(Graphic from Deposit Photos)
A third temporary restraining order has been issued by federal courts blocking the Trump Administration from arbitrarily stopping disbursements to nonprofits and other entities that were approved by Congress and otherwise contracted.
All of the orders are from federal district court judges, two orders from the District of Columbia and the other from Rhode Island.
Federal District Judge Loren AliKhan in the District of Columbia continued the temporary restraining order she issued February 3 until February 7. She found that the Trump Administration’s Office of Management and Budget simply rescinding a memo ordering departments to freeze disbursements did not actually stop the freeze. The words of a White House spokesperson saying the memo was rescinded but the order was still in effect was a cornerstone of her order.
The judge was not persuaded by the Trump administration’s lawyers’ jurisdictional arguments that plaintiffs (the nonprofits) lack standing because they “have not adequately alleged injury in fact, causation, or redressability” and because “the case is now moot because OMB rescinded memorandum M-25-13 after Plaintiffs filed suit.
“The court is unpersuaded on both counts,” AliKhan wrote in her decision. “Plaintiffs have adequately shown injury in fact. … The record also supports Plaintiffs’ allegations of causation. On January 30, after this court’s administrative stay and OMB’s purported “rescission” of M-25-13, the Environmental Protection Agency responded to a nonprofit’s funding inquiry by saying that it was still ‘working diligently to implement [OMB]’s memorandum, Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs’,” she wrote.
The plaintiffs, represented in the legal challenge by Democracy Forward, include the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE.
AliKhan enjoined the Trump administration from “implementing, giving effect to, or reinstating under a different name the directives in OMB Memorandum M-25-13 with respect to the disbursement of federal funds under all open awards.” She further ordered that the government provide written notice of the court’s temporary restraining order to “all agencies to which OMB Memorandum M-25-13 was addressed. The written notice shall instruct those agencies that they may not take any steps to implement, give effect to, or reinstate under a different name the directives in OMB Memorandum M-25-13 with respect to the disbursement of Federal Funds under all open awards. It shall also instruct those agencies to release any disbursements on open awards that were paused due to OMB Memorandum M-25-13.”
Judge John J. McConnell, Jr., of the U.S. District Court for the District of Rhode Island, who heard from 22 attorneys general from states and the District of Columbia, issued similar orders last week.
The challenge is especially dire for nonprofits that receive funding for international relief and work with migrants. Data compiled by Charity Navigator of 49 large nonprofits funded by USAID have a median working capital ratio of 0.28, which means they have less than 100 days of working capital. One-quarter of them have fewer than 60 days of working capital so they would be out of business with a 90-day freeze as per the OMB memo.
This data is from larger organizations so smaller nonprofits might not have as much financial cushion. The data is also from the most recently filed federal Form 990 the data might not accurately reflect current circumstances.
“Nonprofits across the country have been left in limbo by the Trump administration’s callous actions. Now, they finally have some needed clarity and can continue to do their essential work,” said Diane Yentel, chief executive of the National Council of Nonprofits. “We are determined to continue to do all we can to prevent this administration’s reckless attempt to halt funding that would put people’s lives and safety at risk, from pausing research on cures for childhood cancer to halting food assistance, safety from domestic violence and closing suicide hotlines.”
Said Skye Perryman, president and CEO of Democracy Forward, “The Trump administration’s OMB grant freeze memo plunged people and communities across the country into chaos and uncertainty as they waited to see if critical programs–from childcare, to eldercare, to food services, to health programs, to community initiatives–would continue. This order is a lifeline that provides the breathing room needed for our clients to continue to provide services people across this country rely on. … “We look forward to pursuing this case on its merits in court on the behalf of our clients and the American people.”
