A new Executive Order (EO) issued August 7th could significantly change how discretionary grants—including AmeriCorps grants—are awarded, managed, and even terminated. While agencies must still go through formal rulemaking before most changes take effect, the EO signals a shift toward greater political involvement in the grants process, new funding limitations, and increased administrative burdens.
Here’s what AmeriCorps grantees and subgrantees need to know now about the EO, “Improving Oversight of Federal Grantmaking“.
1. More political discretion in award decisions
Historically, AmeriCorps grants are awarded based on an objective, peer-reviewed process. The EO would allow political appointees or senior staff to override peer review rankings to ensure awards align with the Administration’s policy priorities or “national interest” (a term left undefined).
Why it matters: Even top-scoring applications could be passed over for reasons unrelated to program performance or community impact.
2. Power to cancel grants midstream
The EO calls for “termination for convenience” clauses in discretionary grants—language typically used in government contracts. Agencies could also deny continuation funding in later years if an active grant is deemed no longer aligned with agency priorities, even if the grantee is meeting all performance targets.
Why it matters: Priorities can shift mid-grant, especially after an election. This increases risk for multi-year AmeriCorps projects.
3. Caps on indirect costs
Agencies could favor applicants with lower indirect cost rates and/or impose new caps. This would most impact smaller or under-resourced programs that rely on indirect cost recovery to cover essential administration, compliance, and finance functions.
4. Possible delays in awards
The EO instructs agencies not to move forward with new applications until the new processes are in place. Because some of these changes require formal rulemaking, new competitions could be delayed—or skipped entirely.
5. New ideological litmus tests
Applicants could be screened for factors such as whether they:
- Use “proxies for race” in participant selection
- Recognize gender non-binary
- Promote “anti-American values” (undefined)
- Further “illegal immigration”
Why it matters: These vague terms create uncertainty and could be used to disqualify otherwise eligible programs.
6. More red tape to access funds
Under the EO, agencies could require written justifications for every single drawdown of funds, even after a budget is approved. This change would slow reimbursements—especially harmful for programs without the reserves to front costs while waiting for federal funds.
What America Learns is Watching
We and our partners are tracking these developments closely and are ready to help you adapt. That includes:
- Reviewing grant agreements for new termination clauses
- Updating subaward templates for commissions and primes
- Preparing “drawdown packets” so programs can respond quickly to new documentation requirements
- Modeling budgets under reduced indirect cost scenarios
- Helping programs document “substantial progress” for continuation awards
Bottom line
This EO could insert more politics into the AmeriCorps funding process, create new administrative burdens, and make funding less predictable—especially for smaller and under-resourced programs.
We’ll continue to monitor agency actions and share concrete steps to reduce risk, keep programs running, and protect the communities you serve.
Need to prepare now?
Our team can help you review your current agreements, adjust budgets, and strengthen your continuation and award-readiness strategies.
Contact us to set up a 20-minute call.