The nonprofit world was readying for changes under Donald Trump’s second term, but nothing like what has occurred since his January 20 inauguration. President Trump has signed numerous executive orders on diversity, equity, and inclusion programs, government grants and contracts, immigration, LGBTQ+ people, and other nonprofit cause areas, which have led to fear and alarm for many in the sector and significant layoffs.
Below is a summary of the administration’s executive orders and actions, as of February 18, which have particular impact on the nonprofit sector.
Diversity, Equity, and Inclusion (DEI): “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”
On January 21, the administration sought to end diversity and inclusion programs and equitable hiring practices through an executive order that requires every federal grant or contract to certify it is compliant with “anti-discrimination” laws and does not operate any programs promoting DEI that violate “antidiscrimination” laws. The order also targets for possible investigation philanthropies and public charities with assets of more than $500 million and medical associations and higher education institutions with endowments of $1 billion or more.
Federal Funding Freeze: “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs”
On January 27, the Office of Management and Budget imposed a temporary freeze on federal funding, including grants to a wide range of nonprofits. The pause was blocked by a federal court order on February 3 after Democracy Forward filed a lawsuit on January 28.
A separate suit, filed January 28, by 22 state attorneys general led to a second federal judge issuing a second restraining order on January 31. Although the Office of Management and Budget rescinded its federal funding freeze memo on January 29, evidence of funding stops and delays, along with layoffs, are widespread. On February 10, Federal Judge John J. McConnell Jr. said the Trump administration had violated his order to halt the federal funding freeze and ordered the government to “immediately restore frozen funding.”
The Trump Administration has also stated its intention to close the U.S. Agency for International Development, one of the world’s largest humanitarian aid agencies, with an annual budget of about $40 billion and a staff of more than 10,000 people. On February 7, a federal judge temporarily blocked the Trump administration’s plan to put 2,700 USAID staff on leave and recall overseas employees of the United States. Annually, USAID provides $22 billion in grants and contracts to international organizations, many of which are nonprofits.
Nonprofits that receive federal support: “Advancing United States Interests When Funding Nongovernmental Organizations”
On February 6, a memo stated many NGOs “are engaged in actions that actively undermine the security, prosperity, and safety of the American people” and "[i]t is the policy of my Administration to stop funding NGOs that undermine the national interest.” The memo directs the heads of executive departments and agencies to “review all funding that agencies provide to NGOs” and “align future funding decisions with the interests of the United States and with the goals and priorities of the Administration.” The memo does not define NGOs, i.e., nongovernmental agencies, also known as nonprofits, and drew criticism from First Amendment advocates.
White House Office of Faith-Based and Neighborhood Partnerships: “Initial Recissions of Harmful Executive Orders and Actions": This January 20 order rescinds a previous executive order by President Joe Biden establishing the White House Office of Faith-Based and Neighborhood Partnerships. Nonprofits will no longer have direct connections to the executive branch through this office.
Immigration: “Protecting the American People Against Invasion”
This January 20 executive order requires the U.S. attorney general and secretary of homeland security to review all federal contracts, grants, and other programs that provide funding to nonprofits that support or provide services to “illegal aliens” for waste, fraud, and compliance with immigration laws. It also pauses funding, which affects nonprofits that may also serve legal, documented immigrants.
Environment: “Initial Rescissions of Harmful Executive Orders and Actions”
This January 20 order revokes several of Biden’s executive orders related to the environment, including the implementation of the Infrastructure Investment and Jobs Act. Nonprofits receiving or expecting funding in clean energy transition, climate mitigation, and various environmental programs may have their funding paused or terminated. The January 24 “Council to Assess the Federal Emergency Management Agency” order may involve contacting nonprofits to comment on their experience regarding natural disasters.
LGBTQ+: “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”
This January 20 executive order stated, “It is the policy of the United States to recognize two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality. Under my direction, the Executive Branch will enforce all sex-protective laws to promote this reality." Nonprofits connected with LGBTQ+ issues fear this order could block their access to federal funding.
