If you've been writing grants long enough to remember the post-2021 deluge — the Infrastructure Investment and Jobs Act (IIJA), CHIPS, the Inflation Reduction Act, the COVID-era American Rescue Plan stimulus — 2026 feels like a different planet. The total dollar amounts are still enormous. But the rules of what gets funded, who decides, and which words you can put in a Notice of Funding Opportunity (NOFO) have changed in ways that matter for every nonprofit, state agency, university, and small business pursuing federal or state grants this year.
Here's what's actually happening, by the numbers and by the trend lines.
The Big Picture: A Reshaped Federal Funding Landscape
The headline shift: federal grant opportunities have dropped sharply year over year. One industry tracker reports a roughly 33% decline in federal grant opportunities in 2026, with NOFOs now drawing strictly on statutory requirements and dropping references to DEI, climate change, and other Biden-era priorities. In their place, agencies are aligning with new executive orders that elevate workforce development, deregulation, AI, and infrastructure as core priorities.
That doesn't mean the money has disappeared — it means it has been re-pointed. Capitol Funding Solutions, which tracks federal forecasts, notes that agencies will likely see a top-level decrease in spending while opening large opportunities in artificial intelligence, critical minerals and materials, defense, fossil energy, geothermal and nuclear systems, infrastructure, workforce development, and supply chain security. They also flag a notable structural change: the administration is increasingly using funding vehicles outside traditional competitive grants to give agencies more discretion in selecting projects.
Layered on top of all this is a political reality. The federal government experienced the longest shutdown in U.S. history heading into 2026, and Congress has been moving FY26 appropriations bills piecemeal rather than through one omnibus package. The practical effect for grant seekers is unpredictable timing — programs you've planned around may slip by months or be re-scoped before they ever release a NOFO.
Where Federal Dollars Are Flowing: The Winners
1. Nuclear, Critical Minerals, and "Hard" Energy Infrastructure
The Department of Energy's FY26 budget is the clearest example of a deliberate strategic pivot. Total DOE discretionary funding is around $46.3 billion, but the composition has shifted dramatically. According to Holland & Knight's analysis, the FY 2026 budget reflects a strategic realignment of DOE's energy programs, shifting away from grant-based deployment toward a focus on supply chain security, industrial competitiveness, and critical infrastructure modernization.
The numbers tell the story. The Office of Energy Efficiency and Renewable Energy (EERE) was cut roughly 74% from FY25 levels — solar, wind, and hydrogen programs were zeroed out, while early-stage R&D in geothermal, hydropower, biofuels, and critical minerals was preserved. Meanwhile, the House Appropriations Committee's Energy and Water bill puts $20.66 billion into modernization of the nuclear weapons stockpile and infrastructure, with major new investments in small modular reactors, advanced reactor demonstration projects, and one of the largest investments in critical minerals extraction in decades.
If your work touches geothermal, nuclear (any size), domestic mining and minerals processing, grid reliability, ports and waterways, or supply chain security — this is your year.
2. AI Workforce and Infrastructure
AI is the single most consistent theme cutting across agencies. The two clearest examples:
TechAccess: AI-Ready America (NSF 26-508) — A joint NSF/Department of Labor initiative announced in early 2026. The program will fund up to 56 Coordination Hubs — one for every state, the District of Columbia, and each U.S. territory — with $1 million per year for three years and a possible fourth year, totaling $224 million. Hubs are expected to coordinate AI literacy, sector-specific adoption, and workforce training between universities, community colleges, workforce boards, and employers.
EDA AI Upskill Accelerator Pilot — A $25 million pilot program from the Department of Commerce's Economic Development Administration to support AI workforce training and help regions adopt advanced technologies, launched in May 2026.
And these are just the headline programs. NSF, DOE national labs, and DOL's Registered Apprenticeship system are all weaving AI requirements into existing funding streams. Even at the state level — Wisconsin's new $7.3 million WisTRAIN program will fund employer-led training in advanced manufacturing and AI applications like data analytics, cybersecurity, predictive maintenance, and robotics, with applications opening May 2026.
3. Defense, National Security, and Border/Public Safety
The FY26 Energy and Water bill alone provides $2.17 billion for the U.S. Navy's nuclear fleet and $1.98 billion to reduce the danger of hostile nations or terrorist groups acquiring nuclear weapons. The Commerce-Justice-Science bill maintains robust funding for Byrne JAG formula grants and COPS Hiring grants, plus increased Drug Enforcement Administration funding aimed at fentanyl.
4. Broadband — Finally Moving to Construction
The $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program is the IIJA's signature broadband investment. After a year of restructuring under the new administration, BEAD has finally cleared most of its administrative bottlenecks. As of May 2026, all 56 states and territories have submitted their Final Proposals, 54 have received NTIA approval, and 51 have signed their award agreements.
The trade-off: the restructured program de-emphasized fiber and built in more room for fixed wireless and low-Earth-orbit satellite. According to Light Reading's year-end review, states overall will still use fiber for about 63% of locations, followed by LEO satellite at 22.6%, fixed wireless at 12.1%, and cable at 2%. For contractors, engineering firms, and ISPs, this is the moment to position. Texas alone awarded $1.2 billion in federal grant funds to 22 applicants serving more than 240,000 broadband-serviceable locations, with construction expected to begin summer 2026.
5. Career and Technical Education (with Strings)
The Carl D. Perkins Career and Technical Education Act remains a workhorse program, with the Senate's FY26 bill maintaining roughly $1.45 billion in level funding for Perkins V's state grant program along with $12.4 million for national activities. The administration's budget proposed restructuring how those funds can be used — directing them more squarely at middle and high schoolers and away from community colleges — but that change requires Congressional action and remains contested.
Where Federal Dollars Are Pulling Back
Just as important as knowing what's funded is knowing what's not. The clearest losers in FY26:
- Renewable energy deployment — Solar, wind, and hydrogen are essentially zeroed out at DOE, and the Office of Clean Energy Demonstrations is being eliminated.
- Environmental justice and equity programs — DOE's Office of Energy Justice and Equity and EPA's Environmental Justice program have been zeroed out in House bills.
- IIJA unobligated balances — DOE's budget proposes cancelling $15.2 billion of unobligated balances from the Infrastructure Investments and Jobs Act, redirecting much of it toward nuclear and critical minerals.
- Manufacturing Extension Partnership (MEP) — The proposed budget eliminates the program that supports small and mid-sized manufacturers, despite the administration's stated reshoring goals.
- Some core workforce programs — The proposed "Make America Skilled Again" consolidated grant would fold multiple discrete workforce streams into a single block, which the National Skills Coalition warns would obscure program outcomes for specific populations like veterans, youth, and people with disabilities.
There's also growing post-award risk. Recent executive orders give agencies more leeway to terminate existing awards, and political appointees are involved more deeply in award decisions. Grant compliance and alignment with current priorities matters more than it did even 18 months ago.
State-Level Action: Backfilling and Specializing
State budgets are doing something interesting in 2026 — many of them are positioning to backfill federal cuts in healthcare, food assistance, and clean energy, while doubling down on their own priorities.
California offers the clearest example. Governor Newsom's revised 2026-27 budget — a roughly $348.9 billion plan — proposes $60 million to support reproductive health providers affected by federal funding cuts, $383 million to offset reduced federal CalFresh share, $200 million to replace canceled federal EV tax credits, and $500 million for the Housing, Assistance and Prevention Grant program. The state is explicitly using state dollars to keep programs alive that lost federal support. California is also making what its administration describes as the largest special education investment in state history, increasing ongoing special education funding by $2.4 billion, or 43%, alongside a $5 billion Student Support and Professional Development block grant.
Other states are using competitive federal awards to launch their own targeted programs. Wisconsin's WisTRAIN, mentioned earlier, is a textbook example of a state translating a federal Industry-Driven Skills Training Fund award into a state-administered grant program for employers.
A broader pattern across states in 2026:
- States with strong tax revenues are expanding education and clean infrastructure grants (California, Massachusetts, New York).
- States facing deficits are tightening discretionary programs and prioritizing core formula spending.
- States with strong industrial bases (Wisconsin, Indiana, Tennessee, the Carolinas) are leveraging federal AI and advanced manufacturing dollars to build state-level training programs aligned with regional employers.
- Rural and agricultural states are leaning into USDA partnerships and BEAD construction.
For grant seekers, this means the state-level opportunity set is genuinely more interesting than it was two or three years ago. State workforce boards, governors' offices, and state economic development agencies are functionally re-granting federal dollars on faster cycles than the federal agencies themselves.
Practical Takeaways
If you're chasing grants in 2026, a few things actually matter:
1. Read the executive orders. This year, more than most, the language in EOs and OMB guidance is being copy-pasted directly into NOFOs. Aligning your project narrative to current priorities — AI literacy, workforce development, supply chain security, reshoring, baseload energy, public safety — is no longer optional.
2. Watch state programs as a parallel pipeline. State workforce boards, broadband offices, and economic development agencies are administering more federal pass-through dollars than ever, often with simpler applications and faster timelines than going direct to federal agencies.
3. Tighten your compliance posture. With more agency discretion and more politicized award decisions, post-award termination risk is real. Build internal documentation, audit trails, and reporting systems before you need them.
4. Engage program officers early. Unwritten priorities matter more in 2026 than they did under the previous administration's more rules-based approach. A 20-minute call with a program officer can save you from writing a proposal that's structurally misaligned.
5. Don't overcommit to any single funding stream. Programs are being restructured mid-cycle, unobligated balances are being clawed back, and even appropriated funds face termination risk. Pipeline diversity — federal, state, foundation, corporate — is no longer a nice-to-have.
The Bottom Line
2026 is not a year of less money. It's a year of differently directed money, with a sharper political edge, faster timeline shifts, and meaningful state-level alternatives emerging in real time. If your work fits the new priority map — AI, workforce, nuclear, critical minerals, defense, broadband construction, public safety — you have more competitive opportunity than you've ever had. If it doesn't, the path forward runs through state agencies, philanthropy, and reframing how you describe what you do.
Either way, the organizations that win in 2026 will be the ones that read the landscape clearly, write to it honestly, and don't pretend the rules of 2022 still apply.
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*Sources for this piece include Department of Energy FY26 Budget in Brief, House Committee on Appropriations FY26 press materials, Holland & Knight DOE budget analysis, NSF Solicitation 26-508 (TechAccess: AI-Ready America), NTIA BEAD Progress Dashboard, California Governor's Office 2026-27 budget materials, the Wisconsin Department of Workforce Development, Capitol Funding Solutions, Granted AI, and the National Skills Coalition.*