New Federal Grant Rules Could Impact Goodwill

By Laura Walling, Vice President of Government Affairs, Goodwill Industries International, Inc.

Across the country, Goodwill^® organizations partner with the federal government to deliver workforce training, job placement, and essential services that help people build better lives. A proposed federal rule could significantly reshape how those partnerships work—and what’s possible for the communities we serve.

On May 29, 2026, the Office of Management and Budget (OMB) released a sweeping proposal to overhaul the federal government’s grantmaking rules—known as the “Uniform Guidance.” This framework governs how federal grants are awarded, managed, and monitored across agencies—and it applies to nonprofits, state and local governments, and other partners nationwide. The proposed changes affect every stage of federal funding—from application to reporting to potential termination.

While the proposal is complex, a few key themes are emerging:

1. Increased federal oversight and control
2. New authority to suspend or terminate funding
3. Expanded administrative and compliance requirements
4. New policy restrictions on how funds can be used

The proposed rule is not final. There is a 45-day public comment period, with feedback due by July 13, 2026. OMB will then review the comments and issue a final rule. Stay tuned for more information as further analysis of the proposal is conducted.

For decades, federal grants have enabled Goodwill organizations to deliver life-changing services at scale—helping millions of people find jobs, build skills, and achieve independence. Ultimately, federal grant policies should support and not hinder the work conducted by nonprofits.