Public Policy Update - February 6, 2025
Philanthropy Southeast regularly provides members with updates on the latest public policy developments in Washington and state capitols around the region, analyzing their possible impact on the charitable sector. If you would like to see an issue featured in a future Public Policy Update, contact Jaci Bertrand at jaci@philanthropysoutheast.org.
Assessing the Impact of Recent Executive Actions on the Charitable Sector
Philanthropy Southeast has been closely monitoring executive orders and other actions taking place in Washington that could affect philanthropy and the broader charitable sector.
One of President Trump’s first executive orders takes aim at efforts to promote diversity, equity, inclusion and accessibility (DEIA, or DEI) in both the public and private sectors. While this has already resulted in sweeping changes within federal agencies, the impact beyond the federal government, including the philanthropic sector, is still unclear.
Notably, the order requires federal agencies to “identify up to 9 potential investigations of corporations, large nonprofits or associations, or foundations with assets of $500 million or more.” It also requires agencies and the attorney general to “take appropriate action” to advance “anti-DEI” in the private sector.
It is possible these provisions could result in investigations of large foundations or efforts to discourage or halt philanthropic work tied to advancing equity. At this point, however, there is nothing contained in the executive order requiring nonprofit organizations, including foundations, to change how they direct resources.
A separate executive order calls for the termination of all DEI programs in federal agencies including equity-related grants and equity action plans that were formulated during the Biden administration. While not surprising, this demonstrates that federal agencies will not serve as partners to the sector on equity and inclusion work going forward.
The January 27 memo from the Office of Management and Budget, ordering a pause for all federal grant programs, sent shockwaves through the charitable sector. While OMB rescinded the memo on January 29, the agency has also been placed under multiple restraining orders while courts consider the memo’s legality.
A National Council of Nonprofits analysis of these moves found that “[n]onprofits partnering with federal government agencies or receiving federal funding, especially through government grants and contracts, may experience longer wait times and slower processing, loss of points of contacts or difficulty reaching them, and increased strain on relationships,” and that nonprofits “will no longer have direct White House connections through the Office of Faith-Based and Neighborhood Partnerships.”
Nonprofit organizations working with immigrant, refugee and LGBTQ+ communities may also be under additional strain due to other executive orders affecting those groups.
The Alliance for Justice has published a guide for foundations and other nonprofits on responding to these executive orders and others. The list includes:
- Publicly criticizing actions that run counter to your organization’s values. Since President Trump and his appointees are not candidates for public office, this does not violate rules on nonprofit advocacy.
- Reach out directly to administration officials to tell them how these actions affect your work and the communities you support.
- Directing funding toward organizations that are under added strain or experiencing gaps in funding, as well as organizations that engage in advocacy themselves.
Time Is Running Out: Sign Up for Foundations on the Hill!
Major tax legislation is high on the agenda of both leaders in Congress and the White House this year, creating an opportunity for policies that strengthen philanthropy – but also the threat of laws that weaken our ability to support communities and people in need.
Lawmakers need to know about the great work philanthropy does throughout our region – and how policy can help or harm our sector. That’s why we need you at Foundations on the Hill later this month!
Foundations on the Hill, taking place February 23-26, will bring dozens of philanthropic leaders to Washington, D.C., to meet with lawmakers and key staff and advocate for policies that strengthen your ability to make an impact.
Learn why you belong at FOTH: View the recording of our recent webinar, Why You Belong at Foundations on the Hill, to learn why it’s important to connect with lawmakers and how Philanthropy Southeast will support you before, during and after your time in Washington.
New to policy and advocacy? Foundations on the Hill includes optional programming from our partners at the United Philanthropy Forum to help you learn about issues relevant to our field, along with tips and strategies for effective meetings and other outreach to policymakers.
Republicans Divided on Path for Tax Legislation
A razor-thin Republican majority in the House is complicating efforts by Speaker Mike Johnson (R-LA) to pass a single budget package that could include tax provisions affecting philanthropy.
Politico reports that House Republicans are divided along both ideological and tactical lines as they try to find a path forward on a budget blueprint. Johnson had hoped to advance a single bill under the reconciliation process, which is designed to avoid a filibuster in the Senate.
With House Republicans unable to agree on an approach, the Senate may wind up taking the lead – Republican leaders there signaled this week they will move ahead with a two-bill strategy that would prioritize border security and put off tax legislation until later in the year.
Using the reconciliation process to extend or deepen the tax cuts passed during Trump’s first term would require lawmakers to find offsets – either by cutting spending elsewhere or finding new sources of revenue.
Both approaches could have negative effects on the charitable sector. Spending cuts to programs like Medicaid and SNAP would put additional pressure on community nonprofits. Philanthropic leaders are also concerned that endowments could be targeted as a source of revenue in future legislation.
