The Streamlining Federal Grants Act and the Benefits to Charitable Nonprofits

Shared with permission from our partners at the National Council of Nonprofits.

Last week, Senators Gary Peters (D-MI), John Cornyn (R-TX), and James Lankford (R-OK) introduced the Streamlining Federal Grants Act of 2023 (S. 2286). The bill seeks to improve the effectiveness and performance of federal grants and cooperative agreements, simplify the application and reporting requirements, and facilitate greater coordination among agencies responsible for delivering services to the public. Notably, the legislation also seeks to improve the services delivered to communities and organizations that historically have not received federal grants or cooperative agreements.

The legislation would accomplish these priorities by establishing a Grants Council composed of all grant-making federal agencies tasked with providing overall guidance to the different agencies for developing plans for reforming their complex and outdated procedures and practices. The guidance would provide instructions on streamlining and simplifying the application, administrative, and reporting procedures for grants, improving user experiences, and soliciting grantee input, among other things. Over a period of about two years, each agency would be required to develop and implement an Agency Plan of streamlined grant-making procedures that comply with the Grants Council guidance.

“The federal government relies heavily on charitable nonprofits to perform services in every community across the United States. Yet the federal grants process is needlessly complex, exclusionary, and a reason the current nonprofit workforce shortage crisis is so severe. The networks of the National Council of Nonprofits strongly support the Streamlining Federal Grants Act as a needed step in de-complexifying federal grant making and providing clarity and fairness that will benefit all Americans.” - Tim Delaney, President & CEO of the National Council of Nonprofits

Impact on Charitable Nonprofits

Numerous provisions embedded in the Streamlining Federal Grants Act create opportunities for charitable organizations to work with their partners in government to overcome longstanding hurdles to access and performance under federal grants.

• Overcoming inertia and bureaucratic obstructions.

After more than a decade of confusion and miscommunication since the Office of Management and Budget issued its Uniform Guidance (2 CFR Sec. 200 et seq.), the legislation would create a reform process through which longstanding challenges and impediments can be addressed and overcome. This is particularly welcome news to nonprofits struggling to advance solutions and largely ignored by agencies that had no motivation to engage in the reform process.

• Mandated consultation with non-Federal entities, including charitable nonprofits.

The legislation expressly mandates that federal agencies consult with non-Federal entities – states, local governments, territories, Tribes, higher education, and nonprofits – during the development and implementation of their Agency Plans. Federal agencies would be required to pay particular attention to potential entities that have not historically received grants or cooperative agreements. This will promote dialogue early in the process when new ideas and approaches can be welcome, rather than comment at the back end. 

•  Clarification and simplification of Notices of Funding Opportunities.

The legislation expressly requires that agencies must “improve user experience” by mandating summaries of notices of funding opportunities that are short (under 500 words), clear (plain language), and accessible (identifying training and assistance opportunities). Nonprofits and others would no longer have to sift through 70 pages of jargon to determine whether they are or are not eligible to apply.

• Elevation of training and assistance for potential applications of grants.

A primary tenet of the legislation is to improve the delivery of services to the public, particularly services to communities and organizations that historically have not received federal grants or cooperative agreements. One way this is accomplished is by requiring agencies to include in their Agency Plans the steps necessary to ensure potential grant and cooperative agreement program applicants have opportunities to receive training and assistance from the agency.