The federal funding landscape is shifting—dramatically. On February 26, 2025, the U.S. Office of Management and Budget (OMB) and the U.S. Office of Personnel Management (OPM) issued a memorandum outlining large-scale workforce reductions, budget cuts, and program eliminations as part of the President’s “Department of Government Efficiency” Workforce Optimization Initiative.
For organizations that rely on federal grants, contracts, or evaluation funding, these changes could have significant impacts. The key question: Will your funding source be affected?
What’s Changing?
1. Federal Agencies Are Cutting Staff and Programs
Agencies have been directed to:
- Eliminate non-statutory programs
- Reduce their workforce through layoffs (RIFs)
- Cut budgets and consolidate offices
- Limit external consultant and contractor use
With fewer staff and resources, we anticipate slower grant administration, potential funding delays, and a shift in agency priorities.
2. Budget Cuts Could Impact Grant Opportunities
As agencies seek to reduce non-essential spending, we expect:
- The elimination or consolidation of certain discretionary grant programs
- Stricter eligibility criteria for remaining funds
- Delays in funding disbursement due to staffing reductions
Federal agencies are being asked to focus only on statutorily required services—which means some funding programs could disappear entirely.
3. Regulatory and Compliance Changes May Follow
Agencies are re-examining their statutory authority, which could lead to:
- New compliance and reporting requirements
- Changes to how program evaluations are conducted
- The elimination of certain funding streams
With these shifts, organizations need to be proactive in understanding what these changes mean for their funding strategy.
What’s Next?
It’s critical to stay informed and prepare now for potential shifts in funding. In our next post, we’ll discuss how your organization can pivot and stay ahead of these changes.
📢 Stay tuned for part two, where we’ll break down actionable strategies to secure your funding in this evolving landscape.
Ready To Take the Next Step?
We assist our clients in locating, applying for, and evaluating the outcomes of non-dilutive grant funding. We believe non-dilutive funding is a crucial tool for mitigating investment risks, and we are dedicated to guiding our clients through the entire process—from identifying the most suitable opportunities to submitting and managing grant applications.