You may have seen the headlines about a federal grants overhaul. On May 29, the Office of Management and Budget (OMB) proposed a major rewrite of the rulebook behind federal grants, the Uniform Guidance, or 2 CFR Part 200. It sets the standard for how federal grants are administered, which costs are allowable, and how audits work. The proposal would rewrite that standard and rename it the Uniform Grants Regulation. At this point (June 2026), nothing has passed and nothing is final. Yet.
The shift from “guidance” to “regulation” gives the changes staying power. While an executive order can be reversed by the next administration with a signature, a regulation can’t. Undoing a regulation means moving through the same long rulemaking process.
The proposal moves work categorized as “communication” and “dissemination” toward the category of “indirect costs.” Activities like sharing results or attending a conference to discuss your impact could be treated as not directly tied to the funded work. For mission-driven organizations, telling the community (and funders) what the work accomplished is key to the purpose of doing it.
This proposal would also make sub-awards harder to use. Many federal dollars are dispersed via sub-recipients, or partnering organizations that may not qualify for federal funds on their own. The proposal suggests increasing the responsibility a lead organization will carry for its sub-recipients, which will likely decrease use of the smaller, community-rooted partners most connected to the needs of those they serve.
The proposal does lean into submitting a short statement of interest (or letter of intent/LOI) versus a full application, which may increase accessibility to apply, however, LOIs are likely to be filtered out early with less feedback and more room for elimination based on political priorities.
You don’t have to be an expert in policy to submit your concerns about this proposal.
The public comment period is open until July 13.
Visit regulations.gov, search docket OMB-2026-0034, and describe how this would affect your work and the causes you serve.
If you write grants and have a living Master Grant Application, you likely already have this information at your fingertips. Any case for support you have written should explain barriers both your nonprofit and those it serves face in achieving your charitable mission. If you don’t, or simply don’t know where to start, ask the people you serve about their concerns regarding the far reaching repercussions of these changes.
If they do happen, it is unlikely the rules will ever go back to how they were. The organizations that navigate this well will be the ones with a skilled grant strategist who reads the rule, understands the changes, and helps nonprofits respond calmly and factually.
At PSI, “the award is won together.” Part of that effort is using our voice to create positive change. We encourage you to use yours by July 13.