How Pres. Trump's funding freeze created mass confusion for Bay Area nonprofits, local governments

Zach Fuentes Image
Wednesday, January 29, 2025
Trump's funding freeze creates mass confusion for Bay Area nonprofits
The White House Budget office ordered a pause on all federal grants and loans, then that pause was temporarily blocked by a federal judge.

SAN JOSE, Calif. (KGO) -- A funding freeze announced by the Trump administration is now on pause.

The White House Budget office Tuesday ordered a pause on all federal grants and loans, then that pause was temporarily blocked by a federal judge until next Monday.

The hours prior had made for a stressful, confusing day for some local nonprofits and the national council that represents many of them.

"This was very surprising. Total blindside did not see it coming," said Janice Jensen, President and CEO of Habitat for Humanity East Bay/Silicon Valley.

It comes after the memo by the Office of Management and Budget directed all federal agencies to stop any federal grants and loans that might conflict with President Trump's executive orders.

Habitat for Humanity chapters across the state rely heavily on federal grant money.

"I happen to be in Sacramento right now with, Habitat affiliates from around the state of California," Jensen said Tuesday, "And we figured just on the back of a napkin that this could mean that it's well over 30 million, could be as high as 50 million and affecting the vast majority of Habitat affiliates serving communities throughout California."

The National Council of Nonprofits said that that confusion was shared by hundreds of thousands of other nonprofits immediately after the news was announced.

"Downright frightened, wondering what is happening, wondering if they are affected or exempted," said Rick Cohen, Chief Operating Officer for the National Council of Nonprofits.

The confusion and uncertainty not just shared among nonprofits but local governments also.

Santa Clara County's Executive gave the board of supervisors an update Tuesday.

"We are working hard to assess impacts. We're also receiving reports from some programs and service providers that they've received stop notices from the federal government to cease further activity under their contracts and programs, including significant programs that affect social services, such as refugee assistance programs here in our county," Williams said.

In Tuesday's White House Press Briefing, Press Secretary Karoline Leavitt was asked repeatedly to clarify which programs were being impacted by the federal pause.

She said programs that provide direct assistance to Americans would not be affected.

"Social Security, Medicare, welfare benefits, food stamps, that will not be impacted by this federal pause," Leavitt said.

But throughout the day Tuesday states had reported that online portals used to get funds for emergency aid, Head Start, community health centers and Medicaid portal were experiencing outages.

Six State Attorneys Generals, including California's Rob Bonta, announced they were suing the Trump administration to stop the freeze.

"We will not stand by while the President attempts to disrupt vital programs that feed our kids, provide medical care to our families, and support housing in our communities," Bonta said.

Also planning a lawsuit is the National Council of Nonprofits who planned to get a temporary restraining order to block the order from going into effect.

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