On August 7, 2025, President Trump signed Executive Order 14332, titled Improving Oversight of Federal Grantmaking, aimed at tightening control over discretionary federal grant programs.
Key changes
Political oversight: Agencies must appoint a senior political official to review all discretionary grant announcements and awards for alignment with policy priorities and “the national interest.”
Termination clauses: Grants must now include “termination for convenience” provisions, allowing agencies to end awards if priorities shift.
Revised grant rules: The Office of Management and Budget (OMB) will update Uniform Guidance language (2 C.F.R. Part 200) to reflect the new review process and financial controls.
Broader implications
While framed as improving accountability, the order shifts grantmaking from a traditional merit-based process toward one with heightened political oversight – raising concerns about delays, bias, and disruptions, particularly in research, health, and education. For more information, see this article from Venable LLP.
What nonprofits should do
- Review your portfolio. Identify which active or planned grants are discretionary and could be subject to political review or early termination.
- Strengthen grant documentation. Keep program impact data, compliance records, and alignment with stated federal priorities up-to-date.
- Diversify funding sources. Reduce reliance on discretionary federal grants by pursuing state, local, private, and earned-revenue streams.
- Engage in policy monitoring. Track OMB’s forthcoming updates to 2 C.F.R. Part 200 and agency-specific grant guidance.
- Join advocacy coalitions. Collaborate with sector associations to push for fair, transparent grantmaking processes.
- Prepare contingency plans. Develop operational scenarios for partial or full loss of key federal funding.
For a downloadable checklist with specific actions your nonprofit can take to prepare for the effects of EO 14332, click here.
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