Summary of the Executive Order

On August 7, 2025, the White House issued the Executive Order Improving Oversight of Federal Grantmaking to increase accountability, transparency, and alignment of federal discretionary grants with stated national priorities. This directive reshapes how agencies develop, review, and manage Funding Opportunity Announcements (FOAs), and it adds new oversight layers that will affect both timing and requirements for applicants.

The order requires a more centralized review process, led by senior appointees within each grantmaking agency and supported by content experts. These reviewers will assess both the policy alignment and technical rigor of proposed projects. FOAs must be more accessible through plain-language requirements, and award criteria will favor institutions with lower indirect costs and strong, measurable outcomes. The Office of Management and Budget (OMB) will also update the Uniform Guidance to streamline applications, introduce more stringent financial controls, and mandate “termination for convenience” clauses in discretionary grants.

• Enhanced Review Process – Each agency must appoint a senior political appointee to review FOAs and discretionary grants for alignment with agency priorities and national interest. New FOAs cannot be released until this process is in place
• Inclusion of Content Experts – Peer or subject-matter experts must be involved in reviewing discretionary grant proposals for technical rigor, reproducibility, and measurable outcomes
• Award Criteria – Grants must demonstrably advance presidential policy priorities, avoid prohibited uses, and prioritize institutions with lower indirect cost rates
• Application Clarity – Funding opportunity announcements must be written in plain language to reduce technical barriers
• Scientific Standards – Grants must include clear benchmarks for success and follow “Gold Standard Science” practices as defined in Executive Order Restoring Gold Standard Science.  
• Uniform Guidance Revisions – OMB will streamline applications and require “termination for convenience” clauses in all discretionary grants
• Financial Controls – Agencies may require specific drawdown requests instead of automatic disbursements

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Helpful Changes for Organizations and Their Grant Professionals

While the order adds oversight steps, it also creates opportunities for organizations that can adapt quickly. By emphasizing accessibility, fairness in award distribution, and cost efficiency, these changes could open the door for more competitive participation by smaller or emerging entities.

The plain-language requirement will reduce the need for specialized legal or technical interpretation, enabling more organizations to respond effectively to FOAs. Prioritizing lower indirect cost rates means organizations that operate leanly may gain an advantage over more established institutions with higher overhead. The broader award distribution mandate encourages diversification of recipients, potentially increasing first-time awardee representation. The involvement of senior appointees and content experts also makes the review process more transparent, giving applicants clearer targets for both policy alignment and technical quality.

In short, while the order presents challenges, the following provisions may offer benefits for grant professionals and the organizations they serve:

• Simpler Applications – FOAs must be written in plain language
• Lower Indirect Cost Advantage – Organizations with lower overhead rates may be more competitive
• Broader Award Distribution – Awards will be spread across a wider pool of recipients
• Clear Benchmarks – Defined success metrics and a focus on Gold Standard Science will help applicants create focused proposals
• Greater Interagency Alignment - Agencies will coordinate to avoid duplicative funding announcements and streamline efforts, ensuring consistent goals and reducing redundancy across programs.

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Potential Challenges for Organizations and Their Grant Professionals

The new requirements will also introduce timing and compliance challenges for grant professionals and their clients. The most immediate impact will be slower or paused FOA releases until agencies implement the required review systems. During this transition, agencies may issue new FOAs on a case-by-case basis with prior approval from the designated senior appointee or as required by law. Still, the overall pace of releases is likely to remain significantly reduced until the new processes are fully operational. This could lead to funding gaps and compressed timelines once FOAs resume. However, it’s important to note that the executive order applies to discretionary grants only and explicitly exempts block, formula, and disaster recovery grants. 

Subject to a limited number of statutory exceptions, all discretionary grants must now include the clause that an award may be “terminated by the agency if an award no longer effectuates the program goals or agency priorities.” Certain discretionary foreign assistance awards must also allow termination based on “the national interest.” Within 30 days of the Executive Order published August 7, 2025, agencies must, where permitted by law, revise existing awards to add or clarify this authority, making the requirement both forward-looking for future awards and retroactive for active awards. This creates potential termination risk even for well-performing projects. 

Further, proposals will need to “demonstrably advance the President’s policy priorities.” Discretionary grant awards shall not be used to fund, promote, encourage, subsidize, or facilitate: (1) racial preferences or other forms of racial discrimination, including activities where race or intentional proxies for race are used as a selection criterion for employment or program participation; (2) denial of the “sex binary” in humans or the notion that sex is a chosen or mutable characteristic; (3) illegal immigration; or (4) any other initiatives the EO describes as compromising public safety or promoting “anti-American values.” When combined with review by senior political appointees, these provisions could increase the influence of political leadership over funding decisions that have historically been managed by career program staff. 

Stricter drawdown and expenditure tracking requirements will require organizations to have strong financial controls in place and are likely to extend the time needed for compliance at each drawdown. The integration of content experts into the review process will raise the technical bar, requiring evidence of feasibility, reproducibility, and measurable outcomes.

Here is an at-a-glance list of potential challenges grant professionals will face in light of the order:

• Delayed Funding Opportunities – FOA releases for discretionary grants may be paused or slowed until review systems are implemented, creating potential funding gaps and compressed timelines.
• Termination Risk – Awards, including some active grants, may be terminated midstream if they no longer align with evolving program goals, agency priorities, or national interest
• Increased Alignment Requirements – Projects must demonstrably advance administration and agency priorities, with senior political appointee review adding a new layer of political influence
• Stricter Financial Oversight – Tighter drawdown and expenditure tracking requirements will require strong financial controls and may extend compliance timelines for each drawdown
• Higher Technical Bar – Subject-matter experts in the review process will assess methodology, feasibility, reproducibility, and measurable outcomes, raising the evidentiary standard for proposals.

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Actionable Items for Grant Professionals

Grant professionals can respond to these changes by strengthening proposal strategy, enhancing operational readiness, and engaging with decision-makers in a targeted way. Staying informed about agency timelines will be critical to ensure readiness when FOAs resume under the new process.

Proposals should make direct, explicit connections between the project’s objectives and both agency and administration priorities, backed by cost-effectiveness data and rigorous methodology. Building flexibility into budgets and timelines can help manage the risk of mid-project terminations. Financial systems should be reviewed and upgraded if necessary to meet stricter drawdown controls.

Engagement with senior appointees, when possible and appropriate, can help grant professionals understand evolving priorities and review criteria. Preparing proposals to withstand peer review from subject-matter experts means paying careful attention to scientific rigor, reproducibility, and clear, measurable success metrics.

Here are some strategies to keep in mind in light of the order:

1. Monitor FOA Releases Closely – Track agency timelines for completing the new review process
2. Strengthen Priority Alignment – Clearly connect proposals to administration and agency goals
3. Highlight Cost Efficiency – Emphasize lower indirect costs or justify higher rates with value evidence
4. Build Flexibility into Projects – Ensure plans and budgets can pivot if priorities shift
5. Prepare Strong Metrics – Define measurable, reproducible outcomes to satisfy both policy and technical reviewers
6. Enhance Financial Controls – Implement systems to handle drawdown requests and reporting requirements
7. Engage with Senior Appointees – Build awareness with agency reviewers who influence FOA release and award decisions
8. Anticipate Technical Review – Ensure proposals are ready for subject-matter expert scrutiny on rigor and feasibility

Disclaimer: This article is provided for informational purposes only and does not constitute legal, tax, or financial advice. Readers should consult qualified legal or tax professionals regarding their specific circumstances before taking any action based on the information provided.

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