Federal research money did not disappear in fiscal year 2026, but it arrived in a very different shape. According to an October 2026 analysis from the AAMC, NIH obligated its entire extramural grant budget yet awarded about 56,600 grants, roughly 7,400 fewer than the 64,000 it awarded in FY2024. At the same time, NIH paid more projects up front through multiyear funding, and NSF carried a large share of its research budget into the new fiscal year. Together, these shifts change how every research office should approach its FY2027 research budget.
For sponsored programs offices, research finance teams, CFOs, and vice presidents for research, this matters more than the headline totals. Fewer awards, lumpier cash flow, and uncertain timing all make it harder to plan staffing, cost sharing, graduate student support, and bridge funding.
This post explains what changed, why it complicates your FY2027 research budget, and the practical steps research offices can take now to forecast with more confidence.
In This Article
- What Changed in FY2026 Federal Research Funding
- Why Fewer, Larger Awards Complicate Your FY2027 Research Budget
- The FY2027 Outlook: Continuing Resolution and Carryover
- How to Plan Your FY2027 Research Budget
- How Fibi Helps with Award and Budget Planning
- Key Takeaways
What Changed in FY2026 Federal Research Funding
NIH: full obligation, fewer grants
The AAMC report, Tracking Two Years of Change in NIH Funding, found that NIH awarded about 58,500 grants in FY2025 and 56,600 in FY2026, compared with about 64,000 in FY2024. As Inside Higher Ed reported, that is nearly 12 percent fewer grants than before the current administration took office, even though NIH obligated all of its funds in both years.
The report also notes that FY2026 began slowly. After the shutdown that ran from October 1 through November 11, 2025, year-to-date NIH obligations at the end of November were roughly 5 percent of the level seen at the same point in prior years. The pace then accelerated sharply later in the year.
The rise of multiyear funding
Multiyear funding, also called forward funding, pays for a project in full at the start instead of year by year. AAMC estimates NIH put about $2.1 billion into multiyear-funded competitive research project grants (RPGs) in FY2025 and about $1.9 billion in FY2026, compared with about $964 million in FY2024. Forward-funded awards were about 10 percent of competitive RPGs in FY2024, 25 percent in FY2025, and 22 percent in FY2026. R21 awards made up the majority of these grants.
NSF: a large carryover
The New York Times reported that NSF withheld about $1.4 billion of its FY2026 research budget, about 19 percent of its primary research budget, and carried it into FY2027. APS News reported that NSF obligated $6.4 billion in research funds across 6,218 awards in FY2026, down from $8.3 billion and 8,647 awards in FY2025. An OMB apportionment from August estimated the carryover could reach $1.7 billion, so the final figure may still change.
| Indicator | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| NIH grants awarded (approx.) | 64,000 | 58,500 | 56,600 |
| NIH multiyear-funded competitive RPGs ($) | ~$964M | ~$2.1B | ~$1.9B |
| Share of NIH competitive RPGs forward-funded | ~10% | ~25% | ~22% |
| NSF research awards | 10,937 | 8,647 | 6,218 |
Why Fewer, Larger Awards Complicate Your FY2027 Research Budget
Multiyear funding lets an agency spend its full budget while supporting fewer projects. For institutions, that changes the math in several ways:
- Fewer new awards: fewer funded projects means fewer opportunities for investigators, even when agency totals look stable.
- Front-loaded cash: a fully funded multiyear award brings all of its money into one fiscal year, which can make one year look strong and the next look thin.
- No future-year cushion: because no new money arrives in later years, overspending early in a multiyear award leaves no room to recover.
- Workforce planning: AAMC stresses that institutions need stable, predictable funding to plan faculty and staff budgets and decide how many graduate students and postdocs to admit.
- Timing risk: late-year bursts of obligations compress award setup, account creation, and hiring into a few weeks.
The FY2027 Outlook: Continuing Resolution and Carryover
FY2027 is starting under a continuing resolution. In NOT-OD-26-131, NIH confirmed that the Continuing Appropriations and Extensions Act, 2027 (Public Law 119-103) keeps the government operating through December 11, 2026 at FY2026 enacted levels. Under the CR, NIH may issue non-competing awards below the level shown on the most recent Notice of Award, with upward adjustments considered only after full-year appropriations are enacted. NIH also asks institutions to monitor expenditures carefully during this period.
The same CR bars NIH from implementing the revised Uniform Guidance (2 CFR 200) through December 11, 2026. NIH is also reviewing its administrative requirements; see our guide to the NIH burden-reduction RFI for what that could mean for research offices. Meanwhile, NSF says its carried-over funds will go toward agency priorities aligned with broader administration initiatives, so the mix of NSF opportunities may shift. Taken together, research offices should plan for reduced early-year awards, possible late-year surges, and a portfolio that leans toward some programs over others.
How to Plan Your FY2027 Research Budget
1. Build scenario-based forecasts
Replace a single projection with at least three scenarios: a flat year at FY2026 levels, a reduced year with fewer new awards, and a delayed year in which most new money arrives in the final quarter. Model sponsored revenue, indirect cost recovery, and cost-sharing commitments under each.
2. Flag every multiyear-funded award
Identify which active awards were forward-funded and track them separately. Monitor spend rates against the full project period, not just the current year, so investigators do not burn through money meant for later years.
3. Plan for reduced non-competing awards
Assume some non-competing continuations under the CR may arrive below committed levels. Decide in advance how you will handle shortfalls, including which costs can be deferred and when departments should be notified.
4. Set clear bridge funding rules
With fewer new awards, more investigators may face gaps between grants. Publish criteria for bridge funding, including eligibility, maximum amounts, and duration, so decisions are consistent and defensible.
5. Prepare for late-year surges
If agencies again obligate heavily in the final months of the fiscal year, your office will need to set up awards, create accounts, and onboard personnel quickly. Pre-build templates, checklists, and staffing plans for that peak.
6. Brief leadership regularly
Give the CFO, VPR, and deans a simple monthly view of pending proposals, expected awards, burn rates, and risks. Short, regular updates make faster decisions possible when funding news changes. Include upcoming compliance shifts too, such as the Common Rule changes facing IRB offices, since they can affect protocol timelines and staffing.
How Fibi Helps with Award and Budget Planning
Forecasting in a volatile year depends on having accurate, current award and budget data in one place. The Fibi Research Admin System, including its grant management system for research institutions, supports that work:
- Award Management: track every award from notice of award through closeout, including funding type, budget periods, terms, and reporting obligations, so forward-funded and reduced awards are easy to identify.
- Budget: build and revise detailed budgets, compare planned and actual spending, and see how much remains across the full project period, not just the current year.
- Dashboards and reporting: give finance leaders and research leadership a shared view of pipeline, awards, and spending to support scenario planning.
- Integrated workflows: connect proposals, awards, and budgets so data is entered once and reused, which helps your team handle late-year award surges.
Key Takeaways
- NIH obligated its full budget in FY2026 but awarded about 56,600 grants, roughly 7,400 fewer than in FY2024, according to AAMC.
- NIH used multiyear funding for about 22 percent of competitive RPGs in FY2026, up from about 10 percent in FY2024, which concentrates money in fewer projects.
- NSF carried about $1.4 billion of its FY2026 research budget into FY2027, according to The New York Times.
- FY2027 began under a continuing resolution through December 11, 2026, and NIH may issue non-competing awards below committed levels until full-year funding is enacted.
- Build your FY2027 research budget around scenarios, track forward-funded awards separately, set bridge funding rules, and prepare for late-year award surges.
