Leaders of nonprofit agencies around the state reacted with alarm Tuesday following a directive from the Trump administration to pause trillions of dollars in federal grants.
A federal judge temporarily blocked the pause shortly before it was to go into effect on Tuesday night, but the memo outlining the funding freeze had already sowed panic and confusion as state agencies and nonprofits across a spectrum of care sought clarity about whether their programs would be impacted.
Gian-Carl Casa, president of CT Community Nonprofit Alliance, said the impact would be potentially devastating.
“Taking away federal funding will cut a hole in the already-frayed safety net, through which tens of thousands of people who depend on nonprofit programs here will fall,” Casa said in a statement. “To implement this kind of order without regard for the impact on living, breathing people is beyond comprehension.”
The lack of clarity caused chaos across the state, Connecticut Voices for Children executive director Emily Byrne said in a written statement.
“This executive order is not just reckless—it’s harmful and already creating unnecessary chaos and hardship for families and communities across the country and our state,” Byrne said.
Hundreds of private, community-based nonprofits that deliver the bulk of Connecticut’s social services receive large sums of federal funding indirectly – meaning grants are sent first to a state agency or municipality, which then awards it to a nonprofit.
While Trump’s order was distressing, some of that fear was mitigated by this multi-layered process of awarding grants. In other words, if federal funds temporarily stall, a state agency or municipality might use its own resources to maintain funding for social service nonprofits, at least temporarily.
But other community nonprofits receive a mix of federal funds – some sent indirectly via state or municipal agencies, and other grants sent directly. For these groups, Tuesday’s order was fraught with uncertainty.
“We’ve got a lot of unknowns,” said Jenn Paradis, executive director of the Beth-El Center in Milford, which provides emergency food and shelter, homelessness prevention and supportive housing services to about 1,000 clients annually. “We are really operating on a very much an unknown space.”
The Beth-El Center largely receives federal grants filtered through the state departments of Housing and of Mental Health and Addiction services, as well as through the town of Milford. But it also receives a grant directly from the U.S. Department of Veterans Affairs.
Paradis said Tuesday afternoon she still was assessing how much federal funding might be stalled if the Trump order isn’t set aside by a court injunction or if the flow of federal dollars otherwise doesn’t resume promptly.
She noted her nonprofit could not process claims electronically for federal reimbursement Tuesday for services already provided to clients.
If federal funding remains stalled, the ability to provide full services, without cutbacks, might be limited to a month or two, she said.
“I still think there’s no clarity for a lot of” nonprofits and their clients they serve, said Casa, adding that even rumors of federal cutbacks could convince some in need to stop pursuing help.
“I think it’s possible that it will have a chilling effect,” he said.
The CEO of the association representing Connecticut’s 17 federally qualified health centers echoed Casa’s concerned.
“We are alarmed about this so-called “pause” in federal funds, which cuts off federal funding to Community Health Centers,” said Shawn K. Frick. This funding is needed to pay our 5,000 employees who provide care to over 440,000 people living in Connecticut each year.”
The centers and their roughly 5,000 staff members provide medical, dental and behavioral health services to more than 440,000 patients annually and are the primary source of care for much of Connecticut’s urban poor population.
And while 60% of their funding comes from Medicaid – which Trump’s order doesn’t affect – other federal resources were in the crosshairs.
For example, Section 330 of the U.S. Public Health Service Act pays a significant portion of salaries. Cripple staffing resources, and many programs could be affected.
The centers receive other federal grants to expand their operations in school-based health centers in poor urban districts and to bolster behavioral health programs.
“If the freeze is not lifted, health centers across Connecticut will begin to lay off staff, reduce services, and close locations,” Frick said. “We call on the administration to lift this freeze immediately, to protect the health and wellbeing of our patients, staff, and communities. Further, we ask the state of Connecticut to take whatever actions are necessary to support our safety net during these unprecedented times.”
Homelessness and housing providers scrambling
Much of the funding for the state’s homelessness services system comes through the federal government, and providers on Tuesday were scrambling to figure out what the order means for them. Sarah Fox, president of the Connecticut Coalition to End Homelessness, said federal funding is key to keep people warm and safe
“We depend on critical programs to keep people housed and keep people safe,” Fox said. “And this safety net is something that we depend on. Any fracture within the safety net, any pause on critical assistance, is something that we need to look into, and we need to respond to, and in a way that makes sense for all of our neighbors.”
David Rich, chief executive officer at the Housing Collective, said money that goes directly to the regional agencies that coordinate homelessness services totals about $95 million annually in Connecticut. About 5,000 people in Connecticut are experiencing homelessness, according to data released earlier this month.
Fox said uncertainty within other programs that aim to keep people from losing their housing also have providers worried. Service providers have long been stretched thin and working with full or near-full shelters. An influx of people losing their homes would be difficult for the system to handle.
Tens of thousands more people in Connecticut get rental assistance through a variety of federal programs including the housing choice voucher program, also known as Section 8. The Trump administration on Tuesday released a memo stating that direct services wouldn’t be impacted, but it wasn’t immediately clear which programs would be included under the freeze.
Shenae Draughn, president of Elm City Communities, said in a written statement that public housing and other federal funds used to create programming and provide housing for New Haven Housing Authority residents could be impacted. The loss of the funding would cause “irreparable harm to the residents,” she wrote.
She added that while they are still assessing the situation, it doesn’t appear that Section 8 will be impacted.
Homeless service providers that have contracts with the U.S. Department of Housing and Urban Development to offer services such as rental assistance don’t know how or if they’re going to get paid after the normal portal for payment closed Tuesday, said Cathy Zall, executive director at the New London Homeless Hospitality Center.
Most providers with these contracts incur expenses, then submit them through the portal for reimbursement. So it’s not just future payments they’re worried about. Many hadn’t gotten expenses for the past few weeks or months covered yet, Rich said.
“How do we keep these agencies afloat?” Rich said.
In the medium to long term, housing advocates fear that federal programs to build or maintain affordable housing will lose funding. Many municipalities use federal Community Development Block Grants to build or rehabilitate housing, and the federal Low Income Housing Tax Credit program is among the largest programs in the nation to build more affordable housing.
Stress to system of care
Though a memo circulating Tuesday afternoon said that the SNAP program would not be impacted by the pause, advocates like Jason Jakubowski, the President and CEO of Connecticut Foodshare, were shaken.
“If there were to be major cuts, or if the SNAP program were to go away, we don’t have enough food at our food bank, nor any other in the country, to make up the difference.”
Even a pause in the SNAP program, which provides far more food to Connecticut’s low-income families than the food bank, would put tremendous stress on Connecticut Foodshare, Jakubowski said, an organization that is already seeing a huge demand.
“It would be like replaying March, April, May of 2020 all over again,” Jakubowski said. “We would be able to survive, but we would be purchasing a ton of food on our own.”
Lisa Tepper Bates, the CEO of the United Way of Connecticut, said that most of the funding for the 988 suicide hotline, which launched in Connecticut in 2023, is federal.
“We haven’t heard anything, which we hope is good news,” Tepper Bates said. At the same time, she isn’t sure what a funding pause could mean for the hotline if it is impacted. “So, it’s pretty nerve wracking.”
Tepper Bates said that the 211 help line, though funded with state dollars, was also of concern. “A lot of the resources that we are able to connect people to through 211 are at risk,” she said.
Planned Parenthood of Southern New England said the freeze could impact their ability to provide preventative health services.
“To date, Planned Parenthood of Southern New England has received $1.24 million in federal Title X family planning program funding. The status of nearly $700,000 in additional Title X funding this year is now in jeopardy due to the federal funding freeze,” Gretchen Raffa, chief policy and advocacy officer at Planned Parenthood of Southern New England, said. “These federal family planning funds are used to provide birth control, pregnancy testing, STI screening, and other preventative health services at PPSNE health centers across Connecticut.”
State Rep. Toni E. Walker, D-New Haven, longtime co-chairwoman of the General Assembly’s Appropriations Committee, said state legislators wouldn’t lose sight of those services in jeopardy.
“When someone feels that they can turn out the lights on people by just flicking a switch on the portals of money,” Walker said, “we have a problem we have a serious problem.”