Why State and Local Governments Should Pay Attention to Executive Orders and Grant Exposure

July 29, 2025

In recent months, the federal policy landscape has shifted rapidly—with a wave of Presidential Executive Orders (EOs) directly impacting how federal financial assistance is allocated, managed, and monitored. For state and local governments that rely on federal grants to fund essential programs and services, these changes are more than policy—they are operational risks that must be actively managed. 

Executive Orders: More Than Politics

Executive Orders are not just symbolic gestures. They often result in: 

• Changes to grant eligibility and priorities
• New compliance mandates or restrictions
• Shifts in agency funding allocations
• Increased audit scrutiny or administrative burden

Whether focused on DEIA policies, immigration enforcement, climate action, fiscal accountability, or most recently crime and disorder, these directives can have tangible effects on both existing and future grant awards. 

Know Your Exposure 

Many state and local governments maintain decentralized grant portfolios—spread across departments, loosely coordinated, and sometimes poorly documented. This makes it difficult to quickly assess which programs are at risk due to new federal directives. 

Questions every government leader should be asking: 

• Which of our grants rely on agencies or programs targeted for review or rescission? 
• Do any of our funding sources conflict with evolving policy directives (e.g., sanctuary jurisdiction status, equity provisions, transparency mandates)? 
• Does a particular grant impose burdens on the program, Department/Agency, or organization as a whole? 
• Are we prepared for abrupt changes in eligibility, compliance timelines, or allowable uses? 

Scenario Planning Is Key 

The best way to manage exposure is through proactive scenario planning. By mapping your federal funding streams and overlaying current Executive Orders, your jurisdiction can: 

• Identify at-risk grants 
  
• Model impacts on staffing, services, and reporting 
• Develop mitigation plans (e.g., diversifying funding, tightening controls, advocacy strategies) 

A Strategic Imperative 

This is not about politics—it’s about governance, preparedness, and protecting your community. In an environment where grant stability can no longer be assumed, state and local governments must treat Executive Orders as early signals of operational and financial disruption. 

Now is the time to: 

• Inventory your grant portfolio 
• Conduct a lost funding analysis 
• Analyze federal funding exposure 
• Align compliance strategies with new federal priorities 
• Build internal governance teams that can act quickly 

Because the cost of inaction is too high—and in this environment, the best-run governments are the best-prepared ones. 

To learn more about the dedicated resources we have and gain valuable insights on grants management, please visit our Center for Grant Excellence page.

If you need further assistance, please reach out to see how we can help.

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