Who Deserves Federal Funding?

A new, 400-page proposal from the U.S. Office of Management and Budget aims to implement strict regulations on how federal grant money is distributed and who is eligible to receive it. The sweeping wording around diversity, equity and inclusion initiatives, in particular, could put funding for many venues, associations and organizations at risk.

According to the document, the revisions are meant to "improve transparency, accountability, and oversight for federal awards across the federal government," with the goal of using taxpayer money more efficiently. Specifically, as called out in the executive summary, new restrictions will be aimed at eliminating funding for "woke" and "far-left" programs, including, as stated in the summary, "diversity, equity and inclusion policies and preferences across the country."

Within the document are restrictions around the hosting of and attendance at conferences where the organization or the venue has received federal grant money, targeting topics related to DEI and including wording that would restrict with whom researchers can gather and collaborate. One point within the document says, "Discretionary awards must, where applicable, demonstrably advance the President's policy priorities."

Sounding the alarm

Tommy Goodwin, president and CEO of the Exhibitions and Conferences Alliance, has read through much of the document, parsing what it would mean for the meetings industry if the regulations go into effect as scheduled on Oct. 1.

"It's clear they want to put centralizing control around grants and contracts, and to put a political lens on it," he said. "You think about the researchers, you think about the universities, you think about the health care — obviously they're trying to bring that political lens into that type of research activity, but it's been written so broadly and it covers so many different things that the unintended consequences here are just staggering."

Comment window is open

Since the document was announced June 19th, the OMB already has received nearly 70,000 comments — an astronomical amount for any such proposal, according to Goodwin, who expects the number to reach more than 100,000 by the comment deadline of July 13.

In its comments to the OMB, the ECA wrote:

"Every day, exhibitions, meetings, conferences, conventions, trade shows, expositions and other business and professional events attract attendees, academics, conferees, exhibitors and buyers from across the country and around the world to connect, share knowledge and conduct business in communities from coast to coast. These events drive economic growth, support job creation, empower small businesses and help solve our most urgent societal challenges. In addition, they drive demand for restaurants, hotels, travel services and Main Street commerce nationwide. Our industry, which is comprised of more than 99 percent U.S. small businesses, employs 2.6 million Americans and will drive more than $400 billion in domestic spending this year.

"On behalf of event and meeting organizers, exhibitors, suppliers, venues and other key small-business stakeholders, ECA writes to express its strong opposition to the proposed changes and requests that [they] be withdrawn."

Another commenter wrote: "By impinging upon the recipient’s ability to mount a scientific conference or other event, the rule also has an adverse economic effect on hotels, providers of services such as audio-visual, printing, catering, etc., transportation companies and other industries."

Codifying executive orders

As noted in an alert from law firm Holland & Knight, the proposed rule rolls back some changes made by the Biden administration, and many essentially codify executive orders issued by President Trump.

Holland & Knight also point out that the proposed rule significantly expands an agency's authority to terminate and suspend federal awards, saying they can use a new, discretionary, "national interest" determination, that basically allows agencies to terminate awards based on an assessment that the it does not align with the current agency's and the administration's priorities.

Goodwin says he feels that this regulation is indicative of what the meetings industry's Washington, D.C., experience has been over the last 18 months. "We're not being targeted by any of these different laws that we're seeing," he said. “We're not being targeted by tariffs, we're not being targeted by this regulation, but we are definitely either directly or potentially impacted by them.”