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Over the last week, significant shifts in federal funding policies have reshaped how funding will be awarded and distributed. Federal agencies are now working to interpret and implement new guidance.
With a drastically changing grant landscape, nonprofits need to understand immediate next steps and how to prepare for what’s ahead. Below, we’ll break down the latest updates, answer your most pressing questions, and share how Instrumentl can help you navigate these changes.
Our experts consulted on federal funding changes
For this event, we were joined by two federal grant and compliance experts:
Rachel Werner, MPA, GPC, PMP
Rachel is the owner and CEO of RBW Strategy, a grants consulting firm located in the DC Metro area. She is also a Principal at MyFedTrainer, offering compliance training to individuals and nonprofits about the complexities of federal grant awards. Rachel and her team have raised over $240 million and managed over $2.5 billion in federal grant awards.
Patrice Davis, MS, CGMS
Patrice Davis is the founder of Grants Works and Grants Works Academy. She has successfully managed primary and sub-awards from over 20 local, state, and federal agencies and subagencies. She also served as the fiscal consultant during site monitoring visits of state agency recipients of federal grants.
What nonprofits need to know
Below are your most pressing questions, answered by Rachel and Patrice.
The freeze is over—but the delays aren’t
Yes, the freeze on federal funding has been officially lifted. Even though agencies are resuming work, we’re seeing processing delays. Different agencies are handling the transition differently. Some have reinstated grants immediately, while others are requiring additional documentation.
The Department of Health and Human Services, for example, has stated that while new grants are moving forward, some previous disbursements are still under review. If your grant was affected, check your agency’s portal for updates on deadlines and disbursements.
We’re also seeing agencies prioritize funding that aligns with new administrative priorities. If your project falls under those categories - such as workforce development, infrastructure, or social equity programs - you may experience fewer delays.
For nonprofits still awaiting clarity, our recommendation is to check agency portals frequently, sign up for relevant email updates, and maintain open lines of communication with program officers.
What immediate steps should current federal funding grantees and applicants take?
First, review all compliance documents immediately. This includes your reporting deadlines, budget justifications, and any amendments from your grant officer. Some agencies have updated indirect cost rates, and you need to be aware of those changes.
Second, reach out to your federal grant contact directly to confirm whether any new conditions apply to your specific funding. For example, some agencies are now requiring a budget modification approval before disbursement.
Third, document all communications. If anything changes, you want a record to ensure you stay compliant. One nonprofit I spoke with had to resubmit a budget justification due to a minor technicality - having documentation saved them from further delays.
“If you haven’t reviewed your compliance requirements in the last 30 days, now is the time. Agencies are implementing new oversight measures that could impact your funding.”
Are different federal agencies interpreting and implementing the new OMB guidance differently?
Yes, and this is important.
For example, The Department of Education has already issued specific guidance on revised timelines, whereas the Department of Housing and Urban Development is still working through their implementation.
Some agencies are being more flexible, while others are requiring updated budgets before processing funds. If your funding falls under an agency that has not yet finalized implementation, plan for additional delays.
Check with each agency individually to determine their response.
Which sectors are likely to be impacted in the long term?
We’re seeing the biggest impact on education, healthcare, DEI, and infrastructure grants. Programs tied to social services are getting priority funding, while some discretionary grants, particularly in environmental conservation, are under review for possible reductions.
The key here is understanding where your funding fits within the new priorities. If your work aligns with workforce development or equity-focused programs, for example, you may actually see more funding opportunities. Reference the White House website to learn more about new priority areas.
If your sector’s at risk, here’s your next move
First, assess your reliance on federal funding. If more than 50% of your revenue comes from federal grants, you need a contingency plan. Diversify your funding streams by exploring private and state-level grants.
Second, review indirect cost allocations—several agencies are scrutinizing these more closely now. If your organization’s cost recovery model depends on those rates, be prepared to justify them with additional documentation.
Third, increase your grant readiness by ensuring compliance structures are in place before the next grant cycle. One step we strongly recommend is conducting an internal audit of your grant management processes now.
"If you're waiting for everything to be finalized before making adjustments, you're already behind. Things are moving fast, and proactive organizations will have an edge."
What’s next? key federal funding deadlines to watch
February 10 is the date to look out for; that’s when we’ll know more about the specific programs being prioritized–and deprioritizzed–by federal agencies.
Expect additional administrative requirements. Agencies are implementing more stringent reporting deadlines, and in some cases, requiring monthly rather than quarterly financial reports.
There’s also a shift toward performance-based metrics, meaning you’ll need to demonstrate measurable outcomes more clearly. This means tracking your program impact in a more structured way and being able to report on those metrics with hard data.
At Instrumentl, your mission remains our priority. We’re committed to keeping you informed and equipping you with the resources you need to navigate these changes effectively. Here’s how we’re supporting:
Real-time grant updates—so you don’t miss a dollar
We’re actively monitoring federal funding changes and updating our database according to alerts received from grants.gov and grantmaking agencies directly. Changes in deadlines, eligibility requirements, terms, and priorities are reflected within each grant opportunity. If no changes have been made, that means we have not received communications from the grantmaking agency.
Free Federal Grant Workshops
To help you refine your federal funding approach amidst the changes, we’re hosting a free, two-part workshop with expert Rachel Werner, MPA, GPC, PMP. Register below.
- ✅ February 27 – How to Find Good-Fit Opportunities
- ✅ March 4 – How to Manage Post-Award Responsibilities
Meet with a Grant Strategist & Access 22,000+ Active Grants
If you’re exploring diversifying your funding options, Instrumentl offers access to over 22,000 grants, including 19,000+ non-federal opportunities. When you sign up, you’ll have the opportunity to meet with one of our grant specialists, who can help you get matched with relevant funding opportunities and refine your grantseeking strategies.
We’re continuing to monitor the situation and will report back with further updates. Stay tuned!
