What a Government Shutdown Means for Information and Referral

This article was written in October of 2023, following a near-shut-down of the U.S. Federal Government. 

The nice thing about a close call is that it forces us to prepare. That is what happened last week when it appeared a government shutdown was unavoidable. Information and Referral (I&R) centers mobilized in anticipation of increased demands, and I&R services provided through the U.S. military prepared to furlough until further notice. While Sunday’s last-minute budget vote was anti-climactic, it was an incredible relief to those who would have felt the impact most acutely. 

While the uncertainty loomed large, Inform USA had the benefit of meeting with our partners at United Way Worldwide, the National 211 Steering Committee and the U.S. Military to better understand and prepare for a potential shutdown. Knowing that a future shutdown is possible and likely, we’re proactively sharing what we’ve learned so our members can feel prepared for the future. 

Overview

This is not the first time this has happened, and it is not likely to be the last. Previous shutdowns occurred in 2013 for 16 days (Clinton Administration) and 2018 for 25 days (Obama Administration). As with past shutdowns, services deemed non-essential cease operations, and the federal employees handling those non-essential services will be furloughed. Examples of “essential” services include the postal service, military, and congress (hmmm…). This website has the latest information on contingency plans and how agencies may operate during a shutdown.

What does the government shutdown generally mean for nonprofit organizations?

Your Nonprofit Status is Not Considered Essential

Sad, but true. If you are pursuing tax-exempt status from the federal government, your wait may be extended beyond the typical 1-3 months for the short form and 3-6 months for the long form. 

Federal Contractors Are Not Paid

If your organization has a contract for services with the federal government, you will not receive payments during a shutdown period. 

Existing Federal Grants are Honored

If you were awarded a federal grant before a shutdown, you will still receive funding; however, if you are in the approval process or seeking to apply for a federal grant opportunity, the process will be delayed as long as a shutdown is in place. 

What does the government shutdown mean for those your I&R center serves?

If your organization serves vulnerable populations, this is where you will feel the most significant impact as critical services like Medicare, Medicaid, and family aid programs are affected. 

Health and Human Services

• Medicare payments are expected to continue; however, new enrollees may be delayed after a shutdown until furloughed employees return to work.

• Medicaid will continue as contingency funds allow the program to operate through roughly the end of 2023.

• Children could immediately lose access to Head Start programs since new grants cannot be initiated during a shutdown.

USDA

• Some contingency funds are available for the Supplemental Nutrition Assistance Program (SNAP) and Women Infants and Children (WIC) to continue beyond a shutdown phase. 

• There is concern over WIC program vouchers; some states have limited funds to continue the program, so persons trying to redeem these vouchers may be turned away from retail counters within days as funds are exhausted.

HUD

• The HUD program currently has two months of operating reserves that can be advanced to public housing authorities.

• No new applications can be accepted during a shutdown.

• Monthly assistance programs, including Section 8 Housing Choice vouchers, public housing, and multi-family assistance contracts, can continue as long as funding is available.

• FHA housing work will continue, although processing of new or closing of loans in progress may be delayed until staffing is available.

Social Security

• Social Security payments will continue as scheduled.

• New applications for survivor benefits, retirement benefits, SSDI, and SSI will continue. Hearings will continue as scheduled.

• A few non-essential processes, such as benefit verifications, will be suspended during a shutdown.