Federal funding is a critical lifeline for many nonprofits, including those supported by Exponent Philanthropy members. When disruptions arise—whether from policy shifts, executive orders, or legal challenges—nonprofits may encounter delayed payments, uncertainty about future grants, and cash flow challenges that threaten their programs and operations.
For leanly staffed foundations, staying informed isn’t just about awareness—it’s about impact. Your grantees may lack the time or capacity to track evolving federal policies, yet these changes can profoundly affect their budgets and planning. By understanding key developments and sharing relevant updates, you can help nonprofits anticipate challenges, adapt, and make informed financial decisions.
To stay up to date, consider attending YPTC’s webinar, “Demystifying Federal Funding: Nonprofit Questions Answered,” on March 26th.
Your Part-Time Controller (YPTC) continues to track key developments in federal funding, including an ongoing legal challenge to a temporary grants freeze. Their latest update outlines the current landscape and offers practical steps nonprofits can take to navigate the uncertainty. We encourage you to review their insights, stay engaged, and share this information with your grantees. In times like these, staying informed—and offering a little support—can make a meaningful difference.
What Funders and Nonprofits Should Know:
- Is the funding freeze thawing? OMB’s January 27 memorandum pausing all federal funding was rescinded after a District Court judge granted a temporary stay in response to a lawsuit, though many organizations were still unable to access funds. On February 25, the judge extended this stay through an injunction, forbidding further freezes until the case is settled.
- Federal funding remains in flux. YPTC’s February 17, 2025, and February 3, 2025, blog posts covered a series of Executive Orders (EOs) and Office of Management & Budget (OMB) directives affecting nonprofits, as well as legal challenges to them. The National Council of Nonprofits maintains a convenient tracking summary and now also offers a Frequently Asked Questions document about potential impacts to nonprofits.
- Agencies continue to be affected differently. It can be difficult to reach program officers at federal agencies, some of whom are literally and figuratively overwhelmed by the turmoil around them. Patience and persistence are required in equal measures.
- YPTC will offer new resources. Drawing on its extraordinary expertise with nonprofits, YPTC will produce multiple new resources in the coming weeks and months, including webinars, interactive Q&A sessions, podcasts, blog posts, and more. General topics will help to demystify federal funding, while specialized topics may range from strategies for scenario planning to resources for specific sectors. Sign up here to receive alerts.
What Funders Should Encourage Nonprofits to Do:
- Communication is key. Reach out regularly to all your federal funders. While program officers cannot ignore Executive Orders, they may have updates and advice for you.
- If you are entitled to request any drawdowns on current federal grants, file the request now, as there continue to be delays and hiccups.
- Determine whether federal funds are the ultimate source for any state or local grants you may receive, or for grants paid through other nonprofits. The Assistance Listing Number (ALN; formerly known as CFDA) should be identified in sub award agreements. If you do not find an ALN but still have questions, check with your funder.
- If you have received a stop-work order, a suspension notice or a cancellation letter, you may want to seek legal counsel before responding.
- Prepare rolling cashflow forecasts on a monthly or even weekly basis. Use the forecasts to engage your Board in conversations about scenario planning and revenue diversification. If it appears you will need to bridge a gap, speak with your bank now about a line of credit.
- Keep yourself informed of developments affecting the state(s) in which your organization operates. The National Council of Nonprofits has a directory of state nonprofit organizations and many other resources. Reach out to organizations in your region or sector as well. Sign up here to receive alerts from YPTC about relevant programs and resources.
- Consider sharing your story, including the specific impact of the Executive Orders on your organization, with the National Council of Nonprofits. NCN will use the aggregated data in their ongoing advocacy efforts.
As the uncertainty around federal funding continues, Your Part-Time Controller, LLC is committed to sharing regular updates and other resources with its clients and friends. YPTC’s insights draw on over thirty years of experience providing best-in-class services to nonprofits of every kind.
To stay current, consider attending YPTC’s webinar, “Demystifying Federal Funding: Nonprofit Questions Answered,” on March 26th.
About the Authors
Harriet (Hatsy) Cutshall, CPA leads YPTC’s Government Awards Management Department. She has been with Your Part-Time Controller, LLC for more than 13 years serving as Manager and Director of a number of YPTC markets. Both prior to and since joining YPTC she helped many organizations manage government funding and resolve compliance issues related to reporting, negotiated indirect cost rates and many other needs. She serves on a number of nonprofit boards for groups that receive federal funds She and her colleague Derick Dreher have cohosted several national webinars on acquiring and managing Federal funding.
Derick Dreher leads the Government Funding Department at YPTC. His role is to help clients find and apply for institutional funding, including both federal and foundation grants. He has nearly 25 years of experience as executive director of a museum and library where he was a frequent applicant for federal funding during that entire term. He has also served as a peer reviewer for federal and state funders multiple times during his tenure with the museum. He serves on the boards of several nonprofits, and he understands the issues that you face working for and with nonprofits that receive federal funds.
Note: This blog post has been updated from YPTC’s original message dated February 28, 2025. You can find the original post here.