The rapid rollout and abrupt rescission of OMB Memorandum M-25-13 have left many nonprofits questioning the stability of their federal funding. Designed to pause federal financial assistance while programs were reviewed for alignment with new executive orders, the memo created immediate uncertainty for organizations that rely on these critical resources. Although M-25-13 has been rescinded, the underlying executive directives remain in place, leaving nonprofits to navigate a shifting reality.

In late January 2025, the Office of Management and Budget (OMB) issued Memorandum M-25-13, directing federal agencies to temporarily pause all activities related to the obligation or disbursement of federal financial assistance. This pause aimed to provide the administration time to review agency programs and ensure alignment with the President’s executive orders and priorities.

The scope of the pause included new awards, obligations of federal funds, disbursement of funds under existing awards, and activities such as merit review panels for open Notices of Funding Opportunities. However, programs providing direct benefits to individuals, like Social Security, Medicare, Medicaid, and SNAP, were explicitly excluded from the pause.

Ultimately, the OMB rescinded M-25-13 to “end any confusion on federal policy created by the court ruling and the dishonest media coverage.” The rapid issuance and subsequent rescission of M-25-13 have created uncertainty among federal financial assistance recipients.

Nonprofit Organizations that rely on federal funding are advised to stay informed about further guidance from federal agencies and to assess the potential impacts on their programs. It’s crucial to maintain open communication with federal awarding agencies to navigate this evolving landscape effectively, while assessing the Organization’s cash flow needs and planning for potential disruptions in funding.

If you’re unsure how these changes might impact your nonprofit, please feel free to contact a Larson Gross advisor today! Proactive planning today can help ensure your mission continues to thrive, no matter what changes lie ahead.