Rescinded funding freeze still raises concerns for non-profits

While the initial threat of a funding freeze for nonprofits receiving federal aid has been rescinded, social service agencies in St. Joseph are keeping a cautious eye on the situation.

Local nonprofit leaders told News-Press NOW most people do not realize the important gap that federal funds fill alongside the generosity of individuals and businesses. Although the proposed freeze on federal grants by the Trump Administration did not apply to certain individual disbursements like SNAP or Medicare, AFL-CIO Executive Director Nichi Seckinger said other important individual needs would go unmet in the event of such a decision.

“A lot of transitional housing programs and a lot of our utility assistance programs are based on those federal dollars,” Seckinger said. “Even though those payments go through an agency, from the federal to the city level, those payments are being made on behalf of individuals in need of direct assistance.”

A freeze in federal funding for such needs would be devastating for individuals in need and put more pressure on nonprofits that receive little or no federal funding to try and help partner agencies pick up the slack.

For instance, even though the United Way of St. Joseph takes no federal funds, many of their partner agencies rely on it for key programs that range from the care of mothers and infants to keeping people in livable homes, United Way of St. Joseph’s Executive Director Kylie Strough, said.

“What we often don’t recognize is that it’s a braided kind of funding,” Strough said. “It is a blend of private and public partnership ... that helps these programs happen at the scale needed in our area.”

After the sudden issuance of the potential federal funding freeze, the pausing of it by the courts and then a notice from the Trump Administration of a rescinding of the order, many nonprofits are left to wonder how reliable future funding will be for their programs. The solutions to these concerns vary.

According to Seckinger at AFL-CIO, many agencies are going to be more reluctant to spend federally funded dollars because they are not yet sure the money will be refunded to them.

Strough at United Way said ongoing prioritization is more important now than ever, similar to the approach that all nonprofits were forced to take during the COVID-19 pandemic.

“At that time, we had to focus on the most essential services and programs and make sure you are finding ways to keep those going,” Strough said.

This is the approach of Catholic Charities of Kansas City/St. Joseph, whose CEO Karen Noel issued a statement to News-Press NOW that said, in part, “Without knowing how long the ‘pause’ will be, we are working on a plan to utilize our operational reserves, which will last approximately 90 days.”

She went on to say that a restoration of the full flow of these federal funds will keep thousands of nonprofit organizations from bankruptcy.