Top takeaway: A new OMB proposal would create significant financial risk and instability for federal grantees, including nonprofits, making it more difficult to provide vital services to communities. Sign the national letter opposing the proposal by July 13.
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 (read the full proposal).
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, or change terms and conditions mid-performance, forcing grantees to operate in a shifting environment.
- Allow an administration to determine federal awards based on partisan ideology, rather than objective criteria, community needs, and congressional intent, while decreasing public transparency through the process.
- Bar any federal funding from being used to promote “unlawful” diversity, equity, and inclusion (DEI) efforts. However, many DEI-related practices and policies that the administration claims are unlawful have been upheld by courts as permissible under the law or can be administered lawfully. Those most impacted are people of color and their communities, which have experienced historic and ongoing federal disinvestment.
If implemented:
- Grantees will be faced with unpredictable financial, legal, and reputational risks that increase the costs of accepting federal awards while decreasing the benefits. 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.
Take action
The National Council of Nonprofits encourages nonprofits to take action by July 13 by:
- Signing a national letter.
- Using NCN’s comment guide to submit a public comment.
- Emailing your members of Congress in opposition to the proposal.