From the National Council of Nonprofits
Court Vacates NCN v. OMB Preliminary Injunction, Administration Remains Barred From Reinstating Broad Funding Freeze
Last week, the D.C. Court of Appeals vacated the preliminary injunction in the National Council of Nonprofits’ first lawsuit, National Council of Nonprofits v. Office of Management and Budget (OMB), which halted the funding freeze ordered by OMB in January 2025. In issuing the decision, the court concluded that the government was unlikely to reinstate the broad funding freeze, and thus the case was now moot. The decision does not affect the practical implications for nonprofits as another preliminary injunction also halting the funding freeze from a separate, but related case brought by 23 state attorneys general is still in effect. The administration recently filed in the attorneys general case that it no longer contests the merits of the overlapping claims, essentially acknowledging that its attempted full federal funding freeze was illegal. If the government attempts a similar freeze in the future, NCN remains prepared to respond.
House Slated to Vote on Delay of OMB Changes to Grantmaking
The U.S. House of Representatives is slated to vote as soon as the week of August 31 on a continuing resolution (CR) to keep the federal government open and funded through December 11. The CR includes a key bipartisan provision temporarily blocking the U.S. Office of Management and Budget (OMB) from finalizing proposed sweeping changes to overhaul federal grantmaking. The Senate passed the measure earlier this month. The administration had previously stated plans to finalize the regulation before the start of the new fiscal year on October 1.
The proposed rule, if implemented, would create significant financial risk and instability for federal grantees, including nonprofits, making it more difficult to provide vital services to communities. Grantees would be faced with unpredictable financial, legal, and reputational risks that increase the costs of accepting federal awards. This could lead to disruptions to essential services in communities and states nationwide. NCN encourages nonprofits to use August Recess to urge their representatives to take action to block the OMB regulation. See NCN’s August Recess One-Pager and Checklist for advocacy tips.
New Resource
On applying for federal grants
- Managing Federal Grants – A Start Up Guide, National Council of Nonprofits, August 2026.