By Jacqueline M. Tiso, Founder & CEO, JMT Consulting

An overview of federal executive orders, why they matter to nonprofits, and a review of the potential impact of the August 7, 2025, executive order, Improving Oversight of Federal Grantmaking (EO 14332), on your organization.

We seem to be hearing a lot more about presidential executive orders these days, but they have been around since our country’s founding. In fact, George Washington issued eight orders during his term, though the following five presidents after him only issued an average of two per term.

So, what are they and why, as a nonprofit executive, should I care?

The answer: They are legally binding instructions to the federal agencies on how to operate. While they can be overturned by Congressional action, it’s important to note that Congress didn’t approve them. What’s more, the court and future US presidents – and even the one who issued the orders – can overturn them as well.  The number of executive orders tend to increase during crises periods, such as the Great Depression and times of war, as well as during times of political polarization and congressional gridlock, which is probably why we are seeing many recent presidents issuing them.

President Trump, particularly during his second term, is no exception. In fact, he’s issued 217 Executive Orders as of this writing, which is not even a year old.

One of them, entitled Improving Oversight of Federal Grantmaking, should particularly get the attention of CEOs, CFOs, and others working in nonprofits. That is because this order, which President Trump signed on August 7, 2025, was ostensibly designed “to strengthen oversight and coordination of, and to streamline, agency grantmaking.”  

While these goals are expected and potentially positive, the details may paint a different picture for many organizations.

That’s because the order claimed that government funding has not traditionally advanced the interests of the American people and questioned whether enough federal grants have even achieved the goals outlined in their applications and compliance reports, pointing out that “a significant proportion of the results of federally funded scientific research projects cannot be reproduced by external researchers.”

The order also claimed that many worthy proposals didn’t receive funding because of the complexities involved in completing a grant application, which often requires a nonprofit to hire expensive legal and technical experts to address the questions.

As a result of this order, each federal agency needs to appoint a senior-level professional to review the announcements of funding opportunities as well as the discretionary grants to ensure that the application instructions are clear and minimize the need for organizations to retain legal and technical experts to complete an application. The objective: To simplify the process and lower the costs, so smaller and/or less established organizations can get funding for worthy requests. Meanwhile, the order states that preference should be given to the organizations with lower administrative overhead.

It recognizes that applications still need to provide enough information for an administrator to confidently evaluate them. And it still permits a peer review of the application. But it’s no longer decisive – peer reviewers can only provide recommendations, nor is it the decision of career bureaucrats. Rather, the executive order requires a stricter, top-down approval process, where the political appointees have the ultimate power to green-light the federal grants.

What’s more, it limits the areas where grants can be given, essentially prohibiting funding to organizations that address the LGBTQ+ community, provide immigration supports, promote civil liberties, social justice, DEI, and/or racial equity initiatives, and/or “compromise public safety or promote anti-American values.”

Finally, this directive makes it easier for the agency to terminate a grant if the government’s “priorities” change.  This introduction of politics into the grant-making process can make it harder for organizations to plan for the long term, because funding can be lost mid-stream for multi-year projects. There may also be abrupt disruptions, which can affect your ability to pay staff and provide continual services.

In sum, this executive order significantly changes who could receive federal funding, how secure that funding would remain over time, and administrative compliance requirements and costs. And it interjects more politics into the selection and retention process.

How should you respond? If you receive any federal funding, you will need to assess your program’s alignment with new priorities and strengthen your reporting abilities. We also recommend scenario planning, where you identify possibilities for future developments and then create a plan for each situation.  You should also investigate ways to create greater efficiencies that lower your overhead. And you should also implement stricter financial controls, so you can produce the documentation to better measure performance metrics to demonstrate results, justify drawdowns, and protect against any penalties or claw-backs because of paperwork errors. Finally, you should explore diversifying your funding sources to reduce your overall risk.

We can help. JMT’s Client Accounting Advising Services can guide you through the process of “stress testing” your programs to ensure the health of your organization, implementing automation and AI accounting tools to reduce the chance for human error, shorten the time for reporting and compliance, and address other financially-related pain points for CEOs and CFOs.

On the other hand, because of the executive order, new and smaller nonprofits aligned with current government priorities might have a better chance of gaining funding, enabling their establishment and growth. If you fall into this group, now might be the time to apply for and secure a federal grant. However, keep in mind, the administrative burden may also increase as an outcome of this executive order, so those nonprofits without large financial teams for the compliance reporting or an established compliance process could struggle. We at JMT Consulting can help here too. We’re experienced with implementing effective compliance processes as well as setting up flexible financial solutions that can reduce errors, overhead costs, and more.

For more details, check out our Nonprofit Financial Management Solutions page or contact a client account manager today.