Navigating the 2025 Continuing Resolution: What Grant Seekers Need to Know
On Friday, March 14, 2025, Congress passed a continuing resolution (CR) to avert a government shutdown, extending federal funding through September 30, 2025. While this would normally be cause for optimism, 2025 isn’t proving to be normal in any way, shape, or form. The CR isn’t “clean” in that it doesn’t merely preserve existing funding levels like most CRs. This CR cuts non-defense spending by about $15 billion from last year and increases defense spending by about $6 billion.
Most notably, the CR does nothing to curb the instability that has been rocking the nonprofit sector.
Overview of the March 14, 2025 Continuing Resolution
The CR is designed to fund the federal government through the end of the fiscal year on September 30, 2025. This full-year CR sets the total base discretionary budget authority for FY 2025 at $1.600 trillion, with $893 billion allocated for defense and $708 billion for non-defense spending.
Key aspects of the CR include:
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A $6 billion increase in national defense funding above FY 2024 levels.
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A $15 billion cut to non-defense discretionary accounts.
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Continuation of $20.2 billion in IRS funding rescissions from FY 2024 appropriations.
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Removal of all Congressionally Directed Spending (earmarks).
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Extension of certain health policies, offset by extending the Medicare sequester.
Impact on Federal Grant-Making Processes
The CR's impact on federal grant-making processes will be substantial, based on historical trends and the specific provisions of this resolution. Continuing resolutions typically introduce delays and uncertainty into the grant-making process. Under normal circumstances, the temporary nature of CRs can slow down or halt the issuance of grants, creating uncertainty about the amount of funding available. This uncertainty disrupts the planning and execution of grant-funded projects, potentially affecting a wide range of nonprofit organizations that rely on federal funding. This CR does nothing to address the uncertainty and instability we’ve already been experiencing so far this year and can be expected to wreak more havoc than a typical CR.
Agency-Specific Impacts
While we haven’t yet analyzed the impacts on every federal grant-maker, we have hurried to pull together high-level summaries of those you are likely most concerned about. These federal agencies will be affected in various ways:
Education (ED): The Department of Education is facing significant disruptions to its competitive, discretionary grant programs, with nearly $1.5 billion in grants being canceled, including $600 million for teacher training programs and $900 million in contracts from the Institute of Education Sciences. These cancellations, coupled with the ED’s massive reduction in personnel and ongoing changes to its grant management processes, are creating a challenging environment for both the administration of grants and potential grantees, with delays in announcements and awards continuing due to funding uncertainties.
Department of Health and Human Services (HHS): HHS has initiated a major workforce reduction, offering $25,000 buyouts to a large portion of its employees. This reduction in staff will slow down grant processing and management at the largest federal grant-making department.
Health Resources and Services Administration (HRSA): The CR includes significant reductions in funding for health care facilities and training grants through HRSA. This will directly impact organizations working in healthcare and community health services.
Substance Abuse and Mental Health Services Administration (SAMHSA): SAMHSA is facing significant operational challenges with potential staff reductions of up to 50-70 percent and office closures which are likely to impact its ability to manage and administer competitive and discretionary grant programs effectively. While no specific cancellations of SAMHSA grant competitions have been announced, no RFPs have been published and we don’t see an end yet to delays in announcements and awards due to funding uncertainties and operational constraints imposed by the CR.
Housing and Urban Development (HUD): The CR maintains HUD's funding at FY2024 levels, resulting in a mix of impacts including some program increases (such as for Tenant-Based and Project-Based Rental Assistance) but also significant cuts (like in the Community Development Fund), while overall creating operational challenges and potentially limiting HUD's ability to meet growing housing demands due to flat funding in the face of rising costs. This funding landscape, coupled with the elimination of earmarks and lack of additional disaster recovery funding, may exacerbate existing housing issues and complicate HUD's long-term planning and program implementation.
Department of Agriculture (USDA): The USDA is experiencing significant disruptions to its competitive, discretionary grant programs, with several programs facing funding freezes, cancellations, and delays in announcements and awards. Key grant programs affected include those administered by the National Institute of Food and Agriculture (NIFA), such as the Community Food Projects Competitive Grants Program and Specialty Crop Research Initiative, which are currently under review, impacting the timely distribution of funds and initiation of new projects. These challenges are further exacerbated by recent mass terminations of USDA employees and leadership voids, which have crippled the agency's ability to effectively manage grants and process applications.
National Institutes of Health (NIH): The NIH has already faced disruptions due to the cancellation of research grants and the disbandment of the Sexual and Gender Minority Research Office (SGMRO). These policy shifts, combined with the CR, will further impact NIH's funding and research priorities.
NOTE: If you need a deep analysis of another department or agency, don’t hesitate to reach out and we will pull one together for you. We’ve tried to research what we know are major funders for our audience. We’re here for you and will do everything we can to help you navigate this chaotic federal funding landscape.
Funding Uncertainties
The $15 billion cut to non-defense discretionary accounts will significantly impact nonprofits that depend on federal funding. This reduction will lead to fewer grants being available, reduced funding amounts for existing grants, and increased competition for funding across any available source affecting nonprofits' ability to deliver services and maintain operations.
Our community of do-gooders are going to face operational challenges due to the unpredictability of funding during CRs and the uncertainty driving the political environment broadly. We know you are already facing difficulties in maintaining staff, planning long-term projects, and ensuring consistent service delivery. We’re working hard to help you adapt quickly to this rapidly changing funding landscape and all of the significant challenges coming with it.
Adaptation Strategies
To navigate these challenges, we encourage you to:
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Diversify funding sources to mitigate risks associated with federal funding uncertainties.
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Leverage technology to improve efficiency and effectiveness in operations and service delivery.
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Enhance performance reporting and accountability measures to maintain credibility with funders and stakeholders.
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Engage in advocacy and policy discussions to influence funding decisions and highlight the importance of your work.
To that end, we are working to retool the education and support we provide. We’re developing a new, enhanced training program on corporate and foundation funding and putting together a deep dive training program on leveraging technology to improve your grant writing efficiency (ethically). We urge you to focus on those last two bullets, evaluation and advocacy and strongly encourage everyone in our community to hone your PR game.
Final Thoughts
The March 14, 2025, continuing resolution has done nothing to calm the uncertainty in the federal grant-making process. Cuts to non-defense discretionary spending and specific policy changes are likely to continue to create operational difficulties for many nonprofits. Organizations will need to adapt strategies, diversify funding sources, and potentially scale back certain programs or services in response to these shifts. Strategic planning, relationship building, and adaptability will be crucial for navigating this new funding landscape. If you have questions or need support in navigating these changes, don’t hesitate to reach out—we’re here to help.
Finally, thank you to everyone who has already shared your stories and insights. We’ve been receiving a steady stream of emails and messages about specific program impacts as our community is experiencing them. We know our friends in higher education, agriculture programs, housing, and a host of other sectors are already hurting. We’re also seeing notices concerning legal actions and challenges to some of the changes already in motion. None of us know where all of this is going at this point, but we’re all in it together. Let’s stay connected and see each other through it.