3 Observations About the Consolidated Appropriations Act, 2018

The Consolidated Appropriations Act, 2018 was enacted by Congress and signed into law by President Trump on March 23, 2018. The Act authorizes funding for the federal government for FY 2018 ending on September 30, 2018. For nonprofits, three aspects of the Act may be of particular general interest:


The Act did not include any provisions weakening or repealing the Johnson Amendment (which has served to keep 501(c)(3) organizations non-partisan by prohibiting them from supporting or opposing candidates for public office). See Spending Bill Excludes Johnson Amendment Repeal (Nonprofit Times). This is great news for the nonprofit sector as a weakening or repeal of the Johnson Amendment would result in wide misuse of charities and their charitable assets, divert charitable donations away from their intended charitable use to support political candidates, and heightened distrust of the charitable sector. Among those opposed to any repeal or weakening of the Johnson Amendment are the National Council of Nonprofits, Independent Sector, the Council on Foundations, the National Association of State Charity Officials, and more than 5,600 organizations that have signed on to a community letter in support of nonpartisanship. However, many members of the Republican Congress are expected to continue to push for a weakening or repeal of the Johnson Amendment, which would boost their own election coffers.


The Act provides that “none of the funds made available in this or any other Act may be used by the Department of the Treasury, including the Internal Revenue Service, to issue, revise, or finalize any regulation, revenue ruling, or other guidance not limited to a particular taxpayer relating to the standard which is used to determine whether an organization is operated exclusively for the promotion of social welfare for purposes of section 501(c)(4) of the Internal Revenue Code of 1986.” This is unfortunate news for the nonprofit sector because the current law provides no bright lines to inform 501(c)(4) organizations of how much political intervention activity is permissible and limited guidance as to what constitutes political intervention activity, which is also of great significance to 501(c)(3) organizations. Political intervention activities are not considered a form of promoting social welfare, and without bright line rules, some 501(c)(4) organizations have taken an aggressive position that up to 49% of their expenditures can be used to support or oppose political candidates while still meeting the requirement under Treas. Reg. 1.501(c)(4)-1(a)(2) that it be “primarily engaged in promoting in some way the common good and general welfare of the people of the community.” See the Bright Lines Project’s Proposed Regulations for Bright Line Rules for Nonprofit Political Activity.


The Act ignored many of President Trump’s proposals to drastically cut funding and programs of great importance to nonprofits and the communities they serve. According to an article in The Atlantic titled A Domestic Budget to Make Barack Obama Proud:

The Department of Health and Human Services received $78 billion, nearly identical to the $77.9 billion Obama sought and almost 20 percent more than what the Trump budget called for. Ditto for the Department of Labor and the Department of Education, which got $1.5 billion more than Obama’s final request and nearly $12 billion more than the reduced level Trump sought. Obama-era priorities like Head Start and Pell Grants drew increases, too.

Congress eliminated none of the 18 independent agencies Trump wanted to scrap, including the Corporation for Public Broadcasting, the National Endowment for the Arts, and the National Endowment for the Humanities. And several of the programs he wanted to zero out won huge increases instead. Take the TIGER grants, an infrastructure program created by Obama’s 2009 economic stimulus package. Congress had allocated $500 million to it each of the last several years, despite annual Obama requests to boost it to $1.25 billion. Trump’s budget called for axing it entirely, but lawmakers went even higher than Obama, giving $1.5 billion to TIGER. Or the Community Development Block Grant, a federal housing program that had been receiving $3 billion from Congress annually. Obama actually proposed cutting its funding by $200 million in 2016, while Trump called for chopping it altogether. In the end, it received $3.3 billion—a 10 percent boost.