If enacted, these changes would reach far beyond paperwork. Nonprofits, state and local governments, tribal entities, and others that depend on federal financial assistance—whether through grants, cooperative agreements, loans, or direct appropriations—could face new and serious challenges. The ripple effects could disrupt essential services that communities depend on every day, including housing, healthcare, education, food access, disaster recovery, and more.

At the heart of the proposal is a new set of required certifications. Organizations seeking or receiving federal funding would have to attest—under penalty of civil and criminal law—that they comply with a series of provisions tied to recent federal directives. These include interpretations of diversity, equity, and inclusion (DEI) policies, as well as language related to undocumented immigration and terrorism. While intended to align with executive branch guidance, these requirements raise significant concerns for the nonprofit sector.

One of the most pressing issues is uncertainty. The proposed rules are complex and, in many cases, unclear—leaving organizations unsure of what compliance actually looks like. This ambiguity creates real risk. Nonprofits could find themselves vulnerable to audits, investigations, or legal challenges, even when acting in good faith. Defending against such claims would demand substantial time, money, and staff capacity—resources that are already stretched thin.

Faced with unclear expectations and heightened legal exposure, some organizations may ultimately decide the risk is too great to continue pursuing federal funding. And when nonprofits step back, it’s not just the organizations that feel the impact—it’s the communities they serve.

In the end, these proposed changes could have unintended consequences, weakening the very support systems millions of people rely on. Because of this, ANAFP was a signer of a national letter led by the National Council of Nonprofits and Legal Defense Fund opposing the proposed changes.