NCHE warns OMB grant rule overhaul could threaten nonprofit services

The National Collaborative for Health Equity is urging nonprofits and the public to oppose proposed White House budget office changes to federal grant rules before a July 13 comment deadline. NCHE says the overhaul could increase political control over awards, weaken due process, and disrupt services that millions of people rely on.

Why it matters: - NCHE says the proposed rule changes could make federal grant funding less predictable for nonprofits that deliver housing, health, food, education, shelter, and disaster recovery services. - The group warns that financial instability could push qualified grantees away from federal awards, shrinking the social safety net at a time when demand for services is rising. - The proposal could affect nonprofits that receive a major share of their revenue from federal grants, contracts, or cooperative agreements.

What happened: - The National Collaborative for Health Equity and Executive Director Dr. Gail C. Christopher on June 25 asked stakeholders, nonprofits, and the public to review and oppose proposed changes to the White House Office of Management and Budget’s Uniform Guidance. - NCHE is urging public comments against the overhaul before the July 13, 2026 deadline. - The proposed overhaul was published on May 29, 2026. - The Uniform Guidance governs federal grants, cooperative agreements, and other monetary awards.

The details: - The guidance controls how federal agencies distribute billions of dollars in financial assistance to state, local, and tribal governments, along with nonprofit organizations. - NCHE says the changes would move grantmaking away from objective, merit-based review and toward executive discretion and political influence. - The proposal would let federal agencies terminate or suspend discretionary grants without cause and change grant terms during performance. - The proposal would allow grants to be terminated if subrecipients are found to “damage the reputation” of the federal government, an undefined standard that NCHE says could chill advocacy and dissent. - The proposal would create a pre-approval process that lets political appointees exclude proposals that are not consistent with “federal agency priorities and the national interest.” - The proposal would allow the executive branch to withhold discretionary grants indefinitely if they do not actively “advance the president’s policy priorities.” - The proposal would bar federal funding from promoting diversity, equity, and inclusion efforts or immigration-related services. - NCHE says the restrictions could force nonprofits to choose between their missions and federal funding. - The proposal would provide no required administrative hearing or formal appeals process for suspended or terminated grants. - NCHE says the lack of due process leaves nonprofits with little ability to challenge funding cuts. - Dr. Christopher said the rule would require federal funding to nonprofits to align directly with administration policy objectives and make it easier to suspend or cancel grants. - Dr. Christopher also said NCHE views the proposal as an intrusion into nonprofit work.

Between the lines: - The dispute is about more than grant administration. It is about whether federal dollars should follow neutral review standards or be tied more directly to political priorities. - NCHE argues the proposal could give the executive branch broad leverage over groups that often monitor government performance and advocate for marginalized communities. - The organization says people of color and historically marginalized populations would face the greatest harm because the changes could deepen racial and health disparities. - The lack of an appeals process would make the new rules especially risky for multi-year nonprofit programs that rely on stable funding.

What's next: - NCHE is urging nonprofit leaders, advocates, and members of the public to submit official comments before the July 13, 2026 deadline. - The group is encouraging organizations to coordinate responses and use comment guides to explain how the changes would affect their work. - Dr. Christopher said federal agencies must review and consider the public comments they receive. - NCHE says a strong public response could help protect the integrity of federal grantmaking and the services nonprofits provide.

The bottom line: - NCHE is treating the OMB proposal as a direct threat to nonprofit independence, federal grant stability, and the communities that depend on federally supported services.