If your grants team spent the past year bracing for the worst, you weren’t alone. Proposed restructuring, agency consolidations, and deep funding cuts were real threats, and the uncertainty made it hard to plan strategically for FY26 federal grant funding. Many organizations pulled back from grant-seeking entirely while they waited to see what would survive.
For many organizations, the wait is over. The Consolidated Appropriations Act, 2026, which includes funding provided in the FY 2026 Labor, Health and Human Services, Education, and Related Agencies conference bill, was signed into law on February 3, 2026, and the outcome is better than the White House proposals had outlined.
What Congress Protected and What Was Rejected
The proposed agency eliminations and large-scale restructuring that had alarmed so many in the grants community, including plans to consolidate multiple agencies into a single entity, were rejected by Congress.
A proposed cap on indirect cost rates, which would have impacted universities and research institutions, was also rejected. For organizations that stepped back from grant-seeking activities, now is the time to re-engage.
“For organizations that paused their grant strategy, this is a signal to move forward, albeit cautiously. Major funding streams have been renewed, creating opportunities for grantseekers that align with administration priorities. For those that do not, versifying into state, local, and private alternatives through diversification strategy is the best approach.”
— Ryan Alcorn, Principal of AI Strategy at Euna Solutions and former Founder/CEO of GrantExec
Where Is FY26 Federal Grant Funding Going?
The table below covers the programs most relevant to grant leaders in health, education, workforce, and community services. The Why It Matters column is where your team can reference when deciding where to focus energy in the months ahead.
Program/Agency | FY26 Funding | Change vs FY25 | Why It Matters |
National Institute of Health (NIH) | $48.7B | +$415M | Biomedical research; includes cancer, Alzheimer’s, and maternal health increases |
Community Health Ctrs | $4.6B | + $340M | Largest CHCF increase in years (includes mandatory Community Health Center Fund + discretionary appropriation); major opportunity for FQHCs |
Special Diabetes (Tribal) | $200M | +$41M | Largest increase in 22 years; major opportunity for tribal health organizations |
HRSA | $8.9B | +$415M | Rural health, workforce, maternal & child health programs |
Administration for Community Living (ACL) | $2.5B | +$17M | Supports older adults and people with disabilities |
SAMHSA | $7.4B | +$65M | Opioid treatment, mental health, behavioral health block grants |
988 Suicide Lifeline | $535M | +$15M | Expanded crisis services; opportunity for community crisis centers |
State Opioid Response | $1.6B | +$20M | State-level SUD grants; Ohio among top recipient states |
Head Start | $12.4B | +$85M | Early childhood education; targeted increases for ECE providers |
CCDBG | $8.8B | +$85M | Childcare subsidies; direct opportunity for childcare and early learning organizations |
Low Income Home Energy Assistance Program (LIHEAP) | $4.045B | +$20M | Direct opportunity for community action agencies |
Title I (K-12) | $18.4B | Maintained | 25M+ students served; critical for school districts |
Special Education | $14.9B | +$20M | IDEA grants; 7M+ students with disabilities served |
CTE Grants | $1.45B | Maintained | Career and technical education formula grants relevant for community colleges and workforce boards |
CDC | $9.1B | Maintained | Major proposed cuts rejected |
Apprenticeship | $430M | New program | Pays employers directly to train workers |
SSA | $15.0B | +$544M | Frontline services; largest increase in years |
AmeriCorps | $1.25B | Maintained | Proposed elimination rejected |
Job Corps | $1.76B | Maintained | Proposed elimination rejected; youth workforce programs intact |
Dept. of Education | $79B | +$217M | Dept. maintained; elimination proposal rejected outright |
Why Stable Budgets Don’t Guarantee Funding Access
Stable budget numbers are good news, but they don’t tell the whole story of what your grants team is up against. In FY25, changes to how NIH structured its grant awards resulted in around 2,000 fewer awards. This was appropriated funding that was never distributed. NSF experienced a similar dynamic where the dollars existed on paper, but the process prevented them from flowing.
Applications across the board are now subject to closer examination, with alignment with stated federal priorities, indirect cost rates, and applicant history becoming more significant factors in award decisions. The FY26 bill includes provisions designed to address the award volume drop-off, but the underlying reality remains the same.
“The challenge is no longer whether funding exists. It’s whether organizations have the systems, data, and compliance infrastructure to compete effectively.”
— Ryan Alcorn
How to Compete for FY26 Federal Grants
Knowing where the funding is and being able to capture it are two different things. Here’s what the FY26 federal grant funding means for each side of the grants equation.
Guidance for Grant Seekers
With $41B in active opportunities and tighter application scrutiny, the organizations that win awards are those that:
- Match application narratives explicitly with current federal priority language, not just program eligibility
- Identify which of the 1,600+ open opportunities are the best fit before investing time in applications
- Track first-timer preferences actively, as agencies new to federal grants are being prioritized right now
- Have strong compliance and reporting processes and realistic indirect cost rates to withstand increased scrutiny
- Monitor solicitation activity across health, workforce, and early education
Guidance for Grant Makers
With major programs like Community Health Centers, SAMHSA, and Head Start receiving significant increases, grant makers should plan for higher application volume and a larger share of first-time applicants in their pipelines. Euna’s 2025 State of Grants Management and Technology Report found that nearly two-thirds of grants teams have just one to three people managing the entire portfolio. For lean teams, that means:
- Solicitation design matters more than ever, including clear priority language, which will attract better-fit applications.
- First-time applicants may need more pre-award support to meet compliance requirements.
- Centralized tracking and automated reporting are becoming essential, not optional, as volume increases.
- Post-award monitoring workload will grow in line with funding levels; plan staffing accordingly.
An Approach Built for Uncertainty: The Agile Grants Management Framework
Jennifer Zarek, CGMS (former Chief Data Officer, Nebraska Office of Economic Development) and Daniel Holtz, CGMS (Senior Manager, Professional Services at Euna Solutions) walk through the three pillars of agile grants management, including how to build centralized data systems, automate compliance tracking, and create processes that let teams respond quickly when funding conditions change. Available now, on demand.
Is FY26 Federal Grant Funding Stable?
The FY26 federal grant trajectory is more stable and better funded than last year’s uncertainty suggested. Health, education, workforce, and community services all emerged intact and, in most cases, stronger.
The organizations that will capture those dollars are the ones that understand where the funding is, how the process has changed, and how to position their applications accordingly.
Frequently Asked Questions
What did the FY26 appropriations bill fund?
The FY26 LHHS Appropriations Act provided $224 billion in discretionary funding. HHS received $116.8 billion, the Department of Education $79 billion, and the Department of Labor $13.7 billion. Major programs, including NIH, SAMHSA, Head Start, CCDBG, Title I, and Community Health Centers, were all maintained or increased.
Were the proposed cuts to NIH and CDC enacted?
No. A proposed 40% cut to NIH was rejected. NIH received a $415 million increase, bringing its funding to $48.7 billion instead. The CDC was level-funded at $9.1 billion, rejecting proposed cuts of roughly 50%.
Is federal grant funding stable going into FY26?
Yes, with caveats. Topline budget numbers are stable or increasing across most sectors. However, the grant-making process has changed, particularly due to increased political oversight and less deference to executive agencies. Greater scrutiny on applications, changes to multi-year award structures, and shifting federal priorities mean that competing effectively requires more than just knowing the funding exists.
What federal programs saw the biggest increases in FY26?
Notable increases include: NIH (+$415M), Community Health Centers ($4.6B total via the Community Health Center Fund), HRSA (+$415M), SSA (+$544M), SAMHSA (+$65M), Head Start (+$85M), CCDBG (+$85M), 988 Lifeline (+$15M), and State Opioid Response (+$20M). Congress established a new Apprenticeship program with $430M in total funding.
What is the Department of Education’s budget for FY26?
The Department of Education received $79 billion for FY26, up $217 million over FY25. Congress maintained Title I at $18.4 billion, Special Education at $14.9 billion, and maintained the maximum Pell Grant award at $7,395.
The insights featured in this article were informed by Ryan Alcorn, former Founder/CEO of GrantExec and current Principal of AI Strategy at Euna Solutions, drawing on his extensive experience in the grants and public sector technology space.
