What Every Fundraiser Needs to Know About the OMB Proposed Changes to Federal Grantmaking

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

AFP has signed on to the National Council of Nonprofits' letter opposing these changes. We encourage your organization to add its name to this letter and consider submitting a personalized public comment before the July 13 deadline.

What's Being Proposed and What's at Stake

The Uniform Guidance establishes the standards governing how federal grants are awarded, managed, and overseen. It provides the consistent, predictable framework that allows nonprofits to plan programs, hire staff, and deliver services with confidence.

The proposed changes, outlined below, would create significant instability in the grantmaking process and would fundamentally shift the balance of power in federal grantmaking. 

Grants could be terminated or suspended without cause. Under the proposal, federal agencies would have the authority to terminate or suspend discretionary grants mid-performance, without providing grantees an administrative hearing or appeals process. 

Award decisions could be driven by politics, not merit. The proposal would create a pre-approval process allowing political appointees to exclude grant proposals that don't align with "federal agency priorities and the national interest," without grantees knowing whether or why they were rejected. This undermines the merit-based, transparent process that makes federal grants credible to funders and communities alike.

Terms and conditions could change mid-performance. Under the proposed rule, agencies could alter the terms of a grant after it has been awarded and work has begun. For nonprofits managing multi-year programs, this creates enormous financial and operational uncertainty. It also makes it harder to attract and retain private philanthropic support if donors are not confident in the future of the programming they are investing in.

Nonprofits may be forced to choose between values and funding. The proposal would bar federal funding from supporting diversity, equity, and inclusion efforts that the administration deems "unlawful" — even where courts have found such practices to be legally permissible. Many nonprofits could find themselves unable to apply for federal grants without compromising their core organizational values or other legal requirements.

Why This Is a Fundraising Issue

Fundraising professionals feel the effects of unpredictability directly. Federal grants frequently represent a significant and reliable source of funding for core programs that our donors invest in and our missions depend on. Changes to how those grants are awarded and administered have direct implications for organizational budgets, funding strategies, and the case for philanthropic support.

For fundraisers, this additional instability arrives at a particularly difficult moment. Since the start of 2025, the sector has already been grappling with significant uncertainty around federal funding. Executive orders, grant terminations, and funding freezes left many nonprofits scrambling to understand the status of awards they had planned around and staffed for.

The latest data makes clear that private philanthropy cannot simply absorb that kind of shortfall. According to the Q4 2025 Fundraising Effectiveness Project report, overall giving grew 5% in 2025 — the strongest rate in five years — but that growth was driven almost entirely by major and supersize donors. The total number of donors declined for the fifth consecutive year. The sector is already leaning heavily on a narrowing base of large individual donors. Giving USA 2026 reinforces this picture: individual giving — which represents nearly two-thirds of all charitable giving — grew just 1.4% after adjusting for inflation, against a backdrop of low consumer sentiment.

Federal grants provide something that individual donors cannot easily replicate: reliable, multi-year funding tied to specific programs and communities. When that funding is destabilized, terminated mid-performance, withheld indefinitely, or made subject to political review, organizations face funding gaps that are difficult to fill. The proposed changes to the Uniform Guidance would make that kind of instability a permanent feature of federal grantmaking, not an exception.

What You Can Do Before July 13

Already, nearly 40,000 public comments have been submitted by nonprofits concerned about the impact of these changes, and the sector is aiming for one million before the deadline. Organizations of all types are speaking out. As the American Heart Association noted in its statement, "abrupt, haphazard or disruptive changes" to federal grantmaking "could have unintended consequences for scientific discovery, research investment and public health programs." The same is true for virtually every cause area AFP members represent.

AFP encourages all members to take action before the July 13 comment deadline:

• Sign the national letter. AFP has already signed on to the National Council of Nonprofits' letter opposing the proposed changes. Add your organization's name. Nearly 1,000 organizations have already signed. Sign the letter. 
   
• Submit a public comment. Comments that reflect your specific experience — your organization's reliance on federal funding, the communities you serve, the programs at risk — carry real weight in the rulemaking process and later in possible litigation efforts by other groups. NCN has created a comment guide with templates and talking points to help you get started. Here are comments from our colleagues at Grant Professionals Association with some specific examples. Personalize it for maximum impact. Use the NCN’s comment guide. 
   
• Email your members of Congress. Representatives are circulating letters urging OMB to rescind the rulemaking. Let your congressional representatives know you want them to sign on. Email your members of congress. 
   
• Share these resources widely. Forward this post to your colleagues, share it with your board, and raise it in any coalitions or peer networks you participate in. The sector is aiming for one million comments so every voice matters.