Trump Is Scaring Donors Away From Progressive Nonprofits

As President Donald Trump guts the federal regime there s a greater need than ever for nonprofit organizations to step up and fill the void But there s a Trump-shaped fundraising predicament looming over the nonprofit sector Fearful of Trump s penchant for targeting his perceived political enemies specific nonprofit leaders say the large donors who help subsidize their operations are pulling back Even though the Trump administration has mentioned it will not move forward with a series of rumored executive actions targeting nonprofits this retreat by large donors poses a critical issue especially as the federal cabinet has slashed grants and issued stop-work orders already restricting key services It s kind of a perfect storm of the federal cuts happening and philanthropy not moving as promptly as one would hope noted Lynn English president and co-founder of English Hudson Consulting a improvement and consulting firm that works with dozens of nonprofits across the United States including groups that have been outspoken against Trump Anyone who has federal money is cutting expenses cutting staff and trying to figure out where they can possibly make up the gap Threats from senior administration administrators to foundations and nonprofits tax-exempt status have heightened donors concerns about giving to causes that might be perceived as opposing Trump and singled out for retribution like law firms universities and news organizations leaders of nonprofits notified The Intercept The consequences are being felt at nonprofits that focus on state transgender rights racial justice and gender equality Both Trump and Vice President JD Vance have made no secret of their animosity toward certain nonprofits and major funders In his Senate campaign Vance argued that major foundations and academic institutions should lose their tax-exempt status The Ford Foundation the Gates Foundation the Harvard University endowment these are fundamentally cancers on American society but they pretend to be charities so they benefit from preferential tax medication Vance advised Tucker Carlson during a Fox News interview More in recent weeks Trump has publicly threatened to revoke Harvard University s tax-exempt status while implying broader risks to other nonprofit organizations and foundations Tax-exempt status it s a privilege It s really a privilege And it s been abused by a lot more than Harvard Trump described reporters last Thursday Last week the administration cut billions of dollars in federal funding to the university for research purposes though its tax-exempt status for now remains unchanged At the Thursday news conference Trump also threatened specific nonprofit organizations namely Citizens for Responsibility and Ethics in Washington a establishment watchdog organization that has repeatedly sued the Trump administration It s supposed to be a charitable organization Trump advised reporters The only charity they had is going after Donald Trump So we re looking at that We re looking at a lot of things Related The House Just Fortunate Trump s Authoritarian Playbook by Passing Nonprofit-Killer Bill Were a nonprofit to lose its c status it would have to pay corporate income tax and in particular cases back taxes It would also block an organization from receiving the majority types of federal and foundation grants Donations to that group would no longer be tax-exempt making it significantly more complicated to fundraise A rumored executive order targeting context organizations on Earth Day did not materialize The White House stated Politico this week No such orders are being drafted or considered at this time However Trump on Thursday urged Attorney General Pam Bondi to investigate alleged unlawful foreign contributions on ActBlue a fundraising platform widely used by Democratic campaigns Various nonprofits including The Intercept use ActBlue Charities to process donations This conditions is causing hesitation among large donors mentioned English They re being much more cautious she explained and I think it is the threat of either litigation or attacks on their c status or attacks on their endowment that are causing specific real delays in getting money on the ground If they re going to be attacking us I want to show people why Kaniela Ing national director of the Green New Deal Structure reported that organizers focused on circumstances change have been warned to stay quiet to avoid attacks on their c status like those in the rumored executive order Particular of the advice that I ve been getting is to be silent on social media reported Ing But he rejects that logic If they re going to be attacking us I want to show people why I don t want to have to tell them after the fact Ing revealed I want to make it clear that this a fight of good and evil And we re the good guys While it s still too early to get a full financial picture of how donors are responding across the nonprofit ecosystem layoffs at large nonprofit organizations working on left-leaning issues like LGBTQ rights provide a clue In February Human Rights Campaign the largest LGBTQ advocacy organization in the U S laid off percent of its staff Another major LGBTQ nonprofit GLSEN laid off percent of its staff that same month English reported donors were much more willing to advocacy causes in opposition to Trump in his first term illustrating how much landscape has shifted in a second term focused in large part on revenge They are trying to figure out what position they can take under the administration she mentioned Under Trump the foundations came out very expeditiously to fund the pushback and they came out with a lot of money to fund litigation and movement-building organizing This time around they are taking more time Part of the issue with hitting so countless nonprofits at once with federal funding cuts and freezes is that all of these groups are fighting for the same pool of funding of nongovernmental funding At least percent of the estimated million nonprofits in the U S receive federal grant funding Larger organizations are more reliant on grants with percent of nonprofits with budgets over million receiving at least one governing body grant Environmental Protection Agency Administrator Lee Zeldin revealed that the administration had canceled over environmental justice grants totaling billion in losses across multiple organizations In the foreign assistance sector Trump slashed percent of the U S Agency for International Maturation s foreign aid contracts in February totaling billion meaning the thousands of contractors relying on this funding now have to fight for the same pot of donor money So even if an individual donor isn t fearful of attacks by the Trump administration and might have more leeway than a corporate donor or a large foundation demand for their dollars is now at an all-time high alicia sanchez gill executive director of Emergent Fund which provides rapid-response funding to BIPOC and LGBTQ organizations and also co-runs the Action for Transformation Fund along with the Transgender Law Center noted the groups they fund are seeing donors pull back at a critical moment What we re seeing from the philanthropic ecosystem is that there is not the bump that we saw in she disclosed And in fact we re seeing a lot of funder retraction in this moment sanchez gill argues that funders are scared of associating with nonprofits that could be targets We are seeing our grantees veritably be either denied funding in order to minimize funder exposure she explained Or just complete for lack of a better term ghosting by funders sanchez gill noted that multiple of the organizations Emergent Fund and the Action for Transformation Fund work with already struggled to get funding Less than percent of philanthropic dollars goes toward advocacy trans-led organizations according to the Equitable Giving Lab A great number of of the groups that we fund authentically at Emergent Fund and at the Action for Transformation Fund already are deeply divested from the federal governing body and from state institutions and from philanthropy itself she revealed If their organization no longer existed a multitude of of these organizations could go without the rapid-response funding they need to survive The bitter irony is that this is the exact moment that marginalized communities need these guidance the the bulk We ve really seen a surge in applications from groups that are facing state violence and surveillance reported sanchez gill Last year sanchez gill revealed that her organization received roughly to proposals in a month Last month it received roughly proposals underscoring the increased need in the communities it serves There is no greater menace in this moment than defunding the communities who are doing the preponderance mission-oriented and necessary work right now she reported Federal cuts to nonprofit grant recipients have already had devastating consequences Trump has frozen billions in federal grants to universities states and other nonprofit entities across the country Last month for instance the Trump administration cut funding to programs that provide legal services to unaccompanied minors Unlike in the criminal legal system in the U S people do not have a right to counsel in immigration court which means that every year tens of thousands of children are forced to represent themselves against the ruling body In nearly half of all unaccompanied minors represented themselves in immigration court But federal funding cuts from the Trump administration are threatening even the existing services in place for these children and philanthropic dollars cannot fill the gap A judge has blocked the implementation of these cuts for now but the impacted nonprofits expect the Trump administration to continue its assault on the project as well as other immigrant legal services We re talking about children across the country who will lose an attorney Abegail Baguio progress and communications director for the Amica Center for Immigrant Rights mentioned these cuts would directly impact minors in their legal services effort We re talking about children across the country who will lose an attorney reported Baguio The threat to the organization runs deeper than just its project for unaccompanied minors Baguio stated that the Amica Center for Immigrant Rights receives roughly percent of funding through federal contracts Even with an outpouring of new philanthropic endorsement it won t be able to make up the loss of federal funds if the Trump administration succeeds in fulling stripping them away There s no way that private philanthropy can fill that gap she declared If the federal coffers fully close we re going to see families separated families separated We re going to see people being deported without having access to due process rights commented Baguio Organizations with federal funding doing work from cancer research to feeding people are being forced to lay off up to percent of staff revealed English the nonprofit consultant Next she noted it will be cuts to services An analysis from the Urban Institute after Trump temporarily froze nearly all federal grants nationwide detected that in every state to percent of nonprofits that receive federal funding could fail to cover their expenses if executive funding remained frozen or disappeared Despite the risks to funders donors and nonprofits sanchez gill declared the worst mistake would be to concede defeat Now is really the time to double down on trust-based funding that resists authoritarian control she commented Now is the time to push back We can t cede power in advance We can t cower in advance or retreat in advance The post Trump Is Scaring Donors Away From Progressive Nonprofits appeared first on The Intercept