The first 100 days of President Trump’s second term in office began with a frenzy of actions that left many nonprofit leaders stunned. He targeted large foundations on the grounds that the diversity, equity, and inclusion programs many grant makers support are “illegal” and “racist"; froze federal funding to human service and other nonprofits to reduce “taxpayer waste"; and gutted the country’s entire foreign aid apparatus, alleging “abuse.”
The onslaught of executive orders, threats, and payment stoppages left nonprofit leaders “shell-shocked,” said Ann Mei Chang, chief executive of Candid, which provides data and analysis about nonprofits.
Trump’s first 100 days in office were marked by attacks from the White House against higher education and civil society institutions. His DOGE team, led by Elon Musk, shut down the U.S. Institute of Peace, deeming it unnecessary, pulled grants from federal library and museum programs, and in general disrupted government bureaucracy, laying off tens of thousands of government workers. Trump withheld funds from large universities and threatened to pull their tax-exempt status unless they changed their DEI programs and hiring practices and protected Jewish students from antisemitism.
“Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’” the president wrote on his social media platform, Truth Social, adding: “Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”
Nonprofit leaders fear both a prolonged drop in federal support to nonprofits and existential threats to civil society groups.
The idea that their tax exempt status is subject to a political litmus test could “shake our country to its bones,” Chang said.
The first 100 days of the Trump administration has been “chaos,” said Leslie Lenkowsky, emeritus professor at Indiana University who was appointed by President George W. Bush to lead the Corporation for National and Community Service.
But, Lenkowsky points out, Trump’s bluster may just be an opener. Many parts of the nonprofit sector may be changed dramatically over the long term, particularly those that work internationally and may not have strong constituencies in every congressional district. But Lenkowsky hopes lawmakers exercise their prerogative to shape policy and spending decisions in the months to come, as Congress attempts to pass a federal budget and extend tax policy that was created during Trump’s first term in office.
“This has been like act one of a play with the president and his associates in the spotlight at center stage,” Lenkowsky said. “But now Congress is getting into the act.”
Also, according to Lenkowsky, Trump’s aggressive action may force a debate on contentious items, such as diversity, equity, and inclusion, which could result in a more stable policy over the long term if the legislative and judicial branches of government develop solutions that pass both constitutional muster and are accepted by wide swaths of constituents.
“By pushing the boundaries as far as he has, Trump may be leading us to adopt new ideas that we can live with more easily,” he said.
Transformed and Weakened
On Inauguration Day, Trump issued executive orders that aimed to curtail diversity, equity, and inclusion efforts within federal agencies, private corporations, and large nonprofits. He tasked each federal agency directors to identify up to nine corporations, nonprofits, universities, or foundations that may be participating in “illegal” DEI efforts, and he targeted organizations that promoted “gender ideology” by “replacing the immutable biological reality of sex with an internal, fluid, and subjective sense of self unmoored from biological facts.”
Confusion swirled around an Office of Management and Budget order that froze federal grant payments to nonprofits. The order was temporarily rescinded, but even after a coalition of nonprofit and business groups sued the administration and two federal judges ruled against the funding freeze, many nonprofits report their checks still have not materialized.
Also during its first few weeks, the second Trump administration moved to dismantle the U.S. Agency for International Development and withheld payments to international efforts such as the World Health Organization, leaving nonprofit partners in the lurch, stranding employees overseas, and forcing many nonprofits to close their doors or lay off staff.
As promised on the campaign trail, Trump quickly moved to ramp up deportations of people in the United States without paperwork, cut federal aid for legal assistance to immigrants, and blocked the intake of people trying to enter the country with refugee status. Like many other actions early in Trump’s second term, movement was quick and led to lawsuits alleging the administration has demolished the constitutional right to due process. As the administration put these policies in place, immigrant-related nonprofits dependent on government grants and contracts have been forced to cut programs and jobs.
The chaos continued in Trump’s second month in office when he instituted high tariffs on U.S. trading partners and then went back and forth on tariff rates as well as goods and industries that might be exempted from the levies.
Investors headed for the exits on the tariff news, which not only posed the threat of higher costs for nonprofits but also raised the specter of a massive donor withdrawal.
Meanwhile, Trump removed perceived ideological foes from the board of the Kennedy Center and installed himself as chairman. His administration directed the Smithsonian Institution to remove from exhibits items that seek “to undermine the remarkable achievements of the United States by casting its founding principles and historical milestones in a negative light.”
As a result of the many-sided attack, the nonprofit sector has been “forever transformed and weakened,” said Suzanne Nossel, the former CEO of PEN America, a nonprofit dedicated to writers and free expression. Trump’s excursion into the humanities, she suggested, could have a long-term effect if the Trump effect isn’t blunted.
“People could be so afraid of defying government edicts and orthodoxy that they don’t even think up the subversive play or work of theater or piece of scholarship that they might have otherwise pursued,” she said. “Those ideas can be just shut down in a climate of fear where the range of thinking and discourse is narrow.”
Nossel and other nonprofit leaders said philanthropy is still struggling with how to answer Trump’s early moves.
While foundations were initially largely silent, compared with their coordinated efforts in the early days of Covid and following the police murder of George Floyd in 2020, a coordinated response began to gel in April. More than 100 nonprofits signed a pledge to “meet the moment” and increase their payout. And a solidarity pledge by leaders from the Freedom Together, MacArthur, and McKnight foundations, each of which has increased its own grant-making budget, collected more than 250 signatures.
Trump’s actions during the past 100 days don’t look like just an effort to push a certain line of policies, some nonprofit leaders say. Instead, by attempting to install DOGE officials in nonprofits, such as at the Vera Institute of Justice, or threatening to yank tax-exempt status from nonprofits and universities, they look like an all-out assault on civil society.
Already Trump’s second term has left more than 10,000 laid-off nonprofit workers in its wake. More job cuts are probably to come, said Akilah Watkins, CEO of Independent Sector, a membership group of nonprofits and grant makers.
“I don’t want to give people false hope,” she said. “This summer is going to be a shaky one for nonprofits. They are still doing the Herculean work every single day, and the need is getting greater, while funding is being squeezed.”
