The Uniform Guidance (also known as 2 CFR Part 200) is the set of rules that govern federal grants, cooperative agreements, and other forms of federal financial assistance. Originally issued in 2013, its purpose was to create consistent rules across federal agencies, reduce administrative burden, and strengthen oversight of federal funds.
The Office of Management and Budget (OMB) has periodically revised the guidance, most recently in 2024. Historically, the Uniform Guidance and any updates have been largely administrative rather than political. It has focused on ensuring funds are spent appropriately, internal controls are sufficient, and that grantees are compliant with federal requirements.
Until now.
On May 29, 2026, OMB released a proposed rule that would substantially revise the guidance governing federal funding. The proposed OMB changes are substantial and add a strong political lens to a structure that should remain largely insulated from political shifts.
If passed, these changes would reshape the federal grant landscape by inserting political and ideological considerations directly into federal grantmaking.
Although there are currently more questions than answers, and these proposed changes will likely face legal challenges, there are several major changes organizations should be aware of.
Arguably the most far-reaching change is that the proposed rule would change the Uniform Guidance from non-binding guidelines into regulation. Under the current structure, individual agencies adopt OMB's guidance into their own regulations, which has historically given agencies a degree of flexibility depending on the program, as well as insulation from changes in policy. That flexibility allows agencies to apply the guidance within the context of program goals and operational realities.
Under the proposed rule, OMB would create much more authority at the federal level, reducing agency discretion and limiting the ability of program experts to interpret and apply guidance based on program-specific needs.
For grant recipients, this could mean less flexibility, less agency discretion, and faster implementation of future policy changes.
One of the most concerning changes for organizations is the expanded authority for federal agencies to terminate or suspend awards—including grants already in progress.
The proposed rule would allow agencies to terminate awards if they no longer align with program goals, agency priorities, or national interest at the time of termination. It means termination could be tied not just to compliance issues, but to changing political or administrative priorities—which are yet to be defined and are constantly changing.
We saw this play out this spring when the Substance Abuse and Mental Health Services Administration (SAMHSA) abruptly terminated approximately 2,800 discretionary grants totaling $2 billion. There was significant bipartisan pushback that forced the administration to restore this funding. However, under the proposed rule, this could happen to any federal funding award.
For organizations running multi-year programs, this adds a layer of operational and financial uncertainty.
The proposed rule would codify several executive orders related to diversity, equity, and inclusion (DEI) into the federal grant framework.
Specifically, it would prohibit the use of federal funds to support or promote DEI initiatives, gender identity doctrines, or gender transitions for minors. This change could have a significant impact on service organizations, particularly those that serve historically marginalized communities and whose work centers on access and equity.
Additionally, it is currently unclear whether these restrictions would apply only to the grant-funded portions of an organization’s work, or to the organization’s broader operations, policies, and practices.
Another major change is the introduction of political appointee review before discretionary grants are awarded. Under the proposed rule, senior political leadership would have a more formal role in reviewing awards before issuance, using criteria tied to agency priorities, administration priorities, and the national interest.
This adds another political layer to federal grantmaking. For organizations working in politically sensitive areas—such as immigration, reproductive health, climate, or environmental justice—this could introduce greater uncertainty even before an award is made.
These are just a handful of proposed changes that could significantly impact organizations that rely on federal funding and grant professionals. Changes around immigration status, procurement, and allowable costs may all impact an organization’s ability to provide services and receive federal funding.
The proposed changes can be found here: Regulation for Federal Financial Assistance
The National Council on Nonprofits has helpful and relevant information regarding the changes, as well as an easy-to-follow chart of changes: Proposed Changes to the OMB Uniform Guidance
Even though these changes are still proposed, organizations should start paying attention.
A few practical steps to consider:
These proposed changes would create a more uncertain and more politically influenced federal funding environment. At a time when many communities are facing growing needs, added instability in federal grantmaking could make it harder for organizations to plan, deliver services, and serve the people who rely on them most.
Elisa is a grant strategist for Fox Grants, part of the Fox Advancement family of brands.