Policy Briefing

Catalyst Policy Briefing Issue 1: Federal Policy Impacts

You look to Catalyst for learning and connection and we strive to provide you with relevant, timely information and opportunities to leverage one another’s efforts. We have heard your concerns about how federal funding and policy changes will impact the wellbeing of communities and nonprofit partners.

In light of the rapidly changing environment, we are introducing a weekly e-briefing to help you stay in the know about critical context and resources that can be used to support the evolving needs of your grantees. While we will focus primarily on federal policy changes impacting philanthropy, we know that local and State budgets and programs are intertwined with federal policy, so you can expect a spectrum of information and resources.

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Let’s begin.

This week, we saw a whiplash of federal funding news. Here’s what happened:

The Facts: Federal Funding Freeze

  • The White House issued a memo on Monday that seemed to indicate trillions of dollars of federal funding would be frozen until mid-February and many grants and contracts eliminated.
  • After the dust cleared, it became evident that the intention was to have agencies review their programs for compliance with the numerous executive orders issued up to that time – and eliminate or modify any that did not.
  • This threw into question funding for healthcare, scholarships, workforce, and other programs impacting communities of color, people with low incomes, unhoused people, and many more. It also caused nonprofits to question their ability to retain staff and meet the needs of communities for whom services are federally funded.
  • On Tuesday, a federal judge ruled that the freeze could not go into effect until a lawsuit brought by impacted nonprofits was reviewed. By Wednesday, the White House rescinded its memo. However, the executive orders underlying the funding freeze remain in effect and the judge will still consider the lawsuit (one of two, the second of which was filed by 22 state Attorneys General).
  • At issue, among other things, is whether the President has the power to alter funding that was Congressionally approved.

The Takeaways: Considerations for Philanthropy

  • Although the Office of Management and Budget memo was rescinded, changes to federal funding will almost certainly come, reducing the resources available to many nonprofits.
  • Philanthropy cannot and should not replace federal funding; but we can be prepared and connected. Things you can do now:
    • Check in with your grantees to understand how they are or might be impacted.
    • Talk to co-funding partners, whether in philanthropy or government.
    • Examine your funding plan to see what flexibility you have.
    • Consider new strategies to ensure nonprofit stability and continuity of services in light of impacts on cash flow (e.g., bridge loans, pooled responsive funds, technical assistance).
    • Reach out to us at Catalyst to share new strategies, needs you identify, interest in collaborative funding efforts, and the questions you have – today and in the future.

We know that one message cannot provide all the answers, and many questions still remain. Here are a few other ways you can stay engaged and informed:

  • Join us on February 5 for a Border and Immigration Funder Briefing where we will provide updates on changes to immigration policy, including how to prepare residents for heightened enforcement actions, the existing and potential infrastructures of care for asylum seekers and refugees, and where and how funders can engage.
  • Join us virtually on February 12 for a call on Navigating Policy Shifts: An Open Space for Funders. This unstructured call will be an opportunity to share concerns, ask questions, and hear from peers about how they’re navigating this moment.
  • Attend a call on Executive Orders on DEI presented by United Philanthropy Forum, National Council on Nonprofits, Independent Sector, and Council on Foundations for a discussion on how the new executive orders affects nonprofits and philanthropy.

These times are challenging, and we know that there is a long road ahead. Now is the time to find strength in community, and Catalyst is here to help you in whatever way we can.