CDC Ended Direct HIV Prevention Funding to CBOs. Here Is What to Do in the Next 90 Days.

First, a correction to my own record. In June I told you this publishes on the 10th of every month. It publishes quarterly now.

Now. Let's talk about what is happening to your funding this month.

The short version: the money is being rerouted, the rerouting costs you, and the rules that will govern you on the other side were supposed to change October 1 until Congress froze them until December 11. That freeze is your window. The rest of this is what to do with it.

What Actually Happened

CDC's National Center for HIV, Viral Hepatitis, STD, and TB Prevention is not renewing PS21-2102, the five-year cooperative agreement that has funded comprehensive high-impact HIV prevention through community-based organizations. Agency staff were told in July. Organizations currently holding awards received a three-month extension. It ends this month, and they have been told no new funding opportunity is coming.

The scale, per KFF's analysis of USAspending data: $239.3 million over the grant period to 96 organizations across 62 counties in 31 states, Washington D.C., Puerto Rico, and the U.S. Virgin Islands. Roughly $442,000 per organization per year. Forty-nine percent of it, $118 million, went to the South, the region carrying over half of all HIV diagnoses in this country.

CDC has funded community-based organizations directly for this work since the late 1980s. That ends now.

The replacement is not a replacement. CDC has made supplemental funding available to state and local health departments under a separate, preexisting mechanism, PS24-0047. Health departments can apply for it. And here is the sentence I need you to sit with: under that mechanism, health departments are encouraged, but not required, to engage community-based partners.

Encouraged. Not required.

That distinction matters, because you cannot rally around a line item that still exists. You can only prepare for what happens to it on the way down.

The Part Nobody Puts in the Press Release

Here is what "routed through the health department" means in practice, and I am saying it plainly because I have sat on both sides of these contracts.

A percentage comes off the top. Every pass-through entity retains a portion of the award for administration. That is not corruption. It is how the mechanism works, and administering a subaward portfolio genuinely costs money. But it is arithmetic. A CDC employee told Government Executive exactly this: “The result is more overhead cost for the states, which means less money that ultimately ends up with the CBOs.” When the people running the program say it out loud, believe them.

You inherit a second rulebook. You will still be accountable to every federal requirement. You will now also be accountable to your county or state's procurement rules, insurance requirements, invoicing formats, reporting calendars, and whatever local policy someone added in 2019 after an audit finding. Compliance burden does not transfer. It accumulates.

The money arrives late. Contract execution at the county and state level is slow. Solicitation, review, award, contract negotiation, board or council approval, encumbrance, notice to proceed. I have watched organizations wait six months into a fiscal year for a contract they were verbally awarded in June. Meanwhile the work does not pause, because the work is people. So you front it. Out of reserves, if you have them.

And the math does not close. KFF ran the numbers. If health departments fund CBOs at CDC's minimum recommended levels, the estimated one-year supplemental reaching community organizations comes in 27% to 71% lower than the final year of direct funding. To simply match what CBOs were already receiving, health departments would have to allocate about 35% of their awards to community partners, well above the recommended minimums of 10%, or 25% in Ending the HIV Epidemic jurisdictions. Twenty-nine of the 36 relevant health departments, 81% of them, would have to exceed the highest recommended minimum just to hold you level.

And that assumes they apply, are awarded, and choose to pass it through. Tennessee has already rejected CDC HIV prevention funds entirely, so there is nothing there to allocate.

So: less money, more rules, later arrival, and no requirement that any of it reach you. Applied to organizations that were already running lean.

To be fair: health departments did not ask for this either, and most are absorbing a new subaward portfolio with no new staff to manage it. But your health department is now your funder, not your peer, and that is a different relationship than the one you had last year.

The Reprieve You Did Not Ask For

Now the part almost nobody is connecting, and it changed five days ago.

In May, OMB proposed the most sweeping rewrite of the Uniform Guidance, 2 CFR Part 200, in a decade. The National Council of Nonprofits' read is blunt: the proposal would hand the executive branch near-unlimited discretion over federal grants, let agencies steer discretionary awards by ideology rather than congressional intent, and specifically threaten programs addressing racial and social disparities. OMB and the agencies intended to finalize it effective October 1, the start of FY2027.

That is no longer happening on that timeline. On September 2, the Continuing Resolution was signed with a provision barring OMB from issuing or finalizing that rule through December 11, 2026.

Read the sequence. Your funding converts in September. The rules for what you convert into are frozen until December.

You did not get a reprieve on the money. You got a reprieve on the rulebook, and it is roughly ninety days long. That is the entire strategic window this post is about, and if you are reading this the day it publishes, your ninety days run out in the first week of December, right as the freeze lifts.

One thing worth knowing while you plan, because it is settled law and not a proposal: the 2024 Uniform Guidance reforms are already in effect and they are on your side. The de minimis indirect cost rate is 15% of modified total direct costs. Pass-through entities, meaning your state and county, must accept federally negotiated indirect cost rates for subrecipients. Federal agencies may not compel you to accept a rate below the de minimis unless a statute requires it. And if someone disputes your negotiated rate, you can notify OMB directly. Most organizations do not know they have that leverage. You do now.

Why This Lands Harder Than a Budget Line

I need to say the thing I actually came here to say.

Community-based organizations are not service delivery vendors that happen to be local. They are the reason the work functions at all. They are the hub. They hold the relationships that took fifteen years to build with people who had every reason not to trust anyone wearing a badge, a lanyard, or a clipboard. When someone living with HIV walks through a CBO door, they are walking through it because of a specific person inside who earned that, one conversation at a time. That trust does not survive a procurement cycle.

CDC knew this. It is in their own funding announcement: CBOs are “recognized and remain important partners” precisely “because of their accessibility, history, and credibility in the community.” They wrote that down. Then they ended the mechanism that funded it.

I learned this in Madera County in 2014, sitting across from families who had been failed by systems and by workers who came and went. What I understood then and have never stopped understanding is that the communities who need these programs most are the ones who can least afford for them to be poorly designed, underfunded, or abandoned.

So when funding stops flowing directly to the organizations that already built that trust, after they built it, the loss is not measured in dollars. It is measured in the people who stop showing up because the person they trusted is no longer there, and in how long it takes to rebuild something that should never have been disrupted.

That is the real cost. And it will not appear in anyone's impact report.

What To Do in the Next 90 Days

I am not going to write you a eulogy. This is upsetting and you are allowed to be upset. But grief is not a strategy, and the organizations that come out of this intact will be the ones that treated it as a business continuity event starting now.

Seven things.

1. Find out who holds your money. Not the agency in the abstract. The division, the program manager, the contracts officer, the procurement calendar. Find out whether your health department even applied for the PS24-0047 supplement, because if they did not, there is nothing coming. Get on their calendar before a solicitation drops, not after. By the time an RFP is public, the scope has already been shaped by whoever was in the room during planning. Be in the room.
2. Get your indirect cost rate in order. This is the single highest-leverage item on this list, and it is available to you right now under rules already in force. If you have a federally negotiated rate, know it, document it, and require that it be honored, because pass-through entities are obligated to accept it. If you have been living on the de minimis, confirm you are actually getting the full 15% and not a number someone talked you down to. Nobody can compel you below it absent a statute. Treating the de minimis as a ceiling has quietly subsidized funders with money you did not have.
3. Model the gap honestly, then decide. Take your final year of direct funding and cut it by 27% on the optimistic end and 71% on the realistic one. That is your planning range. Put both numbers in front of your board this quarter, not in February when the contract is late. Some of you will look at the bottom of that range and conclude the program cannot be delivered at that level. Deciding that deliberately, now, is a strategy. Discovering it in month seven is a crisis.
4. Build the cash bridge before you need it. Contracts will be late. Plan for it. A line of credit, a board-designated reserve, a bridge commitment from a private funder who understands the transition. Have this conversation in September. You cannot raise a bridge while you are standing on one.
5. Assemble your monitoring file before anyone asks. Whatever the final rules look like, your pass-through entity will assess you and you will be scored. Show up already scoring well: current single audit or financial review, written procurement policy, conflict of interest policy, time and effort procedures, subrecipient monitoring documentation if you make subawards yourself. Organizations that hand this over on request look like partners. Organizations that scramble for it look like risk.
6. Do not bid alone if you can help it. A health department managing a new subaward portfolio with no new staff would rather execute four contracts than nineteen. Consortium and lead-agency structures are going to be advantaged in this environment whether or not anyone says so out loud. Decide now whether you want to be the lead agency or a strong partner to one, because both are viable and drifting into neither is not.
7. Stop treating federal pass-through as your base. It is a line now, not a foundation. If a single funding stream represents more than a third of your operating budget, that is not a funding strategy, it is a countdown. Philanthropic, state, local, earned revenue, fee for service. Build the pipeline this quarter, because the organizations that start diversifying after the contract gap has already opened are negotiating from desperation, and funders can smell it.

The Honest Part

Some organizations will not survive this. I am not going to pretend otherwise, and you would not believe me if I did.

But the ones that do will not be the ones with the best mission statement or the most compelling story. They will be the ones that read the mechanism clearly, moved in September instead of December, and built the operational infrastructure to be a good subrecipient in a system that no longer asks whether they should have to be.

That is not the system I want. It is the system in front of us this quarter. And the communities depending on you do not benefit from your outrage. They benefit from your continuity.

You have about ninety days before the rulebook unfreezes. Be strategic. Be early. Be impossible to disqualify.

If your organization is navigating this transition and you want a second set of eyes on your funding structure, your indirect rate, or your readiness for what comes after December, that is exactly the work we do. Start a conversation.