Inside the Federal Funding Freeze

It was 10:00 am on February 18, when the notification came in—a “stop work” order, directing the San Francisco-based Center for Gender and Refugee Studies (CGRS) to immediately cease its federally funded work of supporting advocates and lawyers guiding unaccompanied children through the immigration process.

The implications for the nonprofit were immediate. CGRS was instructed by its contractor, the Acacia Center for Justice, to immediately cancel a volunteer training scheduled for that day.

CGRS’s work representing unaccompanied migrants is made possible by a $200 million annual grant.

“Almost 400 people were registered,” recalls Christine Lin, director of training and technical Assistance at CGRS. “Acacia was like, ‘You need to cancel it.’”

But far more troubling were the implications of the stop work order for the people CGRS serves: unaccompanied migrant children and the lawyers who represent them.

“Of all contracts to cut, the one [helping] immigrant children to navigate a court system that’s not in their native language. It’s extremely cruel and outrageous,” says Lin. “We train up the legal service providers—some of them may not necessarily have a background in asylum law. Some of them may not have worked with children before, so we talk through how that’s different from working with an adult. You’re working with a population that has experienced trauma.”

CGRS’s work is made possible by a $200 million annual grant from the federal Office of Refugee Resettlement (ORR), under the Department of Health and Human Services, to Acacia, which subcontracts CGRS and other nonprofits that collectively represent some 26,000 unaccompanied minors in immigration court annually.

The Trump administration’s attempted freeze of federal funding to thousands of nonprofits that depend on federal grants—funds which in many cases continue to be shut off despite the administration “rescinding” the memo authorizing the freeze—has wreaked havoc across the sector. CGRS, a small nonprofit with around 25 staff, is a case in point.

The February 18 Interior Department letter to the Acacia Center read:

The stop work order is being implemented due to causes outside of your control and should not be misconstrued as an indication of poor performance by your firm.

For CGRS, the letter represented an immediate catastrophe.

“You can never fully plan for it until it actually occurs, until you know specifically what the requirements are going to be, or how long [a funding halt] is going to be for,” says Blaine Bookey, legal director at CGRS.

Responding to Crisis

What does an organization do in the face of an instantaneous funding cutoff? In CGRS’s case, diversification offered some flexibility as the organization gets most of its funding from non-government sources, including foundations. Overall, about 20 percent of US nonprofit revenue comes from government grants.

The Acacia subcontract represents approximately 10 percent of CGRS’s annual budget, according to Bookey. In the aftermath of the stop work order, it considered reallocating other funds or seeking other sources of support—including state funding—to ensure its work could continue.

“We did not anticipate needing to make any layoffs by trying to pull some [funding] from our general operating funds, and [to] find other ways to try to fund the work—basically diverting resources that were earmarked, or that were to be used for something else, to be able to continue to support this kind of work,” says Bookey.

But even if the nonprofit itself were able to stay afloat financially, its services to vulnerable children would be immediately curtailed, presenting not only a logistical conundrum but an ethical one.

“When you’re winding down a program…[ideally] you would give some notice so that attorneys can meet their own ethical obligations to clients,” Bookey says.

“They can’t just stop representing the kids,” Lin emphasizes, adding that without legal representation, “it would force the children—no matter their age—to represent themselves alone in immigration court.”

In the face of instability, Bookey notes that robust governance systems are key. This includes transparency with staff around how funding pressures might affect an organization.

It’s about “placing an emphasis and value on transparency and quick response with our staff, so that no one feels like they’re in the dark about what’s happening and how these external stresses are going to impact them,” she says.

“They can’t just stop representing the kids.”

Financial guardrails, including diversification of funding sources wherever possible, and maintaining a robust reserve fund, are also important, adds Bookey. And though it could be argued that older funding models are outdated, there are resources out there to help nonprofits determine which might be best for their needs.

As Lin notes, in the face of funding pressures, CGRS may lean more on other funders to step up to support its mission.

Ongoing Headwinds

Three days after they had received the devastating stop work order, CGRS received a new notification from the Acacia Center: The order had been canceled, but the Acacia Center was not provided with a rationale as to why. The administration’s reversal, however, was only temporary.

On March 21, the administration canceled the contract with the Acacia Center, a little over a week before the contract was to come up for renewal on March 29.

Shaina Aber, executive director of the Acacia Center, urged the administration to reverse its decision so the center and its partners can continue their work to support the legal representation of unaccompanied migrant children.

“The administration’s decision to end these services undermines due process, disproportionately impacts vulnerable children, and puts children who have already experienced severe trauma at risk for further irreparable harm or exploitation,” she said in a statement.

In response to the cancelation of the contract, Lin also called for the administration to reinstate the funding, noting that the Unaccompanied Children Program has provided a lifeline to children as they navigate the legal process.

“Abandoning [the children] while fast-tracking their deportation cases will lead to mass due process violations and wrongful denials of protection,” she said in a statement. “In cases with life-or-death stakes, this will mean children being unlawfully deported to countries where they face grave harm.”

Across the country, nonprofits like CGRS and Acacia have reported similar ordeals—funds suddenly pulled, without explanation—affecting not just those organizations but the many thousands of people they serve.

In some cases, those funds have rematerialized while multiple court orders hold the Trump administration at bay from its proclaimed intent to defund federal grantees.

But those court orders are temporary, and it remains far from clear how these maneuvers will play out over time, leaving nonprofits like CGRS to attempt to rally their public and private sector allies.

“I guess for us, we’re thinking, now more than ever, our funders who are friendly towards us need to step up for immigrants and people seeking safety,” Lin says, “Because human lives, children’s lives, are really at stake.”