concerns over their emphasis on social justice and environmental priorities.

    • HHS Terminates 79 DEIA Contracts

    • SBA Launches Made in America Manufacturing Initiative: Administrator Loeffler announced SBA's Made in America Manufacturing Initiative to strengthen economic security by empowering small manufacturers, supporting job creation, securing supply chains, and advancing fair trade.


  • March 11:

    • ED Implements Workforce Reduction: Secretary McMahon announced a 50% reduction in force as part of the Department’s "final mission." ED will continue delivering statutory programs, including formula funding, student loans, Pell Grants, special education funding, and competitive grants.

    • HHS Consolidates Regional Offices: HHS announced a reorganization reducing its regional offices from ten to four—Philadelphia, Atlanta, Kansas City (MO), and Denver—aiming to maintain geographic coverage while lowering operating costs.

    • EPA Terminates $20B in Greenhouse Gas Reduction Fund Grants: Administrator Zeldin announced the termination of Greenhouse Gas Reduction Fund grant agreements with the National Clean Investment Fund and the Clean Communities Investment Accelerator. EPA plans to re-obligate the funds with enhanced controls.


  • March 12:

    • EPA Launches Major Deregulatory Initiative: Administrator Zeldin announced a broad deregulatory effort to revise energy, manufacturing, and automotive regulations. The initiative aims to reduce compliance costs, support job creation, and enhance energy independence, focusing on power plants, vehicle emissions, and air quality standards.

    • EPA Reconsiders Vehicle Emissions Standards: Administrator Zeldin announced that EPA is reconsidering emissions standards for light-, medium-, and heavy-duty vehicles, including the Multi-Pollutant Emissions Standards and the 2022 Heavy-Duty Nitrous Oxide rule. The review follows the termination of the Biden-Harris electric vehicle mandate.


  • March 14: Recissions of Harmful EOs and Actions: Rescinds Biden-era EOs and actions related to increased minimum wage for federal contractors: allocated Defense Production Act funding for domestic manufacturing: and promotion of biotechnology and biomanufacturing innovation. Rolls back funding support for Tribal Nations, workforce development programs, and domestic investment initiatives.


Week of March 17


Directive Clarification


  • ED Emphasizes State Authority, Retains Core Funding Functions: Following the executive order to close the DE, Secretary McMahon stated that transferring power to states and local communities does not mean ending all federal support. Statutory programs—including services for K–12 students, students with special needs, and college borrowers—will continue during the transition.


Dates to Watch:

  • August 1, 2025: Launch of DOT’s Large Bridge Grant applications.

  • Fall 2025: Expected rulings on NIH’s indirect cost litigation.


Additional Agency-Level Shifts


  • USDOT Renames RAISE to BUILD

    • The Department of Transportation changed the name of the “RAISE” program back to “BUILD,” a title used under the previous Trump Administration.

    • The recent Notice of Funding Opportunity (NOFO), which closed last Thursday, was also rewritten to remove language referencing the Biden Administration’s EOs.

    • Further information is available on the DOT’s BUILD Grants page.


  • Agency Websites Reorganized

    • Multiple agencies, including the Department of Energy (DOE), are reorganizing web content to reflect the style and priorities of the Trump Administration.

    • The new main landing page for DOE is here.


  • Grant Application Periods Closed

    • Several agencies have prematurely closed grant application periods for funding opportunities that had been open prior to the recent executive orders.

    • We are actively tracking over 200 programs that appear to have closed outside of their normal schedules. Visit the Grants Explorer on the GrantExec platform to review each grant. Notably, there are still over 2,000 active federal grant opportunities. If you or your clients have questions about specific opportunities, please contact us.


 

🔎 What This Means for Federal Grant Recipients


Even though the OMB memo has been rescinded, agency-level suspensions remain widespread due to ongoing compliance reviews. Federal agencies must now:


  1. Review all expenditures to ensure they align with the new EOs.

  2. Await approval from political appointees, who are not yet in place at many agencies.

  3. Determine exemptions for critical programs such as Medicare, Medicaid, Social Security, and Veterans benefits.


Key Takeaways:


  • Federal funding freezes are expected to persist in the short term, varying across agencies.

  • Political appointees play a key role in resuming grant expenditures, but many positions remain unfilled.

  • Programs not directly tied to the “hot-button” policy areas in the EOs may see funding restored in the coming days/weeks once agency reviews are complete.


 

📌 What Should Grant Recipients Do Now?


1️⃣ Assess Your Grant’s Risk Level


While the OMB’s central review has been withdrawn, agencies are likely using similar criteria to review funding internally. We recommend reviewing the following litmus test questions originally included in the OMB memo:


  • Does the grant program align with newly issued Executive Orders?

  • Does the expenditure comply with statutory requirements?

  • Does the program rely on agency discretionary funding that could be redirected?

  • Could the funding decision be politically sensitive?


If any of your grants/contracts may raise flags based on these considerations, prepare for possible continued delays and proactively engage with agency contacts for updates.


2️⃣ Track and Document Financial Disruptions


  • Work with your finance teams to document any missed payments, additional costs, or delays in project timelines.

  • If these disruptions impact service delivery, program timelines, or staffing, document those effects carefully—this will be crucial information for advocacy efforts.

  • These data points can be shared with Members of Congress, who are monitoring the situation closely and may push for interventions.


3️⃣ Stay Engaged with Federal Agencies and Congressional Offices


  • Continue checking with your agency program officers for the latest updates on funding timelines and required compliance reviews.

  • If delays in payments or approvals are impacting critical projects, consider reaching out to your congressional representatives to highlight the real-world consequences.


 

📢 What’s Next?


  • Congressional Intervention Possible

    If grants remain suspended or slowed, bipartisan pressure in Congress may build to restore funding flows.

  • Formal Guidance from Agencies

    Eventually, agencies will clarify how they’ll implement these EOs long-term, reducing confusion for grant recipients.

  • GAO Investigations

    The Government Accountability Office (GAO) may investigate potential violations of the Impoundment Control Act or other federal statutes—though such reviews often take months or years.


 

💡 Diversify with State, Local, & Private Funding


Federal grants are only one part of the funding landscape. GrantExec tracks tens of billions of dollars in state, local, and private funding opportunities daily—all available on the platform today.



  • Find Inspiration

    Read how Kelly Cooper secured $32 million in state, local, and private grants for her organizations through GrantExec in 2024.

  • Explore Alternative Funders

    Visit the Grants Explorer and Foundations Explorer to see thousands of alternative funders for your work.

  • Update Your GrantExec Profile

    If you haven't already, adjust your funding preferences to include state, local, and private grants to expand your funding pipeline.

  • Log in to explore new opportunities now.


 

🤝 We're in This Together


While the situation remains fluid, most federal grant programs will likely see funding resume in the coming weeks—especially those not directly tied to contentious policy areas. However, continued scrutiny and delays should be expected as agencies conduct compliance reviews.


Federal policies shift, but our commitment to your success does not. We’re here to provide guidance, connections, and resources to ensure your impactful work continues uninterrupted.


📢 Stay tuned for updates—we’ll share more as the situation develops. And, as always, we’ll continue researching new grant opportunities for you every day.


💙 Thank you for your dedication, and for trusting us to stand by your side in uncertain times.


📩 Need direct guidance? Reach out to us—we’re here to help.


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