A: No. Those Executive Orders remain in effect.

A: We'll try. The original OMB memo established the federal grants pause, so the memo revoking the original memo rescinded the funding freeze. From a legal perspective, the funding freeze is rescinded. This post could be a reminder from the White House that the underlying Executive Orders, including an Executive Order that directs federal agencies and OMB to remove DEI practices from federal grant processes and agreements, remains in place. The previous Executive Orders didn ot establish a funding freeze for grants and loans but did require that federal contracts and grant agreements include terms requiring grantees and contractors to comply with federal anti-discrimination rules and to agree not to have DEI programs. It also gives OMB authority to provide guidance and issue directives across the federal government on elimination of DEI references, requirements, or programs within federal agencies, federal grants, and federal contracts.

Reference the social media post here.

A: Potentially, a federal grants pause would apply to all (or at least most) federal grants to nonprofits and to state and local governments. The original memo directed agencies to “pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” Because several of these terms are not clearly defined, it is possible that some or all federal agencies may have interpreted the memo to require a pause in virtually all of their grants to nonprofits. The memo would not have applied to federal aid to individuals, including Social Security, Medicare, Medicaid, Supplemental Nutrition Assistance Program (SNAP), Pell grants, and rental assistance, so these payments would have continued. Under the original memo, OMB would have the authority to grant exceptions to allow agencies to grant new awards or make payments on a case-by-case basis.

A: Potentially, yes. It remains possible that federal agencies may may efforts to cancel grants that are deemed inconsistent with recent presidential Executive Orders.

A: OMB has not yet indicated what its next steps will be. They may try to issue new guidance requiring federal agencies to make changes to, cancel, and of stop payments on, federal grants that are deemed to be inconsistent with recent presidential Executive Orders. We expect that future guidance from OMB will drafted more clearly and narrowly than the January 27 memo to increase the likelihood that it would be upheld in court.

A: Nonprofits should be in touch with their grant administrators to get a better sense of their granting agencies' plans for any future guidance from OMB that could pause the federal grantmaking process. Organizations that rely heavily on federal government funds and whose granting agencies anticipate that potential future action from OMB could lead to disruptions of grant disbursements may want to take steps to ensure that they have adequate funds in reserve or available from other funding services to be able to weather any such disruptions.