A coalition of nonprofit organizations and health associations, including a prominent LGBTQ+ advocacy group, initiated legal action on Tuesday in response to the Trump administration’s recent directive to suspend federal financial assistance. The lawsuit was lodged in a federal court located in Washington, D.C., against the Office of Management and Budget (OMB) and its acting director, Matthew Vaeth.

The Legal Challenge

The plaintiffs, which include the National Council of Nonprofits, the American Public Health Association, the Main Street Alliance, and SAGE, are seeking a temporary restraining order to maintain the existing status of federal funding until the court thoroughly reviews the legality of the OMB’s actions.

This lawsuit comes in the wake of a swift flurry of memoranda released by the Trump administration on Monday, which contained directives concerning a variety of federal operations—including mandates on returning to in-person work and halting federal grants.

Suspension of Federal Grants

Among the memos released, one particularly contentious directive from the OMB mandates an immediate pause on all federal grants and loans. The administration frames this pause as a necessary measure to eliminate what they term “wokeness” within the government and to enhance overall efficiency in federal operations. The memo specifies that federal agencies must cease all activities related to the disbursement of federal financial assistance, which encompasses a broad range of programs directed towards foreign aid, non-governmental organizations, and initiatives promoting diversity, equity, and inclusion (DEI), among others.

The memo indicates that this suspension will take effect at 5:00 PM ET on Tuesday.

Impact on Communities and Organizations

The legal challenge highlights the potential repercussions of this funding freeze. The organizations involved argue that they heavily rely on federal support for their operations. Michael Adams, CEO of SAGE, a group dedicated to improving the lives of LGBTQ+ older adults, expressed grave concern regarding the freeze’s impact. He stated, “This freeze would devastate the lives of older Americans, including LGBTQ+ elders who already face unique challenges.”

Adams further warned that this “reckless” decision places entire communities in jeopardy, urging immediate action to protect vulnerable populations. His sentiments were echoed by John Arensmeyer, the founder and CEO of Small Business Majority, who called the federal grant freeze a “Draconian shuttering of the federal purse” that would significantly hinder small businesses across the nation.

Reactions from Nonprofit Leaders

Diane Yentel, President and CEO of the National Council of Nonprofits, characterized the Trump administration’s directive as a “reckless action” likely to have catastrophic results for countless nonprofit organizations and the communities they serve. She warned that any delay or pause in funding could halt critical services, including research on cures for childhood diseases, housing assistance, food aid, and support for domestic violence shelters, which have already been stretched thin due to increased demand during recent years.

Yentel emphasized the urgency of halting the order to prevent “avoidable harm” to those who depend on these vital services.

Federal Financial Assistance Framework

The memo indicates that the federal government’s fiscal year 2024 includes a budget of approximately trillion, with trillion allocated specifically for federal financial assistance programs, such as grants and loans. Vaeth’s memo was distributed to all heads of executive departments and agencies, effectively halting numerous ongoing and future projects funded by federal support.

Broader Implications of Executive Orders

In addition to the funding suspension, President Trump also signed two executive orders on Monday aimed directly at DEI initiatives within the federal government. Titled “Prioritizing Military Excellence and Readiness” and “Restoring America’s Fighting Force,” these directives are expected to be implemented by Defense Secretary Pete Hegseth and the Secretary of Homeland Security within the next 30 days. These orders underscore a broader cultural shift within the administration, targeting what it perceives as ideological extremism within federal operations.