On Monday night, a memo from the White House’s Office of Management and Budget set off a wave of uncertainty among nonprofit agencies across the United States, including in Montana. By Tuesday noon, many were unsure if they should halt operations due to a directive from U.S. President Donald Trump, proposing a close review of all federal spending. The initiative aims for a temporary freeze that could affect billions to trillions of dollars in federal funding, with exceptions for individual payments like Medicaid and Social Security. Nonprofit leaders expressed confusion as some funding streams were not functioning properly.
The Trump administration’s directive requires federal agencies to “identify and review all federal financial assistance programs,” even for existing contracts, with a case-by-case review by political appointees. An emergency lawsuit filed in Washington D.C. temporarily paused the funding freeze until 5 p.m. next Monday, causing additional concern among nonprofit leaders seeking clarity. Communication from federal contacts was limited, with directives coming solely from the White House’s OMB, leaving many nonprofit organizations without guidance.
Cindy Stergar from the Montana Primary Care Association noted that some funding portals for programs like Head Start temporarily reopened, though clarity remained elusive. The White House later clarified that the freeze targeted programs related to diversity, equity, inclusion, immigration, and foreign aid, yet many nonprofits reliant on federal funding were affected. The Montana Nonprofit Association, part of the National Nonprofit Association, contested the order in court, highlighting the impact on their 700 active members and nearly 3,000 registered nonprofits in the state.
Concerned about Montana’s economy, where 11% is tied to the nonprofit sector, leaders fear the freeze could affect human services, impacting health, energy, education, and housing programs. Nonprofits often operate on a “drawdown” system, funding services retroactively, meaning any disruption could force them to cut services or staff. Kelsen Young from the Montana Coalition Against Domestic and Sexual Violence warned that victim services, including shelters, may suffer without regular funding. Meanwhile, Montana Superintendent of Public Instruction Susie Hedalen stated that federal education funding remains largely unaffected.
The funding freeze has drawn criticism and concern even from typically supportive Republican leaders. Rep. Troy Downing expressed support for Trump’s initiative to align federal funding with administration goals, emphasizing that programs providing direct assistance to Americans are exempt. However, the extent and impact of the freeze remain unclear, leaving many nonprofit organizations in a precarious position.
