President Trump’s recent grants system reform directive—Executive Order 14332, “Improving Oversight of Federal Grantmaking” (August 7, 2025)—has alarmed many involved in partnerships with federal programs. They call it a further grab for presidential power, a further politicization of the process by which federal funding is awarded to private organizations, including faith-based organizations, to carry out services and research for the public good. Many of the proposed changes, though, are positive, including reforms to enable smaller organizations new to federal funding to participate. However, new uncertainty will accompany grant awards, requiring organizations interested in federal partnerships to be very careful in budgeting and in program operations. Note well: the proposed changes apply only to federal discretionary grants—grants awarded by a federal agency in a competitive process—and not to federal funding that goes to state and local government agencies to be awarded by them as grants or contracts.
Why change the system? The grants executive order names several kinds of grants that have especially caught the administration’s attention as wasteful and even harmful, such as funding that promotes critical race theory or gender ideology or supports services to immigrants here illegally. But it also names research results that turn out not to be replicable by other researchers, duplicate awards that occur because of inadequate coordination between federal agencies, and the problem of overly complex grant processes that give the edge to legacy organizations able to hire grantwriting and other expertise to outshine proposals that might actually be more worthy.
Reforming the system for greater accountability. Changes to the system are designed to assert control by the heads of agencies as representatives of the elected head of the executive branch, the president. Those agency leaders are each to name a senior political appointee to create a new funding process that will be closely accountable to the agency leadership. In the reformed system, a senior leader will review planned new funding opportunities and the announcements of such opportunities and, before grants are issued, the funding recommendations of proposal review panels. Agency heads are to monitor discretionary grants annually, checking to ensure that the grants are operating as they should and that the grants awards process is staying on track.
Standards for the grantmaking process. The executive order stresses that grant funding—taxpayer money—ought to fulfill the aims specified by program laws and regulations, the agency’s priorities, the national interest, the requirements of national security, and the administration’s priorities. Expanded interagency coordination should eliminate wasteful duplication. Where appropriate, subject matter experts must be consulted. Research ought to conform to what the administration terms “Gold Standard Science”: the results can be replicated, biases are eliminated, and non-scientific ideologies are sidelined. Institutions charging less overhead should be favored, all else equal. Where possible, grants should be spread across qualified applicants, not continually awarded to the same small set of institutions. Winning proposals should specify benchmarks to measure and ensure success.
Eliminate barriers. The executive order emphasizes the elimination of unnecessary requirements and the use of plain language in announcements and other documents. Such changes should make it easier for qualified but smaller and less-experienced applicants to compete against well-endowed legacy organizations. Further, the Office of Management and Budget is charged with revising the Uniform Guidance that applies to federal grantmaking in order to “streamline application requirements.”
Pause in discretionary grants. No new discretionary grants are supposed to be announced until the system has been reformed, except with the approval of the agency’s politically appointed leadership.
Termination for convenience. As a key element in the drive to ensure that grant funding achieves the government’s aims, the executive order stresses the use of “termination for convenience” clauses in grant program requirements and grant agreements. These authorize the granting agency to end a grant early not only if the grantee is violating requirements but also if the agency determines that the agency’s priorities, the program’s goals, or the national interest are no longer being achieved by the grant’s continuation. The Uniform Guidance that governs federal grants already includes a termination provision; the executive order emphasizes that a change in the national interest is an additional valid ground for stopping a grant and it requires that grant documents include a clear termination for convenience clause. It also obligates agencies to retroactively add the clause to existing grants, if possible.
Permission required for grant drawdowns. Future discretionary grants are to include a requirement that a grantee only be able to draw funds from the approved amount upon making a specific request that includes a supporting justification.
Politicization or needed additional accountability? The changes specified by the executive order insert political appointees into the grantmaking process at the beginning, middle, and end, diminishing the freedom of action of civil service staff and outside experts. The changes elevate in decision-making the preferences and values of the current administration over the preferences and consensus of academia and practicing professionals.
Further, in numerous ways, the grants executive order seeks to break automaticity: just because an organization was awarded a grant in the past should not mean it will win another one; agency leadership should be attentive to the views of grant awards committees and subject matter experts but not simply accept their assessments; while the award of a grant starts the process of planning and carrying out the promised activities, a grantee will not receive any of the funds simply because time has passed; a grantee may be achieving all of the promised goals and yet, if agency priorities or national needs change, a grant may be stopped prematurely.
Are these changes just raw politicization, additional instances of President Trump insisting on more freedom, fewer guardrails, even more executive power? For certain, Congress, the courts, outside experts, and grantees and prospective grantees will need to monitor the actual implementation of the specified changes. And, yet, political appointees are not mere partisan hacks; rather, they are representatives, in their own way, of the nation that the government is meant to serve—they are part of the team that the voters chose. To be sure, executive branch officials, including political appointees are accountable not only to a president, to the electoral outcome; they are accountable, too, to the Constitution, court decisions, statutes, professional norms, and, ultimately, to the Lord of the universe. In administrative practice, though, the buck needs to stop somewhere, and that somewhere, that someone, should be subject to electoral control.
Strengthening political accountability and reducing automaticity can be important positive reforms. How these changes are put into practice will be key.
Time to step away from partnerships? While the changes may be positive for taxpayers, accountability, and the purposes for which grants are made, the same reforms will make partnering with the federal government more challenging for many prospective grantees. Some important changes do reduce barriers to participation. But the stress on termination for convenience clauses and a future requirement for specific permission before being able to draw down grant funds should prompt careful consideration before an organization applies for a discretionary grant. Even if a grant is being carried out in a timely way and achieving all of the goals it may be terminated because of a change in agency priorities and a scheduled funds drawdown may be delayed because of agency needs. Organizations with good—mission-promoting—reasons to seek discretionary federal funding need to consider carefully what they will do if a grant is prematurely ended or the expected pace of funds is slowed.
Stanley Carlson-Thies is a Senior Fellow and the Founder of the Institutional Religious Freedom Alliance (IRFA), a program of the Center for Public Justice.
