Recent court actions

On February 25, in a lawsuit filed by the National Council of Nonprofits (NCN) and other organizations and following a previous temporary restraining order (TRO) in the case, a federal judge in the District of Columbia issued a nationwide preliminary injunction blocking the White House from “implementing, giving effect to, or reinstating under a different name” the directives in the original OMB funding freeze memo (Memorandum M-25-13) with respect to the disbursement of Federal funds under all open awards. The judge’s February 25 ruling further directs OMB to communicate to all federal agencies to which the original OMB memo was addressed, to inform them about the ruling and to “release any disbursements of open awards that were paused as a result of” that memo. This injunction, like the previous TRO, applies only to existing grant programs and not new ones.

In a new action brought March 13, NCN, joining with several other organizations, filed suit to challenge the Trump Administration’s ongoing freeze of funding from the congressionally-approved Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), known also as the Bipartisan Infrastructure Law. On April 15, a judge granted the request and issued a preliminary injunction barring the administration from “freezing, halting, or pausing on a non-individualized
basis the processing and payment of funding” appropriated under those laws while the litigation proceeds.

In a separate case filed by 22 states including New Jersey, and the District of Columbia, on January 31 a judge issued a temporary restraining order blocking the freeze of funding for the plaintiff states. On February 10, the same judge granted a motion to enforce the restraining order, finding that some agencies were continuing to withhold funds. On March 6, the judge granted a motion for a preliminary injunction, barring the Trump Administration from impeding the disbursement of appropriated federal funds to the states

On February 21, a federal judge issued a preliminary injunction blocking two executive orders (EOs) (EO 14151, and EO 14173) attempting to terminate or change federal grants and contracts for programs related to diversity, equity, and inclusion (DEI). The judge ruled that the policies and term “diversity, equity, and inclusion” as used in the EOs were potentially vague, discriminating, and unconstitutional by penalizing private organizations, including charitable nonprofits. Under the ruling, government agencies were permitted to proceed with reviewing various programs related to these EOs and to issue any reports as required under the EOs.  On March 14, an appeals court granted a stay of the preliminary injunction, meaning that for now the federal government may continue enforcing the executive orders pending the outcome of the administration’s appeal of the original ruling.

A separate case, filed February 19 by the National Urban League and two other organizations is also pending. It challenges the anti-DEIA (diversity, equity, inclusion and access) executive orders on the grounds, among other things, that they violate the First and Fifth Amendments to the Constitution.

In yet another case, on March 6, several arts organizations filed a challenge to National Endowment for the Arts’ implementation of the Administration’s “gender ideology” prohibitions on First and Fifth Amendment grounds, among other claims.

On April 1, multiple states including New Jersey, filed suit to challenge the cancellation of more than $11 billion of COVID relief and recovery funds by the U.S. Department of Health and Human Services.

On April 1, seven voting rights organizations including the League of Women Voters, NAACP and others, filed a challenge to the “Preserving and Protecting the Integrity of American Elections” executive order, particularly the requirement that individuals provide ““documentary proof of United States citizenship” in order to register to vote in federal elections. (Read more about this executive order, including a provision targeting nonprofits.)

To date, more than 200 court challenges to White House executive orders have been filed on various grounds. JustSecurity, a project of the New York University School of Law, maintains a comprehensive litigation tracker, updated frequently.

To stay up to date:

• Revisit this page frequently (https://njnonprofits.org/whitehouseombfundingfreeze2025/) and join the Center’s email list
• Executive Orders Affecting Charitable Nonprofits – chart from the National Council of Nonprofits, updated regularly
• General FAQs on Executive Actions Impacting Nonprofits – from the National Council of Nonprofits; updated regularly
• Litigation Tracker: Legal Challenges to Trump Administration Actions – from justsecurity.org, a project of the New York University School of Law

Background on the Funding Freeze

The suits originated in response to a January 27 memo from the Office of Management and Budget, putting a halt on  Congressionally approved and enacted assistance. According to the directive, which was to take effect 5PM ET on January 28, “Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders” issued by the White House. 

The directive included a stated exemption for “assistance provided directly to individuals,” and a later communication from OMB that sought to clarify the directive stated that the pause was intended to apply to a series of 7 executive orders. But the landscape was still (and remains) confusing, and those orders cast an extremely wide net across organizations and programs, as evidenced by these instructions directing federal agencies to analyze their funding programs by February 7.

The National Council of Nonprofits and other organizations filed suit against OMB, and late on January 28, a federal judge in the District of Columbia issued an administrative stay to place the White House Office of Management and Budget’s directive on hold until February 3.

On January 29, the Office of Management and Budget issued a two-sentence memo rescinding the January 27 funding freeze directive. Later in the day, the White House Press Secretary posted on X/Twitter that funding freezes under previous executive orders remain in effect.

“This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo.  Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.”

What this seemed to mean, according to accounts in The Washington Post and elsewhere, is that the blanket freeze was no longer in effect, but any directive outlined in the White House’s previously issued executive orders was still in effect. (Court challenges to many of these orders have been filed or are in preparation.)

To quote from this FAQ from our friends at the North Carolina Center for Nonprofits:

Can you explain the social media posting from the White House press secretary saying that the rescission of the OMB memo does not rescind the federal funding freeze? Not really, but we’ll try! Legally, the original OMB memo established the federal grants pause, so the memo revoking the original memo rescinded the funding freeze. From a legal perspective, the funding freeze is rescinded. It appears that the White House is reminding the public that the underlying Executive Orders, including an Executive Order that directs federal agencies and OMB to remove DEI practices from federal grant processes and agreements. That Executive Order requires that federal contracts and grant agreements (in the future, at least) include terms requiring grantees and contractors to comply with federal anti-discrimination rules and to agree not to have DEI programs. It also gives OMB authority to provide guidance and issue directives across the federal government on elimination of DEI references, requirements, or programs within federal agencies, federal grants, and federal contracts. That Executive Order does not, however, establish a funding freeze for federal grants and loans.

The inconsistency between the rescission of the OMB memo and statements by the Press Secretary and others was part of the rationale behind the the judges’ rulings in both cases.

The recent court rulings provide essential and welcome relief for nonprofits and the people and communities we all serve, but these and other cases will continue to wind their way through the courts.

Clearly, if allowed to stand, these and similar directives from the White House or OMB will cause incalculable damage to nonprofit programs and all we serve.

What can you do? This situation continues to evolve, with information subject to rapid change. Here are some suggested actions you can take:

• As noted above, the temporary restraining orders and preliminary injunctions only apply to existing grants and programs. If you have existing grants originating from the federal government, talk to your government agency contacts to see if your grant will be affected, and try to draw down funds if you are able.
• Keep in mind that aside from the actions affecting existing or previously obligated funds, important decisions about future budgets and funding are being made right now.
• Contact your elected officials to make sure they know the impact of these executive orders and other funding decisions on your organization, programs, and the people and communities you serve. If you need help identifying your member of Congress, your State legislators, or local officials, email our office and we will assist you.
• We may be asking you to share your stories confidentially through surveys or other communications. (If you responded to our annual Trends and Outlook survey, THANK YOU. Read the survey report here.) Also feel free to share your impact story with the National Council of Nonprofits here.
• As a reminder, the National Council of Nonprofits regularly updates a summary grid of many of the Executive Orders, with links to additional information, at https://www.councilofnonprofits.org/files/media/documents/2025/chart-executive-orders.pdf. Bookmark this link and revisit it frequently.
• If you’d like to connect with other national and New Jersey advocacy organizations that are active in public policy on a wide array of issues, check out this “first-stop” list on our website.

STAY IN COMMUNICATION. We’re working to keep you updated, and ask that you please do the same. If you aren’t on the Center’s email list, you can sign up here. and you can follow us on social media through the links above.

We are always stronger together. Thank you.

This article is intended for general informational purposes and does not constitute legal advice or a legal opinion. For answers to specific questions concerning your situation, you should consult a knowledgeable attorney who can advise you regarding your particular circumstances.