Sweeping Changes Proposed to Federal Grantmaking

Posted by PA Association of Nonprofit Organizations (PANO) on June 30, 2026

On May 29, 2026, the U.S. Office of Management and Budget (OMB) proposed sweeping changes to overhaul the set of rules, known as the Uniform Guidance, governing federal grants, cooperative agreements, and other monetary awards to nonprofits, state and local governments, and other grantees.

If implemented, the proposal would create significant financial risk and instability for federal grantees, including nonprofits, making it more difficult to provide vital services to communities. The proposal attempts to grant unprecedented discretion to any administration to withhold, suspend, or terminate grants, and change terms and conditions mid-performance, forcing grantees to operate in a shifting environment. The proposal would allow an administration to determine federal awards based on based on political favoritism rather than objective criteria, community needs, and congressional intent, while decreasing public transparency throughout the process.

Many effective and qualified grantees may be unable to accept those risks. This could lead to disruptions to essential services, including housing, community development, health, education, food, shelter, community services, disaster recovery, and more in communities and states nationwide.

The proposal also threatens important congressionally-funded federal programs that help address longstanding racial, social, or other disparities or serve underserved communities. Those most impacted are people of color and their communities, which have experienced historic and ongoing federal disinvestment.

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