The Latest Move in Trump’s War on Nonprofits

New Executive Order requires political agreement for grants

Image description: American flag flying in front of a smoky orange sky, taken during the Fairview Fire in Southern California. Photo by Don Starkey on Unsplash

On August 7, Trump issued an executive order titled “Improving Oversight of Federal Grantmaking.” Overall, it does the opposite. The new rules politicize and destabilize federal funding, turning it into a perpetually uncertain source of funding for service providers, in contrast with past relative stability and reliability of federal funds.

All grants will now be awarded on a partisan, political basis. All awards must “demonstrably advance the President’s policy priorities” and the EO forbids awards that do not align with the Trump administration’s retrograde views on race, gender, immigration, or other issues to be named later.

Grant recipients will be at risk of suddenly losing funding at any point during their contract period. Grants are renamed “discretionary awards” and must “permit termination for convenience.” In other words, grants are subject to immediate cancellation without recourse if the project or their institution is deemed to be out of alignment with the administration’s goals.

The new rules will slow down the grant announcement and selection process dramatically, and reduce the importance of expert review. Agency heads or senior appointees are required to have hands-on involvement in approving funding opportunity announcements (their new words for Notice of Funding Opportunity, or NOFO) “to ensure that they are consistent with agency priorities and the national interest.” For grant selection, decisionmakers must be senior appointees and “shall not ministerially ratify or routinely defer to the recommendations of others [such as qualified peer review panels] in reviewing funding opportunity announcements or discretionary awards, but shall instead use their independent judgment.” All grants must be reviewed by a senior appointee annually. Until these new processes are in place, grant awards are on hold.

The EO contains other potentially suspect rules that are likely to be weaponized against elite universities and other institutions targeted by the Trump administration.

· It outlines new oversight requirements related to spending grant funds.

· Grants are to be awarded to “a broad range of recipients rather than to a select group of repeat players.”

· Preference is to be given to institutions with low overhead rates, and agencies are instructed to “prioritize an institution’s commitment to rigorous, reproducible scholarship over its historical reputation or perceived prestige.”

· There is a lot of talk about “Gold Standard Science” and rigorous, reproducible results. This builds on an earlier EO about Gold Standard Science which watchdog groups have characterized as anti-science and establishing an impossible standard of perfection.

There are some potentially positive common-sense reforms proposed in the EO. It calls for reducing complexity in the application process and use of plain language. It discusses inter-agency collaboration to reduce duplication. But most of the content is alarming.

Overall, the nonprofit sector has depended on government grants for 30% of its revenue. Certain types of social service providers such as community action agencies and healthcare providers, have a much higher reliance on federal funding. We continue to be in an existential crisis as a sector but are not talking very much about the current war on nonprofits. This is yet another blow. I’ll be watching for opportunities to take action and will keep you posted.