Nonprofit’s lawsuit over the federal funding freeze is part of an ‘avalanche’ of litigation

A new coalition of nonprofits has come together to challenge a sweeping order from the Trump administration pausing trillions of dollars in federal funding, successfully blocking it for now. This marks the beginning of anticipated legal action from civil society groups against President Trump’s policies.

“There will be an avalanche of litigation to stop unlawful activity,” said Skye Perryman, the president and CEO of Democracy Forward, which brought the coalition’s suit against the funding freeze. A judge ruled Monday to allow the lawsuit–one of many filed in the new administration’s first weeks–to move forward, extending a temporary restraining order.

More than a dozen federal lawsuits have already been filed against President Trump and his administration by various nonprofits, ranging from Quaker organizations to Public Citizen and the New Hampshire Indonesian Community Support. Many anticipated policy changes, but few expected the suspension of foreign aid or a widespread federal funding pause. The freeze was widely considered an existential crisis, prompting organizations to adopt diverse approaches, from keeping a low profile to community forums and mobilizing supporters to contact Congress.

Diane Yentel, the president and CEO of the National Council of Nonprofits, acted swiftly upon seeing the January 27 Office of Management and Budget memo. The memo stated: “Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.” That night, Yentel posted on LinkedIn, calling the memo a “potential 5-alarm fire” and declaring, “We won’t stand by and let it happen.”

Within hours, the National Council of Nonprofits, Democracy Forward, and other groups formed a legal strategy. “We worked throughout the night to pull it all together and be ready by 9:00 a.m. for the attorneys to call the judge… and let them know there would be a challenge… and that we would need an emergency hearing that day,” Yentel said.

Tom Watson, president and founder of CauseWired, praised the collective action. “I don’t think this is a short thunderstorm… I think it’s more of a massive tidal wave that threatens to sweep away the whole ecosystem.” Nonprofits and their funders can learn from the first Trump administration and the COVID-19 pandemic, but the funding freeze is seen as unprecedented.

Ann Oliva, CEO of the National Alliance to End Homelessness, noted that access to funding platforms was cut off even before the administration’s deadline, escalating confusion and panic. Her organization urged people to contact their congressional representatives, and at least 10,000 people did so.

Grace Bonilla, president of The United Way of New York City, said organizations are already affected by funding concerns and other policies, like increased immigration enforcement. “It’s week three,” she said, referring to the start of the Trump administration. She’s been in constant communication with other nonprofit leaders, funders, and corporations, but many are waiting. “People are painfully aware… not just to their bottom line budget but… the number of people that are going to be hurt,” she said. Bonilla added, “I would say that our elected officials need to be braver.”