Several non-profit and health organizations, including an LGBTQ+ advocacy group, have initiated legal action against the Trump administration's recent directive to halt federal funding. The lawsuit, filed in a Washington, D.C. federal court, targets the Office of Management and Budget (OMB) and its acting director, Matthew Vaeth. The plaintiffs seek a temporary restraining order to preserve the current situation until the court thoroughly assesses the legality of the OMB's actions.

This legal challenge follows a series of memos issued by the Trump administration to federal agencies, outlining directives on matters such as return-to-office procedures and the suspension of federal grants. One memo from the OMB specifically directs a pause on all federal grants and loans, citing the goals of curbing "'wokeness' and the weaponization of government" and promoting governmental efficiency.

The memo states that federal agencies are required to temporarily halt all activities related to the allocation or disbursement of federal financial assistance, including aid for foreign entities, NGOs, DEI initiatives, and programs related to gender ideology and the Green New Deal. The freeze is set to begin at 5 p.m. ET on Tuesday.

The lawsuit contends that the plaintiffs, who depend on federal funding, will experience significant harm due to the aid freeze. Michael Adams, CEO of SAGE, an organization focused on improving the lives of LGBTQ+ older adults, expressed concern that the freeze would severely impact older Americans, particularly LGBTQ+ individuals who already face unique obstacles.

Other leaders in the non-profit sector also voiced their opposition to the freeze. John Arensmeyer, Founder & CEO of Small Business Majority, predicted a devastating impact on small businesses across the country, labeling the move a "Draconian shuttering of the federal purse." Diane Yentel, President & CEO of the National Council of Nonprofits, characterized the directive as a "reckless action" with potentially catastrophic consequences for non-profit organizations and the communities they serve.

The White House has been contacted for comment. The OMB memo highlights that of the $10 trillion spent by the federal government in fiscal year 2024, $3 trillion was designated for federal financial assistance, including grants and loans.

In addition to the aid freeze, President Trump also signed two executive orders targeting Diversity, Equity, and Inclusion (DEI) initiatives within the federal government. These orders, focused on military excellence and readiness, are expected to be implemented by Defense Secretary Pete Hegseth and the secretary of Homeland Security within 30 days.