Funding Freeze Rescinded? Not So Fast.

The White House announced this afternoon that it rescinded the federal funding freeze. Problem solved? Not quite.

After throwing nonprofits, agencies, contractors, and NGOs into chaos—triggering stop-work orders and frantic budget calculations—the White House OMB announced this afternoon that "OMB Memorandum M-25-13 is rescinded."

A lawsuit filed by the nonprofit Democracy Forward on resulted in a Washington, DC Federal Judge temporarily blocking the funding freeze on Tuesday night.

Twenty-two state attorneys general and the District of Columbia filed a separate lawsuit in Rhode Island’s U.S. District Court; the judge indicated he would issue a temporary restraining order blocking White House executive orders that threaten to defund federal programs conflicting with President Trump’s agenda.

CNN reports -- During the hearing, the states introduced into evidence a social media post by the White House press secretary, Karoline Leavitt, in which she claimed the motion rescinding the Office of Management and Budget memo was “NOT a rescission of the federal funding freeze.”

“It is simply a rescission of the OMB memo,” she wrote.

“We can’t cross-examine the tweet,” the judge joked.

This is far from over. House Republicans, fresh from a three-day retreat at Mar-a-Lago, have returned to D.C. to finalize their budget strategy—likely bringing more attacks on federal funding for programs that don’t fit their agenda. The immediate funding freeze may be lifted, but the broader fight over federal spending is just beginning.

For nonprofits, government contractors, and state and local agencies, this moment offers little relief—only a temporary pause in uncertainty. The fact that the White House press secretary explicitly stated that the funding freeze itself remains in place suggests that agencies may still face delays, disruptions, and new hurdles in accessing federal dollars.

What does this mean moving forward? Expect continued legal challenges, political maneuvering, and further attempts to restrict funding through budget negotiations and executive action. For those relying on federal grants and contracts, vigilance, advocacy, and contingency planning remain critical.

What are you seeing on the ground? Have you experienced disruptions due to the funding freeze? Let’s talk in the comments.

Alexandra N. Cohen - Founder, ANC Consult. Helping nonprofits succeed through strategic planning, grant research and writing, and impactful messaging to drive growth, secure funding, and amplify mission impact.

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