With less than a week to go (July 13, 2026) before the comment period closes on the proposed changes to several portions of 2 CFR concerning grants, especially the proposed changes to the existing Uniform Guidance, what are the key arguments and positions that the nonprofit community should be taking? [Link to earlier blog post on this topic.]
The proposed rulemaking contains more than 300 proposed changes throughout Title 2 CFR Parts 1, 25, 170, 175, 176, 180, 182, 183 and 200, our focus of interest. My advice is that you should definitely comment on those specific provisions that adversely affect your interests as a competitor or recipient of federal funding. When you consider the numerous proposed changes, take a step back and ask yourself these questions:
- Collectively, how will these changes help or hurt the intergovernmental grants system and policy?
- What will be the political implications if the proposed changes are adopted largely as is?
- How will discretionary grant competitions be enhanced or harmed by the proposed changes?
- Is the proposed elimination of” fixed price” awards a good idea and will this hurt smaller organizations competing for discretionary federal funding?
- Is the federal focus of the elimination of fraud, waste and abuse in discretionary grant programs a legitimate concern, an ideological ploy or an exaggeration compared to reality?
- Do some of the proposed changes even belong in an overall federal grant policy that has been mostly stable over the past 50 years?
- Are not many of the proposed changes merely an outgrowth of President Trump’s recent Executive Orders to bend the consideration and award of discretionary federal funding towards his explicit political policy agenda?
When one is commenting on regulatory proposals for change, the questions are important when vital recipient interests are at stake as is the case here. So, let’s think about some cogent answers to these questions as springboards for helping the nonprofit community address what many see as alarming in these proposed changes.
There is little doubt that the cumulative impact of the proposed changes will harm federal grant policy in three broad fundamental ways. If implemented as envisioned by OMB and the awarding agencies, federal grant management policy will lose its essentially non-partisan character and become more explicitly a partisan tool, whether left or right.
Second, the relative stable nature of federal grant policy acknowledged and shared by all participants over the past 50 years will become less certain and stable based on a long-term give and take understanding between awarding agencies, competitors for funding and recipients.
Finally, if these changes are made final, it will be the last metamorphosis of what we once knew as grants to that of “grant contracts”, a trend that had been growing since at least 2004. The nomenclature is the same, but we are all “grant contract” recipients now.
Heretofore, grant award decisions have been made largely on objective merit. Yes, there is politics in grant funding but objective merit has usually prevailed in award decisions. Executive Orders 14332, 14151 and the proposed changes will wipe away the concept of objective merit where political appointees decide who will get what. The Trump Administration concept of merit as articulated in the long preamble to the proposed changes has no room for merit as we once knew it to be in funding consideration. Panel reviews are merely advisory and can be safely discarded if desired. Remember, discretionary grant awards are not covered by the federal Administrative Procedure Act.
Even if you win a grant award, the proposed changes will make it incredibly easy for awarding agencies to take away or terminate your funding through broadly worded language about termination for convenience or just no longer needed. Medium and large organizations cannot be blind to this potential loss of funding risk.
The elimination of the “fixed price awards” is not good for small community nonprofit organizations. One of the merits of fixed price awards is that small organizations could tackle local area issues and problems while still demonstrating how doing so advances national policy objectives. If implemented, I predict that many community organizations will find themselves having to become sub-recipients to larger recipient organizations whose own interests may conflict with the goals and needs of the smaller organization.
Regardless of where one stands on the anti-WOKE and DEI proposed language, their insertion does not belong in a document that is supposed to articulate nationwide grant management policy. If this is your policy preference, put it in the grant solicitations where it belongs or perhaps in program regulations.
By any objective measure, 2025 and 2026 have not been good for the grant community. We are experiencing legal and regulatory upheaval on a scale not seen until now. Controversy and ongoing litigation are still being played out in a climate of great uncertainty. Courts have weighed in using temporary restraining orders (TRO’s) to curtail the worse abuses and the need for equitable relief as the merits of litigation are slowly addressed.
Let me invite you to steal my ideas and use them in your responses in the little time that is left. Go to www.regulations.gov and find docket OMB-2026-0034 to submit comments.
Henry Flood is the CEO of the newly created Grant Policy Network, LLC. He is a former Senior Advisor
to The Grantsmanship Center and a lifetime member of the National Grant Management Association.
© Copyright 2026, Henry Flood
