Congress Hit Snooze on the Federal Grant Overhaul. Here's Your Group Project.
I’m a grant writing consultant. My whole professional identity is built on the ability to read through and understand 97-page funding notices so you don’t have to. I’ve learned to love Section 4.3(b) of things. So, when the federal government proposes rewriting the rulebook for every federal grant in America, I do what any well-adjusted grant writing professional does: I quietly weep while considering how I will need to update my grant-writing checklist templates.
Here’s what’s happening, why it matters, and what you can do before December 11.
THE SHORT VERSION
On May 29, 2026, the Office of Management and Budget decide to spice things up by proposing sweeping changes to the Uniform Guidance. (You may have seen me, and other fundraising professionals preaching about it on LinkedIn) This is the rulebook for federal grants, cooperative agreements, and other awards available to nonprofits, state and local government, and anyone else who enjoys endless paperwork. If you’ve never read it, congratulations on your life choices. If you have, let’s get coffee and swap sob stories.
The National Council of Nonprofits made a handy dandy chart of the proposed changes and basically said, “This would overhaul and politicize federal grantmaking, and this is why you should be worried…” And luckily nonprofit organizations and professionals stood up collectively to voice our concerns.
Nearly 500,000 public comments were submitted, almost all in opposition of the changes. And Congress, in a rare moment of bipartisan agreement, hit the snooze button and delayed the regulation until December 11. A delay isn’t a win though, it’s just an extension on our group project. So, yes, there’s homework to be done still.
WHY I, A PERSON WHO READS FUNDING NOTICES FOR FUN, AM WORRIED
I read the proposal the way I read everything: Will this wreck your application, your budget, or your ability to sleep at night? Based on the National Council of Nonprofits’ analysis, here’s where my eyebrows did that Spock thing.
Termination gets easier. Under the proposal, an agency could pull the plug on your award if it no longer serves ‘the national interest,’ which is just as vague as it sounds and could change with the political weather or whim of the President. They could also put your award in a 90-day timeout. Try explaining to a family on your housing waitlist that their program is grounded for three months. I’ve written a lot of sustainability sections in my day, and not one of those covers ‘survive arbitrary timeouts.’
The terms can change after you sign. Agencies could decide to swtich up mid-award, like moving you from advance payments to reimbursement. Translation: your nonprofit gets to play the role of bank and front the money. If you organization has a magical cash reserve, please email me so I can write a case study about your unicorn of a nonprofit.
Key terms aren’t defined. By using vague and overly broad terms, such as “Anti-American,” this provision would grant seemingly unlimited discretion to any administration to eliminate any federal program it disfavors. ‘Questionable practices.’ ‘Elevated programmatic risk.’ Conduct that could ‘damage the reputation’ of the federal government. I’ve spent my career helping nonprofits define their terms and programmatic language so reviewers don’t have to play guessing games. But these proposed changes? It’s running on pure vibes.
The paperwork grows. The proposal would eliminated fixed-amount awards, which have lighter requirements that smaller grantees rely on. It would also require payment justification and E-Verify participation, and it would restrict conference costs and membership dues. If your plan was to attend a conference and learn how to manage all this, good luck Chuck.
Your proposal could get the boot before anyone even bothers to score it. If i could grab a highlighter and go to town on one thing, it’s this: the proposal wants a new pre=issuance review, just to double-check that your project is “consistent with applicable law, federal agency priorities, and the national interest.” Whatever that means this week. Translation: even if your proposal is solid, there’s still one more field goal to make, and it can move at any time, before you see a dime.
The proposal also lays out principles for nonprofits to apply. Discretionary awards, would, where applicable, need to demonstrably advance the President’s policy priorities. They could not be used to fund or promote things like racial preferences, the denial of the sex binary, illegal immigration, or “any other initiative that compromise public safety or promote anti-American values.” All else being equal, preference would go to applicants with the lowest indirect cost rates. Nonprofits have spent years explaining that overhead is what keeps the lights on, and that ‘efficiency’ is not the same as ‘unpaid staff.’ And agencies wouldn’t be required to issue an award at all if, in their opinion, it would fund a low-quality proposal or confliect with these principles. They could just repost the opportunity and try again.
Here is my problem, as a grant writer. I can write to a scoring rubric. I cannot write to “anti-American values.” Nobody can, because nobody knows what it means. The National Council of Nonprofits points out that broad, vague terms like that give any administration nearly unlimited discretion to cut off programs and missions it simply doesn’t like. They also note that the proposal doesn’t say whether you’d be told your proposal was rejected, or why, and it doesn’t require agencies to give you any way of challenging the decisions. A rejection with no reason and no appeal process isn’t a review process, but a trapdoor.
Programs built to close gaps could lose their footing. Congress creates federal programs because it decided a problem was worth solving. Some of those programs exist specifically to address longstanding racial, social, or other disparities, or to serve communities that have historically been left out. According to the National Council of Nonprofits, this proposal could threaten those congressionally created programs.
Here's how. The proposal would require agencies and pass-through entities to make sure awards aren't used to fund or promote "illegal" diversity, equity, and inclusion, "gender ideology," or the gender transition of anyone under 19. It would also direct agencies to eliminate disparate-impact liability from federal awards, which means federal funds couldn't support disparate-impact studies or litigation.
Now, the grant writer in me has a question: what counts as "illegal DEI"? The proposal doesn't say. It doesn't define DEI at all. The administration has claimed that certain DEI efforts are illegal. The National Council of Nonprofits notes that courts have upheld those efforts as permissible, or found they can be administered lawfully, and that leading civil rights and pro-democracy organizations disagree with the administration's reading of the law. So we have a ban on something undefined, with the legal question still in dispute. It's like being handed a speed limit with no number on the sign. You find out you were over it when someone pulls you over.
One more change is easy to miss. The proposal removes provisions that bar federal agencies and pass-through entities from discriminating on the basis of sexual orientation or gender identity. The National Council of Nonprofits is clear that this kind of discrimination remains unlawful, but says the change may encourage it, and may be an attempt to keep federal agencies from recognizing transgender individuals. The law may not change, but the guardrails around it come down.
And let's be real here, this isn't about us, the nonprofits or grant writing consultants. It is about the folks on the other end of the programs, the ones actually living with the consequences of these changes. The families in your housing program didn't write a proposal. The kids in your GED classes didn't pick a funding stream. The refugees working through the immigration system aren't a "policy priority" or an "agency preference." They are people who need help, and they rely on the nonprofits in our communities to deliver it. Under this proposal, the question of whether those services get funded could depend less on community need and more on whether the work fits an administration's priorities. As the National Council of Nonprofits puts it, awards should be governed by objective criteria like competition, peer review, programmatic fit, and financial capacity, not partisan ideology.
IN FAIRNESS, THERE’S GOOD NEWS BURIED IN THERE
I promised myself I’d be fair, so here it goes. The proposal WOULD encourage multi-year awards, which is basically a dream come true for nonprofit leaders wearing multiple hats. It would require funding notices to be shorter, less complex, and written in something resembling English, so you may not have to hire a consultant just to understand the requirements.
Yes, that last one is aimed directly at people like me. I’m not mad. A good funding notice shouldn’t need a translator, and I am happy to make myself useful instead of indispensable. Please clap.
The sector’s concern isn’t that every change is terrible. It’s that the good stuff is bundled with the risky ones, like a free tote bag that turns out to be a three-year recurring commitment to receive.
WHAT YOU CAN DO (No Law Degree Required)
Sign or share the national letter. The National Council of Nonprofits reopened its sign-on letter and plans to send it to Congress in November. Nearly 2,000 organizations have signed. The deadline is November 11. If you signed the earlier version, you're already listed, and you can ask to be removed. You can see the updated letter here. It's identical to the earlier one except for one new sentence at the top for Congress.
Call or email your Members of Congress. Both parties, since the delay passed with bipartisan support. Find your member and send a message. The most effective thing you can include is a specific story: what your program does, who it serves, and what a sudden termination or a shift to reimbursement would mean for them. You already know how to write a compelling case for support. This is the same skill, minus the budget narrative.
Mark November 10. It's a national Day of Action. Contact your Members of Congress and post on social media. Think of it as Giving Tuesday, except you're asking for a policy outcome instead of $50 and a better ROI.
AND WHILE YOU’RE AT IT: A QUICK SELF-AUDIT
Whatever Congress decides, now is a good time to ask yourself a few uncomfortable questions:
How many weeks of operating costs could you cover if a federal payment turned into a reimbursement?
Do you know what the termination and suspension clauses say in each of your federal awards? (Reading your own contracts is a radical act.)
Is ferderal money one part of your revenue plan, or the whole enchilada?
If you want help stress-testing your funding mix or building a proposal that holds up under any sets of rules, we’re around. We will bring the spreadsheets, you bring the coffee.