In January, SAMHSA abruptly terminated $2 billion in grants—then reinstated them a day later. In the aftermath, organizations are left wondering: What’s next?
Late on the evening of January 13, the termination letters started hitting inboxes.
They went to the program managers for mental health and substance use disorder (SUD) programs and services across the country: Mental health first aid for high school students. An infant and early-childhood mental health program serving kids with complex medical problems. An employment program for people recovering from SUDs. A technical assistance center supporting organizations working with refugees and migrants. The list went on and on.
The letters—all from the Substance Abuse and Mental Health Services Administration (SAMHSA), the federal agency that leads public behavioral health efforts—stated in no uncertain terms that the grants funding these programs were terminated effective immediately. The only explanation was that the programs were no longer aligned with the Trump administration’s priorities.
Panic washed through the mental health system. Almost immediately after Heather Gotham, Ph.D., received the email from SAMHSA, her phone began buzzing with texts and emails as she and her colleagues tried to understand the breadth of the impact. Gotham is the principal investigator and director of the Center for Mental Health Implementation Support at the Stanford Center for Dissemination and Implementation.
“We were shocked,” Gotham said. “Everyone was floored. By the morning, we understood that this wasn’t just an isolated grant. This had happened across SAMHSA’s discretionary grants.”
“The response was huge,” said Laurel Stine, J.D., M.A., chief advocacy and policy officer for the American Foundation for Suicide Prevention. “Immediately, everyone leapt into intel sharing, because the reports were coming from all over the place.”
All told, approximately 2,800 discretionary SAMHSA grants totaling an estimated $2 billion were terminated. Mental health institutions and programs started scrambling. Some sent layoff notices. Groups issued statements calling the terminations “cruel” and “unconscionable.” Advocacy organizations, including APA, quickly pulled together action alerts to warn Congress of the impact and urge them to have SAMHSA restore the grants.
And then, about 24 hours later, on the evening of January 14, media started reporting that the grants had been restored.
“As thankful as I am for that—and I am very, very thankful—it’s not like it didn’t happen,” Gotham said. “It’s not like this wasn’t a traumatic event. It’s not like we could just pick up exactly where we had left off on [January] 12.”
‘We Do Have Some Power Here’
There has been no explanation from SAMHSA as to why the $2 billion in grants were terminated and then reinstated. The agency didn’t respond to a request for comment for this story.
Yet every expert interviewed for this story agreed: The ramifications of those 24 hours will spread far into the future. “Behind every SAMHSA grant is a system that’s designed to save lives,” Stine said. “And those systems require continuity.”
While SAMHSA’s discretionary grants are typically time-limited, terminating them in the middle of a grant cycle is very unusual, Stine said. Discretionary grant also differ from SAMHSA’s block grants—which are noncompetitive and doled out to states based on a formula mandated by Congress—in that they allow grantees the opportunity to implement pilot programs and targeted interventions to meet specific needs in their communities.
Though the mental health system was shocked by the terminations, researchers, clinicians, and advocates also reported feeling emboldened by the overwhelming response not only from within their community but from outside as well. “I had individuals from all over the health-funding world reach out and say, ‘What can we do? We want to help, because we know this is a public health crisis,’” Stine said.
On January 14, there was a public outcry about the impact of the terminations, which quickly got the attention of members of Congress from both sides of the aisle. Dozens of representatives signed on to a letter to Health and Human Services Secretary Robert F. Kennedy Jr. seeking an explanation.
“It was heartening to see that response,” said Margie Balfour, M.D., Ph.D., chief of quality and clinical innovation at Connections Health Solutions and an associate professor of psychiatry at the University of Arizona. “With how hard it has been historically to overcome the stigma around mental health, that response illustrated how far we’ve come.”
Over the past year, many people in the mental health world have felt powerless as they’ve seen grant terminations and the diminishment of SAMHSA’s workforce. “But the bipartisan response and the way the mental health world rallied together really made it feel like we do have some power here,” Balfour said.
Long-Term Damage
For many doing the everyday work of supporting people with mental health and SUDs, the 24-hour period in January was a microcosm of the past year of uncertainty. And they were left wondering: Where do they go from here?
Reversing the grant terminations couldn’t repair the damage that was done, said Gaurav Mishra, M.D., M.B.A., chief medical officer for Santa Fe Springs, California–based Mindhealth Wellness and an advisory board member for the Resource & Empowerment Technical Assistance Center for Behavioral Health. He emphasized how much time, effort, and money it takes to get new, innovative programs off the ground in the first place. Without steady support, organizations are going to stop taking risks on innovative ideas.
“Those terminations caused a lot of fear in many organizations, and now they don’t want to take chances, even if there is funding coming their way,” Mishra said. “They’re thinking, ‘What if it goes away in a year?’”
Larger organizations may be able to absorb the shock of a lost grant, but smaller, community-based organizations don’t have that buffer. The loss of a $2 million grant can essentially end a program. “For those organizations, after going through this, they’re going to think conservatively and possibly rethink planning for much-needed new and innovative clinical services,” Mishra said. “Everybody would. I would if I was in that situation. That’s the long-term damage this situation causes.”
Many organizations are going to focus on the programs they must offer, like acute care for individuals in immediate need. They may be less likely to invest in preventive or supportive programs, such as peer support or case management. Yet those are also the services that insurers are less likely to reimburse for, Mishra said,which is why SAMHSA grants are vital for filling in the gaps.
“Services like case management, care navigation, peer support, SUD counselors, and community health workers are essential,” Mishra said. “As a psychiatrist, I’ll see a patient once a month. If they don’t have all these other services supporting them, they’re going to come back to me in a month even worse than before.”
A Precarious Funding Structure
In New Jersey on January 14, Morgan Thompson, M.S.W., and her team were trying to figure out how to rebound after losing two grants that funded six positions.
“It sent shockwaves through the entire community,” said Morgan Thompson, M.S.W.
Thompson is the CEO of Prevention Links, an organization that provides prevention services and non-clinical support for people in recovery from SUDs, including operating three recovery community centers. One of the SAMHSA grants that Prevention Links lost funds a program that integrates peer recovery specialists into treatment settings. The other supports workforce initiatives, allowing the organization to connect people in recovery with job coaching and training. The program serves about 125 people at any given time.
Thompson wasn’t the first to hear about the terminations—Prevention Links project directors were, which she said was devastating. “Ideally, I would get the information first and then figure out a strategy to communicate with the team,” Thompson said. “But all they were hearing in the news was that behavioral health grants are being canceled, and almost everyone at the agency—the hundred plus staff we have—feared that they were going to lose their jobs.”
She ended up not having to send layoff notices to the six staff members whose positions were funded by the grants, but said she probably would have had to eventually. “It sent shockwaves through the entire community,” Thompson said. “In this world, six full-time positions is a lot. The centers we run are dependent on staffing. If we only have two people at a location on a given day, it dramatically affects our operating hours. It brings light to a bigger issue that all of these services are really precariously funded.”
The consensus advice from experts after SAMHSA’s grant terminations has been that organizations need to diversify their funding streams so they aren’t reliant on one particular source. But that’s easier said than done. “There aren’t a lot of options for non-clinical peer support and prevention,” Thompson said. “It’s been months, and I haven’t seen a single new notice of funding opportunity for these types of services.”
Plus, other federal agencies can’t quite meet the needs of the populations that SAMHSA serve. Thompson said that the Department of Labor may start to make funds available that organizations like hers could apply for, but working with that agency is “kind of a square peg in a round hole,” she said. “It creates obstacles for people in recovery because there are all sorts of stigmatizing documentation requirements that they have to go through.”
Worst-Case Scenarios
The importance of preventive and supportive services can’t be understated, but they become luxuries in a world where funding is strapped and organizations are also responsible for caring for patients in immediate, acute need.
And yet, preventive services are a better use of mental health dollars, noted Rochelle Head-Dunham, M.D., executive director and medical director of the Metropolitan Human Services District in New Orleans. “Crisis management, outpatient settings, and emergency departments are incredibly expensive,” Head-Dunham said. “Prevention saves money, it’s a more efficient use of the professionals we have, and it leads to a healthier community.”
When SAMHSA temporarily terminated its grants, Head-Dunham’s organization was at risk of losing funds for mental health first aid, which has been an incredibly popular, effective prevention initiative. Her staff were prepared, though: They’re used to uncertainty when it comes to funding, even as it has gotten worse over the past year. “You’re always waiting for the other shoe to drop,” Head-Dunham said.
In fact, her staff had anticipated this very shoe when she’d directed them to develop scenarios of the unimaginable. “What’s the worst scenario you could think of, and what would we do?” Head-Dunham said. “This very situation is one of the scenarios we came up with. So, we’ve been desensitized to some degree, because we’ve prepared for it. We know that no matter what, we have to keep doing the work.”
Published: online-Psychiatry online 2.11.2026
Written by: Katie O’Connor
