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Looming Government Shutdown: What Happens to Federal Grants?

By Ryan Alcorn // September 28, 2023

The government is expected to shut down this weekend if Congress cannot reach an agreement.

While the prospect of a government shutdown conjures images of closed national parks, millions of furloughed employees, and halted essential services, there's another consequence worth exploring: the potential stalling of a significant influx of grant funds. Recent legislation had signaled a golden period for grant opportunities, but the shutdown may hit the pause button on this momentum, adding a layer of complexity for organizations keen to tap into these new resources.

Here's what grantseekers need to know to navigate these uncertain times:

Shutdown Basics

The U.S. Constitution grants Congress the responsibility to allocate government funding. Each fiscal year begins on October 1, and Congress must approve spending bills by the end of September to avoid a funding gap. If they don't, all nonessential government operations stop. With disagreements hindering the appropriations process this year, reaching a resolution before the Sunday deadline appears unlikely.

How We Got Here

Congress is tasked with passing 12 spending bills each year that fund federal agencies. If pressed for time, lawmakers have the option to pass a short-term funding extension known as a Continuing Resolution (CR), temporarily deferring the funding decision. However, with the House only passing one of the twelve funding bills and the Senate none, the situation appears dire.

Implications for Federal Grantseekers

Here's what grantseekers should know if the government shuts down over the weekend:

Pending and Renewing Grants

  • Anticipate Delays: Applications submitted before October 1, 2023, are likely to experience delayed review periods.

  • Mid-Negotiation Implications: Negotiations on grant terms will likely be suspended until after the shutdown.

Active Grant Opportunities

  • Process Interruptions: Open grants may have uncertain review and award pathways during the shutdown. Deadlines could be extended at the discretion of the funding office, but are not guaranteed.

  • Proactive Communication: Engage directly with relevant federal offices to ascertain the best steps concerning application submissions.

Understanding Administrative Bottlenecks

  • Personnel Challenges: The furlough of grant personnel means that grant processing will likely come to a halt for the duration of the shutdown.

  • Operational Limitations: Agencies may lack the authority to revise grant program guidelines, review applications, and determine formula allocations.

  • Agency Contingency Plans: Federal agencies have set contingency strategies for shutdown scenarios. As recommended by K&L Gates' Government Shutdown Task Force, grantseekers should proactively review the most recent agency contingency plans available on the OMB's website.

Alternatives to Federal Grants

GrantExec's live grant dashboard

While the current focus is on the potential fallout of federal grants due to the government shutdown, it's important to remember that grant opportunities aren't limited to federal sources. At GrantExec, we track an expansive pool of grant opportunities beyond the federal government. With a database encompassing over 3,500 funders and continually growing, our platform offers a wide array of funding possibilities. Whether you're a nonprofit, a research institution, local government, or an enterprise, our comprehensive approach ensures you stay updated on a diverse range of grant opportunities that align with your objectives.


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