National Endowment for Democracy v. United States of America

CourtDistrict Court, District of Columbia
DecidedAugust 11, 2025
DocketCivil Action No. 2025-0648
StatusPublished

This text of National Endowment for Democracy v. United States of America (National Endowment for Democracy v. United States of America) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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National Endowment for Democracy v. United States of America, (D.D.C. 2025).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

NATIONAL ENDOWMENT FOR DEMOCRACY,

Plaintiff, No. 25-cv-00648 (DLF) v.

UNITED STATES OF AMERICA, et al.,

Defendants.

MEMORANDUM OPINION

National Endowment for Democracy brings this action to enjoin the federal government

and federal executive agencies from withholding congressionally appropriated funds. Before the

Court is the plaintiff’s Motion for a Preliminary Injunction. Pl.’s Mot., Dkt. 40. For the reasons

that follow, the Court will grant the plaintiff’s motion.

I. BACKGROUND

National Endowment for Democracy is a private, nonprofit organization formally

recognized under the National Endowment for Democracy Act of 1983 (NED Act), 22 U.S.C.

§§ 4411 et seq. The Endowment’s mission is to “encourage free and democratic institutions

throughout the world through private sector initiatives, including activities which promote the

individual rights and freedoms (including internationally recognized human rights) which are

essential to the functioning of democratic institutions.” Id. § 4411(b). As a grantmaking

organization, the Endowment funds grantees both directly and through four “core institutes”: the

International Republican Institute, the National Democratic Institute, the Center for International

Private Enterprise, and the Solidarity Center. Wilson TRO Decl. ¶¶ 3, 9, Dkt. 5-2. On a yearly basis, the Endowment and its core institutes support approximately 2,000

nongovernmental projects in over 100 countries. Id. ¶ 3. The Endowment’s projects aim to

promote “long-term U.S. interests by fostering stability, countering authoritarian influence, and

reducing the drivers of extremism and migration.” Wilson Supp. Decl. ¶ 3, Dkt. 40-2. Grantees

work with local partners to, for example, “heighten public pressure on the Iranian regime by

highlighting government diversion of funds to opaque security and defense channels”; “identify,

analyze, monitor, and expose the Chinese Communist Party’s influence operations in South and

Southeast Asia”; and support “democratic activists . . . as they adapt and plan the next steps in

their movements to counter . . . authoritarian regimes.” Id. ¶ 74. Many grantees operate in high-

risk environments, under oppressive regimes, and depend on the Endowment’s financial support.

Id. ¶¶ 64, 74, 82.

Congress funds the Endowment through annual appropriations. The NED Act provides

that the State Department “shall make an annual grant to the Endowment to enable the Endowment

to carry out its purposes” and that “[s]uch grants shall be made with funds specifically appropriated

for grants to the Endowment.” 22 U.S.C. § 4412(a). When providing grants, the State Department

“may not require the Endowment to comply with requirements other than those specified in” the

Act. Id.

Every year since the Endowment’s founding in 1982, Congress has enacted appropriations

that the Endowment has received in full over the same fiscal year. Wilson Supp. Decl. ¶ 32. After

Congress appropriates funding, the Office of Management and Budget (OMB) “apportions” those

funds by setting a schedule to determine when they will become available to the relevant executive

agency—here, the State Department. See GAO, A Glossary of Terms Used in the Federal Budget

Process, GAO-05-734SP, at 12–13 (Sept. 1, 2005). In recent years, OMB has apportioned the full

2 amount of the Endowment’s funds upon the enactment of a full-year appropriations law. See Pl.’s

Mot., at 7 n.2. The State Department then “obligates” those funds to the Endowment, and the

money is set aside for the Endowment in its Treasury account. See Wilson TRO Decl. ¶ 16. The

Endowment, and its grantees, obtain money on an as-needed periodic basis. Wilson Supp. Decl.

¶ 8 (“NED can only access the obligated funds [in its Treasury account] by regularly requesting

payment drawdowns based on spending.”); id. ¶ 13 (“[A] grantee does not receive the full amount

of the grant up front[.] . . . [P]ayments are tied to submission of scheduled progress reports and

other deliverables.”).

For fiscal year 2024, Congress appropriated $315,000,000 in “no-year” funds for the

Endowment’s use. The relevant Further Consolidated Appropriations Act provided “[f]or grants

made by the Department of State to the National Endowment for Democracy, as authorized by the

National Endowment for Democracy Act (22 U.S.C. 4412), $315,000,000, to remain available

until expended.” Pub. L. No. 118-47, 138 Stat. 460, 737 (2024). For fiscal year 2025, Congress

passed three continuing resolutions providing that same level of funding, “under the authority and

conditions provided” in the 2024 appropriations act. See Pub. L. No. 118-83, 138 Stat. 1524

(2024); Pub. L. No. 118-158, 138 Stat. 1722 (2024); Pub. L. No. 119-4, 139 Stat. 9 (2025). “No-

year” appropriations—denoted by the “available until expended” language—are available for

multiple fiscal years and do not expire. See GAO, Principles of Federal Appropriations Law (Red

Book), at 5-7 to 5-9 (3d ed. 2004); Wilson Supp. Decl. ¶ 7 (“Congress typically appropriates “no-

year” funds to the Endowment, which means that the money does not expire, affording the

Endowment vital flexibility to fund long-term projects that incur expenses over multiple years.”).

At the end of January 2025, the Endowment began encountering difficulties in accessing

its money. It did not receive roughly $97 million in routine drawdown requests from its Treasury

3 account, and the State Department delayed the obligation of an additional $72 million in

apportioned funds. Wilson TRO Decl. ¶¶ 26–31. Unable to meet ongoing operational costs, the

Endowment was forced to furlough significant numbers of staff and default on obligations to

grantees. Id. ¶¶ 35, 40.

On March 5, 2025, the Endowment filed suit. Compl., Dkt. 1. It also moved for a

temporary restraining order. TRO Mot., Dkt. 5. Five days later, on March 10, the Endowment

received the $97 million in requested drawdowns and the State Department represented that it was

in the process of obligating the additional $72 million in funds. Dkt. 14. The Court granted the

parties’ request to hold these proceedings in abeyance. See Minute Order of Mar. 11, 2025.

The defendants continued to slow-walk disbursements. On March 13, after the Endowment

submitted a $450,000 drawdown request, State Department officials informed the Endowment that

a “waiver” was required to access the funds. Wilson Supp. Decl. ¶ 17. The requirement was later

withdrawn and the Endowment received the requested funds on March 21. Id. In April and May,

OMB apportioned funds to the Endowment in 30-day increments, deviating from its previous

practice of making full annual appropriations available upon enactment. Dkt. 17. In early May,

the Director of OMB submitted a budget request for fiscal year 2026 to the Senate, proposing to

eliminate the Endowment’s funding entirely. See Letter from Russell T. Vought, Dir., OMB, to

Sen. Susan Collins, Chair, Comm. on Appropriations (Vought Letter), at 3 (May 2, 2025),

https://www.whitehouse.gov/wp-content/uploads/2025/05/Fiscal-Year-2026-Discretionary-

Budget-Request.pdf. Id.

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