A Federal Rule Change Could Quietly Affect Your Local Free Clinic
- MaryCatherine Jones
- Jul 10
- 3 min read
This week I submitted a public comment on a proposed rule from the Office of Management and Budget that would rewrite the federal government's rules for grants and other financial assistance. The rule is broad, and its effect on Free and Charitable Clinics and Charitable Pharmacies isn't obvious at first glance. That's because most of these organizations don't receive federal grants directly.
On May 29, 2026, OMB proposed sweeping revisions to the Uniform Guidance, the government-wide rules that govern how federal grants and cooperative agreements work. The proposal would give federal agencies more authority to end or change awards mid-performance, expand how much Administration priorities factor into funding decisions, and add new restrictions on certain grant expenditures. The National Council of Nonprofits explained, "The proposal attempts to grant unprecedented discretion to any administration to withhold, suspend, or terminate grants and change terms and conditions mid-performance, forcing grantees to operate in a shifting environment. The proposal would allow an administration to determine federal awards based on partisan ideology, rather than objective criteria, community needs, and congressional intent, while decreasing public transparency throughout the process."
Most Free and Charitable Clinics and Charitable Pharmacies (FCCPs) don't hold federal grants directly, so the proposed rule's impact on these organizations is not immediately evident. However, after nearly 10 years of working with FCCPs, I am concerned about adverse effects on them.
The risk is real even when the funding is indirect
Federal dollars reach FCCPs typically through state health departments, HRSA- or SAMHSA-funded initiatives, opioid response funding, or disaster recovery allocations, rather than a direct federal grant agreement. For example, Free and Charitable Clinics commonly refer patients to breast and cervical cancer screening programs and tobacco quitlines that enter their state health departments through federal grants. Sometimes they receive subgrants to administer referrals to federally funded programs run by the state, a local university, or another nonprofit.
Regardless of the recipient, the clinics services are potentially vulnerable to federal funding disruptions or cancellations. It means the risk reaches them through another layer, one where they have less visibility into how decisions are made and less recourse if federal action disrupts their funding. A state agency, university, or larger nonprofit losing or renegotiating its own federal award can mean a clinic finds out its funding, or a specific program it relies on, changed after the fact, with no seat at the table.
The same is true for the organizations FCCs and CPs partner with to serve the same patients: food banks, domestic violence shelters, and other community-based organizations working with underserved populations. Many of these groups also depend on funding that passes through the same channels this proposal would affect.
Serving the underserved is about meeting community needs, not politics
FCCs and CPs exist to serve people who have fallen through the cracks of the healthcare system. Providing healthcare to neighbors without insurance and means is something that brings communities together rather than dividing them. The basic work of a safety-net clinic depends on stable, predictable rules that hold steady regardless of which party controls the federal government, not requirements that shift with each new administration's priorities. Yet the proposal includes vague language restricting what it calls "unlawful DEI" activity among grant recipients and subrecipients. Because that term is left undefined, it risks mischaracterizing this everyday, mission-driven work as ideological activity, and leaves the door open for future administrations, of either party, to define it differently. A clinic that tailors outreach to reach uninsured patients or has mobile outreach to specific neighborhoods, could find that ordinary practice questioned.
Keeping nonprofit finances stable
In my comment, I urged OMB to withdraw the proposed changes. FCCPs are homegrown institutions, usually founded by local clinicians, faith communities, or neighbors who saw a gap in care, and governed by local volunteer boards accountable to their communities. Federal funding, where it exists, typically supplements the local effort and frees donor dollars to be used more flexibly. A rule that shifts more discretion to federal agencies and further away from the people closest to the need runs counter to how these safety-net organizations were built to function.
If your organization touches federal funding, even indirectly
Public comments on this proposal are due Monday, July 13, 2026. If your clinic, pharmacy, or partner organization receives funding that originates from a federal source, even several steps removed, I'd encourage you to read the proposal and consider submitting your own comment before the window closes.
You can:
Read the full proposed rule on the Federal Register: OMB-2026-0034.
Comment here.
Download my full comment.
Follow me on Facebook @marycatherinejonesconsulting
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