Federal funds distribution now subject to political oversight following Trump's executive decree
In a move that could have significant implications for various federal grants, U.S. President Donald Trump signed an executive order on August 7, 2025, titled "Improving Oversight Of Federal Grantmaking." The order aims to tighten federal grant approvals, ensuring alignment with the Administration’s policy priorities and national interest.
Key details of the executive order include:
- Senior Appointee Oversight: Each federal agency must designate a senior political appointee responsible for reviewing and approving all new funding opportunity announcements and discretionary grants to confirm they align with agency priorities and national interests. No new grants can be announced without this approval.
- Grant Termination Provisions: Agencies are required to review standard grant terms and incorporate provisions that allow termination "for convenience" if grants no longer support the Administration’s goals. This applies both to new grants and potentially to existing awards.
- Controlled Fund Drawdowns: The order requires grant agreements to prohibit recipients from drawing project funds without explicit agency approval and to provide written justifications for each funding drawdown request.
- Reporting Requirements: Within 30 days, agency heads must report on the status of discretionary awards, including the percentage of those that can be terminated for convenience, and whether foreign assistance grants include termination for national interest.
Regarding impacts:
While the EO does not explicitly mention protests or specific social issues, its emphasis on aligning grants with Administration policies suggests potential cutoffs for grants supporting organizations involved in pro-Palestinian activism, transgender programs, or other initiatives that conflict with the administration’s priorities. The EO specifically cites a 2024 study reporting that over 25% of National Science Foundation grants went to diversity, equity, and inclusion (DEI) efforts, which the EO seeks to curb.
By requiring strict alignment with “agency priorities and the national interest,” grants for climate initiatives and DEI programs risk reduction or termination if the Administration does not prioritize these areas. The EO frames DEI grants as “offensive waste of tax dollars,” signalling a clear intent to reduce funding for such programs.
The order's broad termination authority and requirement for increased oversight create legal and operational risks for recipients of federal funding. Organizations involved in targeted areas (e.g., climate, social justice, transgender rights) may face immediate funding threats through termination or non-renewal of grants, with agencies empowered to enforce political priorities through funding decisions.
However, the order does not provide information on how it will ensure that federal grants are being used to "demonstrably advance the President's policy priorities" beyond the specific initiatives mentioned in the order. Additionally, the order does not provide details on how it plans to enforce the restrictions on grant funding.
Rights advocates have expressed concerns that Trump's federal funding threats could harm free speech and academic freedom, and amount to political interference. The order also specifies that subject matter experts will be involved in decisions on awarding grants.
It remains unclear how the order will impact the funding of assistance for immigrants who are in the U.S. illegally, pro-Palestinian protests, climate initiatives, and diversity, equity, and inclusion (DEI) programs, as these were not explicitly mentioned in the order. The order does not specify which specific "anti-American values" are being referred to.
In summary, Trump's executive order centralizes grant approval authority in political appointees, enforces strict conditions for funding drawdowns, and opens the door to terminating grants for a wide range of discretionary programs, including those supporting climate action, DEI, and social issues such as transgender rights and pro-Palestinian advocacy, framing such funding as inconsistent with the Administration’s priorities and the national interest.
- The executive order signed by U.S. President Donald Trump, titled "Improving Oversight Of Federal Grantmaking," could potentially affect science-related grants, given that the order aims to curb diversity, equity, and inclusion (DEI) efforts, including those funded by the National Science Foundation.
- In the realm of policy-and-legislation, this executive order could lead to the termination of general-news grants supporting organizations involved in pro-Palestinian activism or transgender programs due to the order's emphasis on aligning grants with Administration policies.
