Editor's Note

Welcome to the first edition of This Month in Policy - a digest of what’s happening in Harrisburg and Washington, what it means for Pennsylvania nonprofits, and what you can do. 

We want this to be the place where you learn the most current nonprofit policy-related happenings. We want you to know how to engage. While this newsletter will provide an overview of key policy updates from the previous month, we'll still share special alerts throughout the month when there are time-sensitive developments requiring immediate action. Plus, the following are updated weekly with the latest news - bookmark and/or follow:

• Our website
• The PANO Navigator
• Our social channels - LinkedIn | Facebook | Instagram

Until Next Time,
Anna Keilly, Senior Manager of Policy & Advocacy, PANO

3 Things to Do NOW

The policy environment has felt overwhelming lately, between the Department of Homeland Security (DHS) partial shutdown, fiscal fallout from the U.S.-Iran conflict, federal funding freezes, and another possible state budget standoff. This month, here are three things to focus on:

1. Attend a Regional Legislative Breakfast.
   Building relationships with your legislators now is the most effective thing you can do before a potential June impasse. 
2. Watch the GSA Grant Rule.
   If your organization receives federal grants, review your compliance posture now. PANO will track the final rule and share updates.
3. The State Budget.
   Governor Shapiro’s $53.3 billion proposal and Senate Republican opposition are on a collision course. Your engagement with legislators before June matters.
   
   

Beyond these three areas of immediate focus, below are several other federal-level and state-level developments to be aware of coming out of March.

FEDERAL UPDATES

1.  DHS Partial Shutdown

The big picture: The Department of Homeland Security (DHS) remains in a partial funding lapse as of April 1 due to ongoing congressional deadlock. While the Senate has passed a funding measure, it is currently stalled in the House.

Why it matters: Nonprofits relying on FEMA grants, DHS contracts, or immigration-adjacent services should plan for continued delays.

More details: Continue reading about the partial shutdown here.

 2.  U.S.-Iran Conflict: Budget Fallout

The big picture: The conflict began in early March and is already reshaping federal spending. The first week carried an estimated $11.3 billion price tag; a supplemental appropriations request of roughly $50 billion is being prepared.

Why it matters: Supplemental military spending competes directly with domestic discretionary funding. Federal grants for housing, human services, and community programs, which are already under pressure, face additional erosion as war costs mount.

More details: Continue reading about what the U.S.-Iran conflict means for federal funding here.

3. GSA Grant Certification Proposal

The big picture: The General Services Administration (GSA) proposed sweeping new certification requirements for all federal grantees, including nonprofits, with civil and criminal penalties attached. The broadly written requirements raised serious concerns that organizations would forgo federal funding entirely rather than risk legal exposure.

Why it matters: The National Council of Nonprofits coordinated opposition and the public comment period closed March 30. But the fight isn't over - PANO will share updates on the final rule as it develops. If your organization receives federal grants, this remains an issue to watch closely.

More details: Continue reading about the proposed GSA grant rule here.

4.  Federal Funding Cuts

The big picture: Four active developments are hitting PA nonprofits:

• HHS Grant Freeze: The Department of Government Efficiency (DOGE)’s ‘Defend the Spend’ initiative has frozen HHS healthcare grants, creating backlogs at NIH and the Administration for Children and Families.
• Combined Federal Campaign (CFC) Decommissioned: The online portal shut down March 4, ending a key federal employee giving channel. The program’s future is uncertain.
• Public Service Loan Forgiveness (PSLF): A proposed Department of Education rule would restrict eligible employers based on organizational mission. Litigation is ongoing - outcomes will affect nonprofit workforce recruitment and retention.
• DEI Executive Orders: Courts have partially blocked DEI-related executive orders. Agency-level enforcement continues. Nonprofits engaged in equity work should monitor grant terms and compliance requirements closely.

More details: Continue reading about disruptions to federal funding here.

STATE UPDATES