WASHINGTON, D.C. (September 1, 2026) – Today, Independent Sector applauded the passage of H.R. 6500, a continuing resolution (CR) funding the federal government through December 11, 2026. The bill, which passed the House by a vote of 370-48 and the Senate by a vote of 90-6, includes language delaying the finalization and implementation of the Office of Management and Budget’s (OMB) proposed rule, OMB 2026-0034 – Proposed Regulation to Federal Financial Assistance, until at least December 11, 2026.
“As a voice for the 14 million Americans helping their neighbors in the employ of nonprofits, we have heard growing concern about the potential impacts of OMB’s proposed rule change on the abilities of organizations to meet the needs of their communities. The creation of such a vague standard as is included in this proposed guidance, administered by an unaccountable bureaucratic body, would open the door for political and ideological preferences to corrupt what should be a strictly nonpartisan process,” said Dr. Akilah Watkins, CEO and president of Independent Sector. “Since this change was announced in May, Independent Sector has built support from organizations and lawmakers from every part of the ideological spectrum, with nearly half a million public comments submitted to OMB sharing concerns about the potential for political or ideological bias to infect this new process. Congress has listened, and we will continue to work with lawmakers on both sides of the aisle to ensure any changes to the federal grantmaking system are fair, effective, and free of political bias. Thank you to our elected leaders for taking action to prevent catastrophic funding disruptions to the organizations helping millions of Americans feed their families, get quality healthcare, and serve their communities.”
Since its release on May 29, 2026, Independent Sector has strongly opposed OMB’s proposed rule and advocated for Congress and the Administration to prevent its implementation. Independent Sector has mobilized members and advocates to submit public comments to OMB through the Independent Sector Action Center; published a blog post, Why Nonprofits Should Be Concerned About OMB’s Proposed Grantmaking Changes; discussed the proposed changes on the Money To Give podcast; sent a letter to OMB opposing the rule; sent a letter to congressional appropriators opposing the rule; submitted a comment to OMB opposing restrictions on voter registration and issue advocacy; and engaged in ongoing conversations with lawmakers to raise concerns and urge them to permanently block the rule from taking effect.
Previously scheduled to be effective on October 1, the delay included in H.R. 6500 gives nonprofits and other federal grant recipients valuable additional time to work with policymakers to address concerns with the proposed rule and protect the integrity of the federal grantmaking system.
Background Information on OMB’s Proposed Changes to the Uniform Guidance
OMB’s proposed rule would make significant changes to the Uniform Guidance governing federal financial assistance. Among other provisions, the proposed rule would:
- Expand the executive branch’s power over federal grantmaking. The rule would allow federal agencies to selectively administer grant programs in ways that align with the Administration in power’s priorities, such as adding additional programmatic requirements for grantees to advance the President’s agenda. This change would dilute Congress’ constitutional power of the purse, expand the executive branch’s financial authority, and erode the public’s trust in the executive branch to administer grant funds in the manner Congress intended.
- Subject grant decisions to political review. This change would give political appointees expanded authority to unilaterally approve or reject discretionary grants based on whether they believe applicants will advance the President’s priorities and the “national interest”—vague standards that could enable partisan or arbitrary decisions regardless of merit.
- Expand agencies’ authority to modify or terminate grants. The proposed changes would give federal agencies expanded power to modify grant conditions during an award and terminate ongoing grants based on potentially arbitrary or partisan reasons, creating significant uncertainty for federal grant recipients.
- Restrict nonpartisan civic engagement and issue advocacy. The rule would restrict the use of federal grant dollars for nonpartisan voter engagement and issue advocacy. While this restriction would only apply to federal funds, this rule could intimidate nonprofits who engage communities for these purposes from doing so, even though they could still use non-federal dollars for nonpartisan civic engagement efforts.
- Restrict federal funding for certain DEI activities. The rule would prohibit grant dollars from being used for “unlawful” Diversity, Equity, and Inclusion efforts, creating uncertainty for nonprofits about which activities and programs could be supported with federal funds.
###
Independent Sector is the national membership organization that connects, strengthens, and advocates for nonprofits and philanthropies. Learn more at independentsector.org.
Media Contact: Chloe Kessock, chloek@independentsector.org, 727-433-2972
