Proposed rule allowing federal appointees to cancel grants could cause chaos for nonprofits, Lawrence organization warns

photo by: Chris Conde/Journal-World

Freedom's Frontier National Heritage Area

A Lawrence-based organization supporting historical sites is urging the public to speak out against a proposed change in federal rules that could allow political appointees to cancel grants, something the group says is “fundamentally at odds” with how the system is supposed to work.

The Freedom’s Frontier National Heritage Area, which supports and promotes hundreds of historic sites across 41 counties in Kansas and Missouri has asked the public to provide comment against a proposed rule change by the Office of Management and Budget that could allow the executive branch more authority in changing or canceling federal grants, including if they decide the grant does not advance the “national interest.”

Johnny Szlauderbach, the director of communications and projects with Freedom’s Frontier, told the Journal-World the new rule that is causing concern is titled the “Regulation for Federal Financial Assistance.” The proposed rule change would allow heads of federal agencies to provide oversight of the “design and implementation of Federal programs.”

Szlauderbach noted that when Congress appropriates funding as the legislative branch — with its decisions becoming law — it is the federal government’s job to “execute” the law and therefore Congress’ decision in funding the grants. That’s why it is the “executive branch.” However, Szlauderbach said this rule change could make it the OMB or other parts of the executive branch can supersede funding decisions that come from Congress, meaning Federal appointees would be well within their rights to make “whatever decision they want.”

“In the past, the last thing you want is a political appointee to have final say over whether a grant is awarded or not,” Szlauderbach said. “That is fundamentally at odds in the way our current system is meant to function.”

The OMB states this proposal is meant to prevent “wasteful spending and misuse or mismanagement” of Federal funds, but Szlauderbach noted the vague language could be an attempt to cancel grants for programs that the Trump administration does not support — including funding for heritage areas.

Szlauderbach said last year the Trump administration and OMB had attempted to “zero out” funding for National Heritage Areas, but Congress intervened to ensure the 62 national heritage areas received their regular allotment of funding. Still, he said the OMB “slow-walked” the disbursement of funds for fiscal year 2025, causing uncertainty for the group.

Similar funding fights occurred in the Federal government, often led by the OMB. The department issued a memo on Jan. 27, 2025 that threatened to immediately pause “Federal financial assistance” to agency activities that were seen as against “Presidential priorities,” including “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

Although that move was blocked by a federal judge, Szlauderbach said if the proposed rule is passed, it makes it difficult to plan for the year and creates further chaos for nonprofits that rely on federal grants.

“(This rule would) really just extend and codify the actions that have made all of our lives complicated over the last 17 months,” Szlauderbach said.

Szlauderbach said his organization supports over 230 museums, historical societies, and heritage sites in its purview, ranging from the Watkins Museum of History to all-volunteer groups in rural Kansas. Two weeks ago, Freedom’s Frontier awarded $80,000 grants to its partner agencies for development projects.

Those projects are crucial for the communities they serve, Szlauderbach said, but the concerns can ripple further if the rule is taken to its furthest extreme. The proposed rule change, if it is approved, would take effect Oct.1, 2026. Conceivably, it could mean the OMB can stop federal grants by simply citing changing priorities.

“The rule is for so many reasons a concern for us and everybody in eastern Kansas and western Missouri,” Szlauderbach said.

Szlauderbach said he and Freedoms Frontier are urging people to provide public comment against the proposed rule. To submit a comment, you can go to the National Archives’ Federal Register website here.