A South Texas nonprofit says it lost $1.5 million in federal grants overnight, highlighting growing concerns about funding stability for essential services.

CORPUS CHRISTI, Texas — A Coastal Bend nonprofit that provides mental health and substance abuse services to some of the region’s most vulnerable residents saw $1.5 million in federal grant funding abruptly canceled late Tuesday night — only to have it reinstated days later.

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The Coastal Bend Wellness Foundation said it received an email from the U.S. Department of Health and Human Services late Tuesday notifying the organization that three separate federal grants had been terminated immediately.

“I’ve never had a grant or a contract that was terminated at 10 something at night without any notice or cool down period so we could strategize and plan what to do next,” said Bill Hoelscher, CEO of the Coastal Bend Wellness Foundation.

Hoelscher said the three grants funded programs serving 185 people across South Texas and supported the employment of 12 staff members. The sudden termination meant the organization could not even guarantee staff pay or continue services the following day.

“All three of them were terminated, it said immediately, which means we could not even pay for staff to come in the next day to try to facilitate services or find locations for clients to continue receiving services,” Hoelscher said.

The Coastal Bend Wellness Foundation was not alone as mental health and substance abuse focused nonprofit organizations across the country reported receiving similar termination notices before the federal government reversed course and restored the funding on Thursday.

Despite the reinstatement, Hoelscher said the incident raises concerns about the stability of federal funding for essential community services.

“When you get a contract, that money is already sitting there, it’s already approved, it doesn’t get reapproved every year,” he said. “That’s why ending a contract, not just at the end of the year, but midyear, doesn’t make any sense, because that money has been allocated by Congress.”

Hoelscher said he hopes local elected officials will advocate for nonprofits that provide services municipalities may not be able or willing to fund on their own.

“Without this funding, this support, we will see an increase even more in homelessness, in severe mental health issues and in substance misuse,” he said. “We are kind of that safety net that no one else is providing, and we cannot do it without funds.”

Hoelscher said he is cautiously optimistic the foundation can temporarily maintain the three affected programs following the funding reinstatement, but added that their long-term sustainability will depend on the political climate.