The Trump Administration’s Effect on the Nonprofit Sector
President Trump’s administration has brought about uncertainty for many in the non-profit sector. Based on recent Executive Orders (“EO”), organizations may experience limits or changes in federal funding & disbursement, the regulatory environment, investigation & audit, government contacts & resources, as well as targeting based on policy stances and the communities which they serve. During this time, it is important for nonprofits to keep up with policy changes, evaluate and diversify funding, and protect their interests through litigation and advocacy.
What Nonprofits Should Prepare For
Although the full effect of President Trump’s EOs are unclear at this time, many nonprofits are already bracing for the possibility of delayed, complicated, or eradicated federal funding. Many theorize that actions taken by the Administration, including the hiring freeze and return to in-person work initiative, will damage communication and resource channels between the federal government and non-profit organizations. It is likely that organizations serving immigrant, LGBTQ+, gender-based, and environmental protection communities will be affected the most. Additionally, the administration’s EOs have begun to target organizations dealing with the funding and support of certain community services, including libraries, museums, and nonprofit arts & culture programs.
Under the Trump Administration, federal Diversity, Equity, and Inclusion (“DEI”) programs will be eliminated. Section 4 of the EO titled Ending Illegal Discrimination and
Restoring Merit-Based Opportunity specifically names large nonprofit organizations as eligible for civil compliance investigations, as identified by federal agencies. Additionally, DEI programs are often contracted from or work in conjunction with nonprofit organizations, which, along with the above EO, extends anti-DEI legislation to the private sector.
Nonprofit organizations which work with immigration, refugee, or humanitarian aid should also expect pushback from the Trump Administration, especially after the passage of the EO titled Protecting the American People Against Invasion. This EO requires that the Attorney General and Secretary of Homeland Security review federal funding of Non-Governmental Organizations (“NGOs”) supporting “illegal aliens.” The administration may pause funding as they look for compliance with immigration laws, waste, fraud, and abuse. Depending on the result of these audits, federal funding may be terminated.
The EO titled Initial Recissions of Harmful Executive Orders and Actions may also have a profound effect on the nonprofit sector as well, as it overturned a wide array of EOs including No.14084, which provides that “the arts, the humanities, and museum and library services are essential to the well-being, health, vitality, and democracy of our Nation.” Based on this stance, that executive order integrated such services into economic development, policy, and strategy initiatives. Without this initiative, nonprofits may play a smaller role in federal strategy pertaining to policy and development.
What Nonprofits Can Do In Response
Nonprofit organizations will likely take on a gap-filler role during this Administration, helping to disperse resources and services that the federal government limits. In many senses, non-profit organizations will take on a particularly important role, especially in areas where the Administration orders funding cuts or ends federal programing. During this transition period, it is important that nonprofits keep up with changing policy. President Trump’s EOs are expected to be litigated heavily, and there may be uncertainty as issues are resolved during this time. It is important that nonprofits evaluate their streams of income and make plans to supplement federal funding which may be unreliable at this time. Overall, now is an important time for nonprofits to strategize, connect, and stay up to date on policy reforms and legislation.