I recently joined fellow Nonprofit Radio contributor Amy Sample Ward (CEO, NTEN) in conversation with host Tony Martignetti about the political and legal developments affecting nonprofits since the 2025 changes in power. This discussion follows up on our earlier one – Looking To 2025: Is It Paranoia Or Prudence? Listen to the latest podcast here.

The following points relate to our discussion with some additional resources, updates, and my personal views:

HR 9495

• HR 9495, the scary bill that would provide the Secretary of the Treasury with sole discretionary power to designate terrorist-supporting organizations, and strip them of 501(c)(3), 501(c)(4), or similar tax-exempt status stalled in the Senate of the 118th Congress. That was largely due to successful nonprofit advocacy efforts.
• But many of us expect the bill to be reintroduced in the 119th Congress. Since the vote on the bill has mainly been on party lines, its chance for success may be higher since the Republicans now control the House and Senate.
• Led by strong nonprofit advocacy, bill opponents (myself included) may be able to defeat the bill, which did not appear to be principally about stopping the support of terrorism and instead appeared to be more about chilling dissent, particularly to the current administration’s foreign policies.
• At the same time, there are many existing laws more draconian than HR 9495 that can be used by the executive branch to disrupt and “kill” nonprofit organizations and even imprison their leaders.
• It’s important to note that HR 9495 can result in revocation of tax-exempt status, but it doesn’t in and of itself provide a right of the federal government to freeze an organization’s assets or prohibit the organization from operating.
• See H.R. 9495: What’s Next? for a deeper examination of our discussion.

Confusion, Compliance, and DEI

• Executive orders and lots of rhetoric result in “confusion and delay” (Amy referred to Thomas the Tank Engine)
  • Executive Order 14173, entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” was issued by President Trump on January 21, 2025
    • Requires agencies to include in every contract or grant award “a term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws” (emphasis added)
    • Requires the Attorney General to submit a report to the Assistant to the President for Domestic Policy containing “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI” (emphasis added) [this deceptively makes it sound like DEI is a form of illegal discrimination and preference, but DEI is undefined and can encompass a very broad array of lawful activities representative of how DEI is generally carried out in the nonprofit and for-profit sectors]
• Note the interplay of the False Claims Act, which allows the government to take action against any party that knowingly submits a false claim seeking a government payment, with the certifications required by EO 14173 and reports required for payment by a federal agency. Under the law, whistleblowers may be entitled to a portion of the recovered funds if a grantee or contractor files a false claim (e.g., that it does not operate any programs promoting DEI in a manner that violates applicable federal antidiscrimination laws (including Section 1981), which can range from 15% to 30% of the total amount. This may encourage ‘bounty hunters’ to blow the whistle on any DEI program without knowing whether it is illegal or not with some comfort of the protections given to whistleblowers.
• Also note that the executive order is not self-executing; its application to contractors requires further agency action and a notice-and-comment rulemaking process prescribed by the Administrative Procedure Act
• Organizations have different risks and risk tolerances (those dependent on federal funding are at significantly higher risk)
• Organizations should not rush to make big changes without being properly informed, bringing in their boards, and hearing from their employees
• Some resources on lawful DEI:
  • Multi-State Guidance Concerning Diversity, Equity, Inclusion, and Accessibility Employment Initiatives – the Attorneys General of Massachusetts, Illinois, Arizona, California, Connecticut, Delaware, Hawaii, Maine, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, and Vermont
  • NTEN’s Equity Guide for Nonprofit Technologies (newly revised)
• Examples of some elements of DEI programs that would be illegal:
  • Next Executive Director must by a BIPOC woman – employment discrimination
  • Our vendors must be led by a BIPOC individual – Section 1981 discrimination
  • Only BIPOC individuals may participate in this program subject to contractual terms requiring obligations from participants and other indicia that participation is subject to such and other contractual terms – Section 1981 discrimination
• State laws can be worse than even federal laws to the nonprofit sector – important to make sure complying with all the basics – see, e.g., Nonprofit Legal Compliance in an Unfriendly Political Environment (NPQ)

Data and Privacy

• Be careful in selecting what data to collect and what data to store
• How sensitive is that data and could it be subject to disclosure to a governmental entity upon demand (e.g., ICE)?
• See Cybersecurity for Nonprofits Resource Hub (NTEN)

Foreign Aid and OMB

• U.S. Agency for International Development (USAID) is the principal U.S. agency to extend assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms. It was established to help the United States achieve its foreign policy goals and national security interests. USAID mitigates the risk of war, terrorism, disease transmission, access to resources. And USAID increases the country’s ability to influence foreign policies that would benefit Americans.
• See USAID Stop-Work for jobs lost.
• See U.S. Foreign Assistance Developments (Better World Campaign) for consequences.
• Post-recording development: US Supreme Court allows Trump’s freeze of foreign aid funding temporarily (Reuters)
• Others resources: Shutdown of HIV/Aids funding ‘could lead to 500,000 deaths in South Africa’ (Guardian); USAID’s apparent demise and the US withdrawal from WHO put millions of lives worldwide at risk and imperil US national security (The Conversation)

Media capitulation and abuse of media

• Media capitulation examples, as described by other publications: Washington Post (Slate), ABC News (Rolling Stone)
• Abuse of media examples: Reuters, AP, Bloomberg – see Statement from the editors of Reuters, The Associated Press and Bloomberg News
• The Media Is Giving Away Its Rights Even Before Trump Tries to Take Them (The Nation)

Recent events have shown that Trump does not have to impose a new regime of censorship if the press censors itself first. – Elie Mystal

• Trump is Waging a War to Silence the Press (U.S. News & World Report)
• Opinion: Trump wants media to bend the knee. His new FCC chairman is leading the charge (USA Today)

What Can Nonprofits Do?

• Join coalitions or supportive activist groups (Tony is co-hosting one group with Beth Kanter and Jay Frost that others can join by contacting Tony)
• Stand together with nonprofits that share your organization’s values; don’t think you’re alone
• Keep your boards, employees, and beneficiaries engaged
• Understand and provide grace to yourselves and others – it’s so hard and exhausting right now and you’ll almost certainly need to pace yourselves because resilience is a limited resource