We, the undersigned organizations, oppose the U.S. Office of Management and Budget’s (OMB) proposed 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.
If implemented, the OMB proposal would create significant financial risk and instability for federal grantees, making it more difficult to provide vital services to communities. 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.
The proposal allows federal agencies to determine discretionary federal awards based on partisan ideology, not community needs or congressional intent. OMB proposes to create a pre-approval process that allows political appointees to exclude grant proposals from consideration if the proposal is not consistent with “federal agency priorities and the national interest.” Grantees would not know whether and why their proposal was rejected through this
process, and they would be unable to challenge such actions. Moreover, the proposal directs agencies to consider a grantee’s membership or affiliation with other organizations that “undermine public safety or national security” and grantees’ engagement in “activities or initiatives that are inconsistent with federal civil rights laws.” These provisions could be abused to exclude grantees that work to advance racial equity or grantees that oppose an administration’s policies. Taken together, these provisions would essentially allow any administration to disqualify a grantee it disfavors.
The proposal would force grantees to operate in a shifting environment, increasing the difficulty of administering federal programs. The proposal directs agencies to align federal programs with “administration policies and priorities,” creating uncertainty as each new administration could make significant, substantive changes. OMB proposes to allow federal agencies to terminate or suspend discretionary grants without cause and to change grant terms and conditions mid-performance. Federal agencies would be authorized to impose onerous oversight and monitoring requirements across entire programs, regardless of the grantee’s individual performance. When a grant is terminated under the agency’s discretion, the agency would not have to provide grantees with any administrative hearing or appeals process. Federal agencies could withhold federal discretionary grants indefinitely, if the agency determines that the grant does not “advance the president’s policy priorities.” Moreover, under the proposal, agencies could terminate grants if subrecipients “damage the reputation” of the federal government, a term that is not defined.
The proposal threatens important congressionally funded federal programs that help address longstanding racial, social, or other disparities or serve underserved communities. The proposal purports to bar any federal funding from being used to promote “unlawful” diversity, equity, and inclusion (DEI) efforts or illegal immigration. 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. Grantees lawfully provide immigration legal services, humanitarian assistance to asylum seekers, or emergency shelter to migrants. Those most impacted are people of color and their communities, which have experienced historic and ongoing federal disinvestment.
We urge you to reverse course and stop these proposed changes.