It’s been a tough year for the nonprofit sector. Grants canceled mid-performance. Reimbursements frozen for months. Programs that had operated for a decade, gone in a single memo. If you’ve spent 2026 white-knuckling your budget projections and rewriting your contingency plans, you are not alone.
That’s why Spark Point signed the National Council of Nonprofits’ letter opposing the Office of Management and Budget’s proposed overhaul of the Uniform Guidance (the rulebook that governs how federal grants actually work).
What’s Actually in This Proposal
Buried in dense regulatory language is a set of changes that would hand any administration sweeping, largely unchecked power over who gets federal funding and who doesn’t.
Here’s the short version: agencies could pre-screen and reject grant proposals simply for not aligning with “administration priorities,” with no obligation to tell the applicant why. Grants could be suspended, terminated, or have their terms rewritten mid-performance, without cause and without an appeals process. A grantee’s affiliations or advocacy could be used against them. Dangerously, funding could be pulled if a program is deemed to “damage the reputation” of the federal government (a phrase so vague it could mean almost anything, to almost anyone in power).
Simply put, what’s being proposed isn’t a tweak to paperwork, it’s a radical structural shift toward funding by ideology instead of merit.
A Year of Instability
We want to be clear about something: this proposal isn’t happening in a vacuum. It’s happening after a year in which nonprofits have already watched federal funding become unpredictable in ways most of us have never seen in our careers. Grants already awarded, already budgeted around, already staffed for are pulled anyway. Reimbursement pipelines that used to take weeks stretching into months.
Codifying that chaos into permanent rule would mean today’s crisis becomes tomorrow’s normal operating procedure. Every future administration, regardless of party, would have the tools to defund the programs it disfavors on a whim, with no due process for the organizations caught in the middle.
The Ripple Effect Nobody’s Talking About Enough
Here’s what makes this bigger than a “federal grants” issue: when federal funding gets shakier, foundations and corporate funders don’t have infinite capacity to absorb the overflow. They’re already being asked to fill gaps left by earlier cuts. Add a permanent structural risk to federal funding, and you’re not just destabilizing the organizations that rely directly on federal dollars, you’re adding pressure to the entire philanthropic ecosystem that the rest of us depend on, too. Even if you don’t depend on federal grants, this will affect your organization.
Let’s not dance around the ugly truth. The communities that will be most harmed by the proposed changes are the ones already absorbing the brunt of a hard year, including low-income communities, communities of color, and LGBTQ communities, among others who’ve been squarely in the crosshairs of this administration’s policy agenda. Programs that address long-standing disparities are explicitly named as targets in this proposal. That’s not a side effect. That’s the point.
The Equity Issue
And here’s the part that should give everyone pause, regardless of politics: the programs on the chopping block aren’t fringe pet projects. They fund housing. Food security. Healthcare access. Disaster recovery. These are programs that have enjoyed bipartisan support for decades because, at the end of the day, most Americans agree that people should be able to access decent housing, food, and healthcare. Turning that into a partisan football makes our safety net less stable, for everyone.
What We’re Doing — And What You Can Do Too
We signed the National Council of Nonprofits’ letter because staying quiet isn’t neutral right now. If your organization shares these concerns, the coalition is accepting signatures through July 13. It takes a few minutes, and it puts your organization on the record alongside hundreds of others saying the same thing: this is not the direction federal grantmaking should go.
You can also submit a public comment on the proposed rule directly, using the National Council of Nonprofits’ comment guide, and share a message with your members of Congress. Every voice in the docket matters — literally; public comments become part of the official record OMB has to consider.