For over a century, Neighborhood House has operated numerous programs and services that help people live heathier lives, exit poverty, and prosper. Our work depends on federal grant funding, and a new federal proposal could change the rules governing that funding in ways that matter directly to our program and the families we serve.
On May 29, 2026, the federal Office of Management and Budget (OMB) proposed sweeping changes to the “Uniform Guidance,” the rulebook governing how organizations like ours receive and manage federal grant dollars. The public has until July 13, 2026, to weigh in before the rule can be finalized.
Neighborhood House is a multi-service Community Action Agency, dedicated to the eradication of poverty. We do this by providing direct services through several federally funded programs administered by SAMHSA, HHS, Department of Labor, Department of Transportation, HUD, and USDA. These federal agencies fund our Head Start and Early Head Start, Medicaid Case Management, Housing and Rental Assistance, Employment, Youth Drug Prevention Programs and much more.
Neighborhood House will be directly impacted by the Proposed Rule. Here’s what it could mean for our programs
Political sign-off on grants. A new “pre-issuance review” step would have senior political appointees sign off on discretionary grants before they move forward, based on alignment with administration priorities, not just program quality. Federal agencies could determine discretionary federal awards based on partisan ideology, not community needs or congressional intent.
Easier to pull funding mid-stream. Federal agencies would get more discretion to terminate grants they decide no longer serve “agency priorities or the national interest,” not just grants where an organization broke a rule. Agencies could also weigh vaguer “risk factors,” like an organization’s public reputation or affiliations, when deciding whether to fund or continue funding a program.
New restrictions tied to DEI and gender identity. The rule would prohibit federal funds from supporting “disparate impact” discrimination theories intended to address longstanding racial, social, or other disparities or serve underserved communities. Many nonprofits hold core values around advancing DEI, welcoming immigrants and supporting LBGTQ people. The proposed changes target nonprofits with these viewpoints, forcing them to decide between core values and their ability to serve communities through federal programs.
What happens next?
OMB must consider public comments before finalizing the rule. If adopted, it’s intended to take effect October 1, 2026, applying to the next federal fiscal year, which would include our FY27 Head Start funding.
How to make your voice heard
Submit a public comment at regulations.gov. Search for docket number OMB-2026-0034. Comments are due by July 13, 2026.
Not sure what to say? The National Council of Nonprofits’ comment guide includes a plain-language summary and sample comment templates you can personalize. Agencies weigh personalized comments more heavily than ones that closely mirror a template, so if you’re a parent, staff member, or community partner connected to our Head Start program, sharing your own experience carries real weight.
Every comment becomes part of the public record federal agencies are required to read and respond to before finalizing this rule. For a program like ours, built on decades of trust with the families we serve, that record matters.
(This summary is based on a CAPLAW legal analysis of OMB’s initial proposal and the National Council on Nonprofits comment guide.)