Key Takeaways
The 2024 OMB guidance is the current baseline. It revised the federal financial-assistance framework, including 2 CFR Part 200, with the updated guidance generally taking effect on October 1, 2024.
The changes affected practical grant administration. OMB revised areas such as audit thresholds, equipment thresholds, funding opportunity notices, indirect costs, and other administrative requirements.
Federal grant oversight shifted in 2025. Executive Order 14332 directed agencies to introduce additional review of funding opportunities and discretionary awards.
OMB proposed further changes in 2026. Those provisions should be treated as proposals unless and until they are finalized.
For nonprofits, the key is to separate what is already binding from what may change next. The 2024 framework, 2025 executive direction, and 2026 proposal do not all have the same legal status.
Federal funding comes with a rulebook. For nonprofits receiving federal grants or other financial assistance, those rules shape how awards are made, managed, monitored, and audited.
In April 2024, the Office of Management and Budget (OMB) issued a major revision to its government-wide Guidance for Federal Financial Assistance. The changes covered 2 CFR Part 200, commonly known as the Uniform Guidance, as well as several other parts of Title 2 of the Code of Federal Regulations. The revised guidance generally took effect on October 1, 2024. (Federal Register, April 22, 2024)
The framework continued to evolve. In August 2025, President Donald Trump issued Executive Order 14332, directing agencies to add oversight to funding opportunities and discretionary grants. (White House)
In May 2026, OMB proposed another round of changes to the federal financial-assistance framework. Those changes are important, but they are still proposed, not final government-wide requirements. (Federal Register, May 29, 2026)
For nonprofits, the key question is: what is already in effect, what remains proposed, and what could change next?
How We Got Here
The 2024 revision was not a new system. It was the latest update to a federal grant framework that had been developing for more than a decade.
In 2013, OMB consolidated requirements that had previously been spread across several separate circulars into one government-wide framework for federal awards. That framework became known as the Uniform Guidance and was placed in 2 CFR Part 200. It covered non-federal entities including nonprofit organizations, state and local governments, tribal governments, and institutions of higher education. (Federal Register, 2013)
Federal agencies implemented the Uniform Guidance in 2014. OMB revisited the framework in 2020, updating requirements related to areas including performance, risk, statutory requirements, and provisions that had been interpreted inconsistently. (Federal Register, 2020)
By 2023, OMB was preparing another broader revision. Its proposal focused on reducing burden for agencies and recipients, clarifying requirements, updating parts of the framework, and rewriting sections in plainer language. (Federal Register, 2023)
That review led to the April 2024 final guidance, which forms the starting point for the changes discussed in this article. (Federal Register, April 22, 2024)
What Changed in 2024?
The 2024 revision was broad. OMB updated several parts of Title 2, including Part 200, with the stated goals of reducing administrative burden, clarifying inconsistent interpretations, improving accessibility, and updating federal financial-assistance requirements. (Federal Register, 2024)
For nonprofit recipients, four practical changes are especially worth noting.
| Area | Before the 2024 revision | 2024 revision |
|---|---|---|
| Single Audit threshold | $750,000 | $1 million |
| Equipment threshold | $5,000 | $10,000 |
| De minimis indirect cost rate | 10% | Up to 15% |
| NOFO template | Existing Appendix I template | Completely revised |
Source: OMB, Guidance for Federal Financial Assistance, April 22, 2024.
The Single Audit threshold increased
OMB raised the Single Audit threshold from $750,000 to $1 million in federal awards expended during a fiscal year. A non-federal entity that spends less than $1 million is generally exempt from the federal audit requirement for that year, although its records must still remain available for review or audit. (Federal Register, Section 200.501)
The equipment threshold doubled
OMB increased the threshold for determining items considered equipment from $5,000 to $10,000. Under Section 200.313 of the Uniform Guidance, equipment with a current fair-market value of $10,000 or less per unit may generally be retained, sold, or otherwise disposed of without further responsibility to the federal agency or pass-through entity. (Federal Register, Section 200.313)
The de minimis indirect cost rate increased
Recipients and subrecipients without a current federally negotiated indirect cost rate may elect a de minimis rate of up to 15% of modified total direct costs, up from 10%. OMB said the increase was intended to allow a more realistic recovery of indirect costs, particularly for organizations without the capacity to negotiate a formal rate. (Federal Register, Section 200.414)
Funding notices were redesigned
OMB completely revised the standard Notice of Funding Opportunity (NOFO) template in Appendix I of Part 200. Its stated aim was to reduce administrative burden and unnecessary obstacles for organizations applying for federal financial assistance. (Federal Register, 2024)
The 2025 Executive Order on Federal Grants
The next major change came on August 7, 2025, when President Donald Trump issued Executive Order 14332, “Improving Oversight of Federal Grantmaking.”
It did not itself replace the Uniform Guidance. Instead, it directed agencies to change how certain funding opportunities and discretionary grants are reviewed, while also instructing OMB to revise the Uniform Guidance further. (White House, Executive Order 14332)
What did the order change?
In practical terms, it called for more oversight at several points in the grant process:
- Senior-level review: Agencies must designate senior appointees to oversee reviews of new funding opportunities and discretionary awards.
- More scrutiny before awards are made: Reviews must consider applicable law, agency priorities and what the order calls the “national interest.”
- More control over grant funds: Where practicable and lawful, future discretionary grants should include tighter controls around fund drawdowns and require written support for individual requests. (White House, Executive Order 14332)
The order also told OMB to further revise the Uniform Guidance, including rules around application requirements, termination of certain discretionary grants, and facilities and administrative costs. (White House, Executive Order 14332)
This started moving into agency practice
By February 2026, the U.S. Department of Energy (DOE) had begun implementing EO 14332 by requiring new funding announcements to go through a formal internal review and approval process before public release. DOE’s guidance includes readiness checks and Deputy Secretary approval, and says separate guidance will address the review of discretionary awards. (Department of Energy, February 2026)
Important distinction: An executive order is not a new statute passed by Congress. EO 14332 itself says its implementation must remain consistent with applicable law. (White House, Executive Order 14332)
What OMB is Proposing in 2026
On May 29, 2026, OMB published a proposed rule that would revise several parts of Title 2, including 2 CFR Part 200. The proposal is still at the Proposed Rule Stage, so these changes are not yet final government-wide requirements. (Federal Register, May 29, 2026)
The proposal builds on priorities already seen in Executive Order 14332, but it would also change parts of the underlying regulatory framework.
The main changes to watch:
- More oversight across the award process: OMB proposes changes to funding opportunities, recipient selection, applicant risk review, payments, and subaward reporting. (Federal Register, 2026)
- Clearer termination and suspension rules: OMB proposes revisions to Section 200.340 to clarify when certain discretionary awards may be terminated or temporarily suspended. OMB also notes that some of this authority already exists under the 2024 framework. (Federal Register, Section 200.340)
- A new “Uniform Grants Regulation” framework: OMB proposes issuing the Uniform Grants Regulation as a government-wide OMB regulation, with Parts 1 and 200 revised to reflect that status if the rule is finalized. (Federal Register, 2026)
- One important exception: despite EO 14332 calling for changes to indirect-cost policy, OMB says this proposal does not revise the indirect cost rate negotiation system. (Federal Register, 2026)
What this means for nonprofits
For nonprofit recipients, the main point is that more review could happen before and during an award, and agencies may have clearer tools for suspending or terminating certain discretionary grants. But these are still proposed changes, so nonprofits should not treat them as current requirements yet.
How the Changes Affect Nonprofits
For nonprofits receiving federal funding, these changes affect more than one stage of the grant process. There is now more review around how grants are announced, awarded, monitored, and, in some cases, terminated.
A few areas deserve attention:
- Applications may face more internal scrutiny. EO 14332 requires additional review of funding opportunities and discretionary awards, including senior-level oversight and consideration of agency priorities. (White House, Executive Order 14332)
- Award terms may matter more than before. The executive order directs agencies to review termination provisions and, where permitted by law, incorporate stronger termination language into discretionary grants. (White House, Sections 5–6)
- Access to grant funds could face more controls. The order also directs agencies, where practicable and lawful, to require greater justification for individual fund drawdowns. (White House, Section 6(c))
- The 2024 rules still matter. Audit thresholds, indirect-cost rules, equipment requirements, and other Part 200 obligations remain the current baseline while the 2026 proposal is still pending.
For grant-funded nonprofits, the key is to read the specific funding notice, award terms, and agency guidance alongside Part 200, rather than relying on the general framework alone.
What Could Change Next
The next major question is whether OMB will finalize the 2026 proposed rule, and if so, whether the final text changes from what was proposed.
As of the current OMB regulatory agenda, “Regulation for Federal Financial Assistance” remains at the Proposed Rule Stage. (OMB Regulatory Agenda)
Nonprofits that receive federal funding should keep an eye on:
- a final OMB rule,
- agency-specific implementation of EO 14332,
- changes to Notices of Funding Opportunity,
- new grant terms around termination or payments,
- and any court decisions that affect how these policies are applied.
The federal grant framework is not being replaced overnight. But the rules around oversight, award review, and agency discretion are changing, and nonprofits will need to track which changes become final and which remain policy proposals.