Proposed Federal Funding Changes May Have Major Impact

Proposed Federal Funding Changes May Have Major Impact for Nonprofit Arts

On May 29, 2026, the Office of Management and Budget (OMB) released proposed changes to the Uniform Guidance for Federal Awards concerning all federal grants and other financial assistance. The proposed changes are extensive and, if finalized, will transform how federal-funded projects are solicited, managed, and reported.

Forty Federal agencies, including the National Endowment for the Arts, National Endowment for the Humanities, and Institute of Museum and Library Services, are named in the proposal to adopt new rules for Federal grants and cooperative agreements. Currently, Uniform Guidance governs agency activity, and each independent agency further adapts grantmaking policy through additional guidelines and grant terms and conditions.

Some of the provisions may be helpful to nonprofit arts organizations, such as encouraging federal agencies to make multi-year grants, while others may be burdensome and/or difficult for grantees. Applications that support the President’s policies would be favored, and funds would be barred from facilitating any racial preferences, assertion that gender is anything other than male or female as assigned at birth, support for illegal immigration, or the promotion of anti-American values. Much of the language used is vague and not clearly defined, which in conjunction with other provisions making it easier for funding to be canceled, could cause difficulties for arts nonprofits.

If the proposal is approved as planned after the public comments have been reviewed, the new Uniform Guidance would greatly expand official federal regulation and would go into effect with awards made or amended on or after Oct. 1, 2026, for most federal funding streams.

On July 13, 2026, the NC Center for Nonprofits submitted public comments to the U.S. Office of Management and Budget on this proposal to rewrite the rules for federal grantees, joined by nearly half a million individuals and organization, 190 times the average number of public comments for Trump Administration policies.

The National Council of Nonprofits has provided a detailed analysis of the proposed changes to Uniform Guidance, as well as an email campaign to contact your Congressional representative. However, Congress does not have any official role in the passage or implementation of the changes.

The Cultural Advocacy Group, a collaboration of arts and culture stakeholders working collectively to advance federal policy of which Arts NC is an active member, have created an analysis of the potential impact of these proposed changes specifically for 501c3 arts & culture nonprofits:

Share this:

• Share on Facebook (Opens in new window) Facebook
• Share on LinkedIn (Opens in new window) LinkedIn