Dive Brief:

• Nonprofit organizations say in a court filing that the Trump administration has not yet released $3.6 billion in federal funding for continuums of care — including money to support people experiencing homelessness and shelters for survivors of domestic violence — despite a court order requiring the release of federal funding. 

• A federal judge blocked the administration from temporarily freezing trillions in federal funding following a lawsuit filed by a coalition of nonprofit organizations last month. But a new motion from the coalition filed March 4 asks the judge to clarify that the administration needs to release “all open” funding awards — not just open awards that have been “partially disbursed.”

• “We're asking the judge to clarify that Continuum of Care (CoC) grants that have already been awarded are covered under the court’s Preliminary Injunction preventing the administration from implementing broad federal funding freezes,” Diane Yentel, president and CEO of the National Council of Nonprofits, one of the organizations represented in the lawsuit, said in a statement on LinkedIn.

Dive Insight:

The Trump administration, in a memo from the Office of Management and Budget on Jan. 27, indicated that it would freeze all federal funding distributed through grants, loans and financial assistance programs — totalling up to $3 trillion. 

Democracy Forward, a nonprofit legal advocacy group, filed a lawsuit on behalf of several nonprofit advocacy organizations asking a federal court to block OMB from pausing the release of the funds. A federal judge quickly issued an administrative stay that temporarily blocked the funding freeze. A group of 23 attorneys general also filed a separate lawsuit seeking a temporary restraining order on the funding freeze. 

OMB rescinded the funding freeze memo, but organizations have sought further redress from the courts where they allege funds remain frozen contrary to court directives. 

As it stands, the organizations that filed the lawsuit are waiting for clarification about what is and is not included in the preliminary injunction, said Rick Cohen, COO and chief communications officer at the National Council of Nonprofits. 

That includes funding from the U.S. Department of Housing and Human Development under its CoC program, covering housing, domestic violence and homelessness services, said Cohen. 

According to the March 4 court filing, HUD announced $3.6 billion in CoC grant awards on Jan. 17. The awards included $189 million in funding for a youth homelessness demonstration program and $62 million in housing and services for people fleeing domestic violence, stalking and sexual assault. 

That funding was awarded before the funding freeze, but disbursement of that money had not yet begun, the organizations stated. After the court blocked the funding freeze, the Trump administration resumed distributing funds from awards that had been partially distributed, but it did not distribute funds for all open awards, which the organizations believe should be included in accordance with the injunction, the court filings stated. 

“We’re seeing some things that are still being held up that we interpret from the judge’s instruction that it should not be held up,” Cohen said. “We are working to clarify the scope of that injunction to ensure that everything is happening the way that it should.”

Ensuring the money gets out the door is critical, said Cohen. 

The nonprofits that receive federal funding often can’t operate for long without receiving that money, said Cohen. In many cases, the contracts nonprofits have with the federal government are on a reimbursement basis, so they have already delivered the services and incurred the costs, and they are trying to get paid back what they are owed, he said. 

Nonprofits that provide shelter or food or are running crisis hotlines don’t have the luxury of stopping their work temporarily until they receive the money they are owed because people are counting on them and the services that they provide, Cohen added. 

“These freezes are devastating for some of the organizations, [and] more importantly, for the people who are counting on them every day,” said Cohen. “Nonprofits already are underfunded, overstretched, and are really vital cogs in communities across the country.”