From funding cuts to tax-exempt status reviews, these government actions are reshaping the nonprofit landscape.
Here is this week's curated list of recent U.S. federal government actions that may significantly impact nonprofits:
President Trump signed an executive order directing the Corporation for Public Broadcasting (CPB) to cease funding for NPR and PBS, citing concerns over biased reporting. A President cannot lawfully do this, and CPB, a nonprofit entity established by Congress, argues that the order is unlawful and has initiated legal action. This move threatens the financial stability of public media, particularly in rural and underserved communities.
The Trump administration is exploring ways to challenge the tax-exempt status of certain nonprofit organizations. The IRS, under new leadership, is reviewing rules governing tax exemptions, potentially affecting institutions like Harvard University. This initiative raises concerns about the politicization of tax policy and its impact on nonprofit operations.
The DOJ abruptly canceled more than 350 grants, impacting programs related to gun-violence prevention, addiction treatment, and victim advocacy. Organizations such as Activating Change and Impact Justice have faced layoffs and program closures, raising concerns about the administration's shift in priorities.
The National Council of Nonprofits noted that regardless of what happens now, any new budget adopted by this Congress spells disaster for nonprofits. The Trump administration's FY2026 budget proposal includes significant cuts to domestic programs, affecting rental assistance, affordable housing, and community services. Nonprofits are preparing for potential reductions in funding that could impact their ability to serve communities. That is why while recent funding cuts are brutal, they pale by comparison to what is slated to happen on October 1 -- assuming this Congress can pass a budget.
In response to recent federal actions, a coalition of unions, nonprofit groups, and local governments has filed a massive legal challenge in federal court in California against what they describe as an unconstitutional reorganization of the federal government.
Tens of thousands of people participated in over 1000 protests occurring in every state on May 1. These protests need to occur with greater regularity, and nonprofits need to get more involved in them, but they are many steps in the right direction.
In a decision that is likely to be cited by every other law firm under attack by the Trump Administration, Judge Beryl Howell in Washington D.C. issued a scathing order late Friday holding unconstitutional the Trump Administration's Executive Order purporting to penalize the law firm of Perkins Coie for its past advocacy of positions Donald Trump dislikes. Her opening lines set the tone:
“No American President has ever before issued executive orders like the one at issue in this lawsuit targeting a prominent law firm with adverse actions to be executed by all Executive branch agencies but, in purpose and effect, this action draws from a playbook as old as Shakespeare, who penned the phrase: ‘The first thing we do, let’s kill all the lawyers.’”