Take a walk back a few years. The U.S. Congress passed in 1993 the Government Performance and Results Act (GPRA) that requires federal agencies to adopt multi-year strategic plans that include the outcomes they expect to accomplish. In 2010, Congress passed the GPRA Modernization Act aimed at creating a fact-based, decision-making framework for program implementation, reinforcing the focus on achieving results. Federal grant application guidelines often define the GPRA outcomes related to the grant program, and agencies often expect to see those outcomes included in the grant proposals they receive.
Fast forward to 2020. The federal march toward grant-related accountability continues. This past January, the Office of Management and Budget (OMB) proposed changes to the Uniform Guidance (2CFR 200) that relate specifically to grantmaking. The changes amp up the GPRA approach by placing an increased focus on results. The public comment period for the revisions ended in late March.
Everyone wants government agencies to be effective, and while the proposed revisions to the Uniform Guidance are meant to enhance that, the changes have raised some concerns for grantseekers. “The revisions address a number of issues, such as the publication of indirect cost rates, procurement requirements, standardization of terminology and data elements, etc.” said Barbara Floersch of The Grantsmanship Center in Los Angeles, Calif. “But the three areas I hear the most about are performance requirements, merit reviews, and grant termination rules.”
Increased Focus on Performance: The changes dictate that federal agencies fund only programs with clear goals and objectives that can produce the results the agencies want to accomplish. The updated guidance will require agencies to provide grant applicants with clear performance goals, indicators, and milestones before applications are solicited. “Some nonprofit managers are concerned that the new rules will limit innovation and move the grants process into the arena of contracts,” said Floersch.
Merit Reviews: Federal agencies will extend the merit review practice to all awards in which the federal awarding agency has the discretion to choose the recipient. The purpose of the expanded reviews is to select grantees that are most likely to deliver the results the agency wants to achieve. “OMB’s Uniform Guidance which became effective in 2014 included a requirement that agencies conduct a risk assessment of applicant organizations before making grant awards, and this change takes the vetting process even further,” said Floersch. “A nonprofit’s administrative capacity, financial management, professionalism, and effectiveness will be closely scrutinized–it will kill or seal the deal.”
Increased Ability to Terminate Federal Awards: Following receipt of a federal award, if evidence shows the grantee is not meeting the expected objectives, or if those objectives are not achieving the desired goal, the federal government will have increased flexibility to terminate the award. “Because the changed guidance eliminates the termination ‘for cause’ provision, there is concern that an award can now be terminated even when the recipient is successfully implementing the funded scope of work and is in compliance with all terms and conditions,” said Floersch. “It’s more important than ever to have confidence that your organization can deliver the results you propose in the grant application.”
Floersch urges all manager at nonprofits that receive federal grants (or hope to) to review OMB’s full text related to these changes. “To compete effectively for federal grants and take your program all the way to a successful conclusion, you’ve got to understand the rules of the road,” said Floersch. Full text of the changes is provided on the Federal Register website (federalregister.gov) under the title “Guidance for Grants and Agreements.”
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