Office of Management and Budget's 2026 Proposed Rule Comment Guide

Background

The Guidance for Federal Financial Assistance, also known as the Uniform Guidance, governs most federal grantmaking (grants, cooperative agreements, direct appropriations, etc.) to community foundations; other public charities; state, local, and Tribal governments; and other entities. Federal agencies and departments can adopt the Uniform Guidance with or without amendments to comply with their own legal requirements. The Uniform Guidance also defines terms, cost allocation methods, and procedures for federal agencies, grantees, applicants, and others. It was last updated on October 1, 2024, and the Council submitted a comment in support of some of the changes while providing suggestions for future improvements. 

OMB's Proposed Changes to the Uniform Guidance

On May 29, the Office of Management and Budget (OMB) released a proposed rule to revise the Uniform Guidance following an Executive Order that called for revisions to federal grantmaking. The proposed rule would convert the Uniform Guidance into a Uniform Grants Regulation (UGR) that would apply to all federal grantmaking agencies. All provisions in the proposed UGR would be codified government-wide so that future changes only happen via OMB rulemaking. This comment period is important because all Fiscal Year 2027 (FY 2027) federal financial assistance and beyond would be impacted by the final rule.

Why Submitting a Comment Matters

OMB must review all comments submitted, which could influence the final version of the proposed UGR, or prompt OMB to respond to comments if they address specific provisions. Because the proposed rule is in response to an Executive Order and designed to align with the changes it calls for, there is no guarantee that OMB will revise or remove any of the provisions. Still, it is important to share concerns with the proposals and make suggestions for improvements given the magnitude of the proposed revisions to federal financial assistance.

OMB aims for the final rule to take effect October 1, 2026, to align with the start of FY 2027; a final version could be published late summer or early fall, making your input essential to this rulemaking process. This guide explains the proposals and context to consider when writing your own comment. Submit your comment before Monday, July 13.

Template Comment Guide

You are welcome to edit the text of the template comment, add sections responding to other provisions, rearrange the ones in the template comment, or remove those that are not aligned with your priorities. Before submitting your comment, make sure the order of the sections in the list of contents reflects the order in which they are detailed. Throughout the template you will see highlighted text to insert content such as your organization’s name. We suggest you do not change the heading or title since they are taken directly from the request for comments.

Introduction and Section Outline

This is an opportunity to introduce your community foundation to OMB. For this comment, you can elaborate on the federal financial assistance programs most relevant to your community, the partnerships made possible by that federal funding, and how it translates to economic impact such as employment and other outcomes.

Clarification of Regulatory Structure

As mentioned in the proposed change overview, this proposed rule would change the Uniform Guidance into Uniform Grants Regulation (UGR) so all the proposed changes would apply to federal grantmaking agencies and departments. In addition, the proposed UGR would only be changed by future rulemaking. Typically, federal agencies and departments adopt some or all elements of the Uniform Guidance and issue their own rulemaking process for significant revisions to specific programs.

• What to Consider: Standardizing the federal grantmaking process could be a challenge for federal agencies and departments, especially if the public input process is limited and they cannot access expertise on specific issues as easily. If your organization has submitted comments on a federal proposed rule, you can share why it was helpful to do it, and why limiting public input is harmful to the federal award selection process.

Changes to Eligibility and Merit Review

§ 200.202 (d) – Program planning and design on restricting eligibility for federal funding among different types of nonprofit organizations: This would clarify that federal agencies may, to the extent permitted by law, restrict eligibility among different types of nonprofits. For instance, a program could limit eligibility to a 501(c)(3) organization while excluding a 501(c)(4) organization.

• What to Consider: While this provision focuses on eligibility for specific nonprofits, it could be improved to clarify that it would not affect community foundations that act as pass-through entities, and that subrecipients’ eligibility is not tied to their exemption designation.

§ 200.205 (a) and (b) – Federal agency merit review of proposals: OMB would strengthen agency merit review requirements and establish a new pre-issuance review process. Federal agencies could not issue an award notice until a senior political appointee approves it. This is intended to ensure that discretionary awards advance the administration’s policy priorities.

• What to Consider: Some programs, especially research-based ones, benefit from peer review because they are guided by nonpartisan experts familiar with the context applicants work within. If someone unfamiliar with a grant’s background can override recommendations from subject-matter experts, it could set back community goals around indicators such as social determinants of health. OMB needs to know the programs that should rely on peer review and real-life consequences of deviating from this process.

§ 200.206 — Federal agency review of risk posed by applicants: This would expand the factors federal agencies may consider when evaluating applicant risk. It would include financial capacity, prior performance, publicly available information about “questionable practices,” organizational affiliations with entities engaged in activities that violate federal law or undermine public safety or national security, and compliance with foreign gift and contract disclosure requirements under Section 117 of the Higher Education Act of 1965.

• What to Consider: Many of the terms used, such as “questionable practices” and “affiliations,” are not defined in the draft regulations or in law, but they could be removed or improved. Charitable grants, memberships, or other instances of a relationship with an organization could be misinterpreted as an “affiliation” and exclude a federal grant applicant from consideration, or subrecipient if applying for pass-through funding. OMB should know the relationships and potential partnerships that could be at risk if the rule goes into effect as written. If there are definitions that would be less harmful, include them as recommendations.

Changes to Award and Subaward Structure and Pass-Through Entity Oversight

§ 200.201 (b) – Use of grants, cooperative agreements, and contracts: This would remove references to fixed amount awards and eliminate the policy allowing recipients to issue fixed amount subawards, except where expressly authorized by federal statute.

• What to Consider: Surveys and other findings show that nonprofits are concerned about the resources they dedicate to program delivery and administrative costs. If there is data on this topic applicable to your community, include it to show that cost-reimbursement models would impose operational burdens on federal grantees.

§ 200.332 (h) – Requirements for pass-through entities: Pass-through entities would be required to ensure that subrecipients do not take actions that could significantly damage the reputation of the pass-through entity, the awarding federal agency, or the federal government.

• What to Consider: Like other provisions, this proposal includes undefined language, which could be removed or revised. The “reputational harm” proposal, as written, would create a tense dynamic between federal grant recipient and subrecipients, and legal costs, to ensure activities are not at risk for misinterpretation. If there are guardrails that would be helpful to your community foundation and partners, recommendations shared with OMB could minimize the chilling effects.

§ 200.332 (i) – Requirements for pass-through entities: Pass-through entities would be required to report subawards to SAM.gov. They would also have to make subrecipient and contractor determinations clarifying that internal organizational relationships do not exempt pass-through entities from this obligation.

• What to Consider: OMB should know the practical and financial context of documenting transfers of federal funds, or other grants, that applies to your community foundation. Not all community foundations, or other pass-through entities, have the capacity to meet this provision, which should be explained. This can provide OMB the information it needs to consider revising or removing this provision.

§ 200.202 (f) – Multi-Year awards: Would encourage federal agencies to design awards as multi-year awards, so long as these are consistent with program objectives and permitted by law.

• What to Consider: This is a proposal that has been supported by the Council on Foundations and other partners in the past. Elaborating on the federally funded programs that would benefit from a multi-year award approach could be helpful if the UGR goes into effect and applies to all federal grantmaking agencies. It may also be helpful to share how your foundation uses multi-year awards to advance long term goals.

Prohibition On the Use of Federal Awards to Promote or Support Unlawful Diversity, Equity, and Inclusion (DE), "Gender Ideology," or Disparate-impact Liability

§ 200.300 (b)(1) – Statutory and national policy requirements: OMB would prohibit the use of federal award funding to “fund, promote, encourage, subsidize, or facilitate” DEI/DEIA policies, principles, or practices that violate any applicable federal anti-discrimination laws.

• What to Consider: The language in this proposal could be revised to reflect existing federal law or judicial precedent. Organizations can elaborate on the recommendation to revise the provision by sharing examples of activities that are key to delivering effective services and consistent with existing federal law. It may be helpful to include federal programs and activities you know would be at risk if the broad category goes into effect.

§ 200.300 (b)(2) – Statutory and national policy requirements: OMB would prohibit the use of federal award funding to “fund, promote, encourage, subsidize, or facilitate” what OMB refers to as “gender ideology:” “theories or ideologies that deny the biological reality of sex or the sex binary in humans, or endorse or advocate for the notion that sex is a chosen or mutable characteristic.”

• What to Consider: Programs and activities that would fall under this proposal include scientific research and other arts and humanities programs. If the provision is retained, OMB should know the programs and activities that should be excluded and the consequences of limiting their eligibility for federal funding.

§ 200.218 – Prohibition of using Federal awards to promote or support theories of disparate-impact liability: This would establish a government-wide policy directing federal agencies and pass-through entities to ensure awards are administered in ways that do not promote or support theories of disparate-impact liability based on federally protected characteristics such as race, sex, or age.

• What to Consider: Programs that are designed to be neutral and nonpartisan could still be at risk if they seek to measure outcomes and impacts on different groups, something that is expected in program evaluation. Many federal grants are for research to evaluate the impacts on a policy on different groups and account for federally protected characteristics. If your community foundation has cited or referenced federal research to support your own work, you can elaborate on the challenges potentially losing access to this funding would have on your organization.

§ 200.111 English language: All federal announcements, applications, and award information would have to be provided in English and U.S. dollars.

• What to Consider: Many nonprofits mainly deliver programs and services in a language other than English and have multilingual staff. The 2024 Uniform Guidance revision expanded the possibility for such organizations to receive materials from federal agencies and apply for, manage, and report on federal grants. Without this option, some communities could be at risk of losing funding opportunities. If your community foundation benefits from preserving this option, share that with OMB.

Restrictions on Federally Funded Lobbying and Related Activities and Programming

§ 200.450 (iii), (iv) and (v) – Lobbying: This would expand the prohibition on the use of federal funds for lobbying activities to other civic engagement efforts. This includes nonpartisan voter registration activities; issue advocacy or public messaging that promotes or opposes a social, political, or public policy position unrelated to the award’s objectives or performance requirements; and efforts to influence state executive branch policymaking, rulemaking, or administrative actions unrelated to the federal award.

• What to Consider: The provision could lead to misinterpretations of existing limits on lobbying activities and federal funding, and nonprofits may decrease their nonpartisan civic engagement as a result. OMB should know that nonprofits are aware of the prohibition of using federal funds for lobbying activities and the challenges of tracking the proposed activities’ funding sources, which could also apply to staff hires given the vague language. Asking for clarity could help nonprofits plan their tracking in the future.

§ 200.202(a) and § 200.202(c) – Program planning and design: This would clarify that federal program costs and objectives must be consistent with the public purpose of the authorizing statute and aligned with administration priorities and policies. OMB also proposed that program funds may not be used to subsidize political activities or initiatives unrelated to authorized public purposes. The proposal also clarifies that federal agencies and pass-through entities may not discriminate for or against applicants on the basis of religious character, affiliation, exercise, or lack thereof.

• What to Consider: The new, broad, “political advocacy” prohibition could lead to various federally funded educational and engagement activities be misinterpreted as using federal funds to lobby. In addition, requiring programs to align with the administration’s priorities and policies undermines nonpartisan and expert-driven work.

§ 200.454 (a) and (d) – Memberships, subscriptions, and professional activity costs: OMB proposes narrowing allowable costs for memberships, subscriptions, and professional activities to only those necessary to fulfill award requirements, subject to prior federal agency approval, and to classify as unallowable any costs related to organizations whose primary purpose is lobbying or issue advocacy.

• What to Consider: Access to memberships could be at risk, leaving community foundations and other federal grantees without access to those benefits, including federal grant writing support and peer learning. Federal grantees would have to ensure membership costs are not tied to federal funding and still be at risk of a federal agency not approving it.

§ 200.461 – Publication and Printing Costs: This would prohibit the use of federal funds for publication costs, including journal article processing charges, open access fees, and peer-reviewed publication costs, unless expressly required by federal statute or approved by the agency on a case-by-case basis. It also specifies that a general requirement to make results publicly available would not be enough to authorize these costs.

• What to Consider: Federally funded research would be harder to access, leaving community foundations with fewer resources to reference and lean on when making decisions such as grantmaking and evaluating the impact of some policies on communities and people served. If there are reports from agencies or partners supported by federal funding, include them and the benefits to your work.

Nondiscrimination and Neutrality Requirements

§ 200.300 (c) – Statutory and national policy requirements: This would prohibit federal agencies and pass-through entities, including community foundations, from discriminating for or against applicants based on religious character, affiliation, or practice.

• What to Consider: This provision could be improved to support pass-through entities like community foundations who want to partner with various organizations such as faith-based ones. If you have partnered with one in the past, you can share some guidance with OMB to make the provision favorable to other community foundations and nonprofits who could be pass-through entities.

§ 200.219 — Prohibition of discriminatory event services: This would require non-public entities that accept federal financial assistance not to discriminate based on viewpoint; content; subject matter; or political, ideological, or religious affiliation when providing services for events, meetings, or other activities funded by the federal award.

• What to Consider: The Johnson Amendment already provides public charities guidance on permissible events, meetings, or other activities – they must be nonpartisan. If a recipient were to update its event and facility use policies to comply with this proposal, they could incur costs for legal counsel and would have to ensure all speakers and participants understand the Johnson Amendment prior to an event, meeting, or related activity if federal funding is used for those activities.

Strengthen Federal Authority to Suspend or Terminate Discretionary Awards

§ 200.340 (a)(1) and (2) – Termination and suspension: This would allow awards to be terminated or suspended for noncompliance. Termination or suspension could also happen if a federal agency or pass-through entity determines that the award is no longer advancing agency priorities or program goals. Recipients would see a new process related to termination costs, but appeal options would be limited to noncompliance only. Unless prohibited by statute, federal agencies would have more discretionary authority to terminate or suspend awards.

• What to Consider: This would leave federal grant recipients and subrecipients financially vulnerable depending on the length of the program and federal award amount. Recipients and subrecipients could need emergency support, especially for costs that cannot be recovered after termination or suspension. Contingency planning would become more important for federal grant applicants. OMB should know the amount of federal funding that could be at risk and how it would affect your community, along with processes that would make it easier for applicants to appeal termination and suspensions, the timeline that would make it easier for staff to prepare for the loss of funding, and why justifications need to be thorough.

E-Verify for U.S.-Based Award Labor

§ 200.303 (f) – Internal controls: Recipients and subrecipients of federal awards would be required to participate in the Department of Homeland Security’s E-Verify, a system that allows employers that enroll to verify their employees’ eligibility to work in the United States.

• What to Consider: If you have information on the costs to participate in E-Verify, please share them with OMB, as well as the thresholds or workforce size that would be reasonable to include in the final version to reflect the financial and administrative realities of small organizations. This could help modify the proposal to only apply to specific employees and contractors.