Introduction to the Crisis
Nonprofit organizations across the nation and in New York are gearing up amid threats from the Trump administration. Groups are on high alert as rumors fly about the administration possibly revoking their tax-exempt status or investigating them for illegal actions or noncompliance with executive orders.
The State of Uncertainty
“We’re all hearing about these executive orders that are supposed to come out but honestly have no idea about when and what they’ll target,” said Michelle Jackson, executive director of the Human Services Council. “We’ve heard climate and democracy as kind of the focus, and that creates real fear amongst all types of nonprofits.” Climate nonprofits are preparing for a possible executive order targeting their tax exempt status that could come down on Earth Day, according to multiple reports. Several national and local environmental nonprofit groups declined to comment or did not respond when THE CITY reached out.
Targeting Climate and Environmental Programs
The Trump administration has targeted climate and environmental programs, and the president signed an executive order to end programs that fall under “DEI,” including environmental justice efforts. Environmental justice focuses on often nonwhite communities that are disproportionately vulnerable to climate change and pollution.
Preparing for the Worst
Attorney General Letitia James’ office is hosting a webinar next Monday to offer guidance and equip nonprofits ahead of any federal moves. So far, over 1,000 groups have signed up for the event. “The Trump administration’s threats against nonprofit organizations have had a chilling effect throughout New York and nationwide. We are already seeing the real impact of these harmful policies,” James said in a statement. “My office is fighting back against these reckless cuts in court, and we are committed to ensuring nonprofits receive the funding necessary to protect the New Yorkers they serve.”
The Impact on Nonprofit Budgets
Nonprofit budgets have been at risk as the administration has cancelled or frozen grant money across a slew of programs. The attorneys general of several states, including James in New York, as well as nonprofits, filed lawsuits to fight back against those federal actions. James’ call will follow a similar virtual briefing for nonprofits nationwide that took place on Friday, hosted by the American Civil Liberties Union and Public Citizen.
Collective Action Against the Threats
THE CITY obtained a recording of that call, which maxed out at 5,000 attendees as more tried to join. The briefing touched on preparing for any incoming attacks on the nonprofit sector with collective action and to defend individual organizations that may be at risk. After the call, the groups circulated a solidarity letter condemning Trump’s targeting of nonprofits, which nearly 600 organizations signed onto as of Monday mid-day, based on a document THE CITY reviewed. “Efforts by the president of the United States to defund, discredit, and dismantle nonprofit groups he disagrees with are reprehensible and dangerous — a violation of a fundamental freedom in America,” the letter states.
Signs of What’s Coming
Many nonprofits interpreted the targeting of Harvard University and the Vera Institute of Justice, both nonprofit institutions, by the Trump administration and Elon Musk’s proto-governmental Department of Government Efficiency as signs of what’s coming. Trump threatened to yank Harvard University’s tax-exempt status and about $1 billion in research funding after the university declined to meet the administration’s demands for eliminating DEI programs and instituting mask bans at protests, among others. Trump on Thursday called tax-exempt status “a privilege” that’s “been abused by a lot more than Harvard.”
The Mechanics of Tax-Exempt! Status
While states determine non-profit status, those groups generally apply for tax-exempt status with the Internal Revenue Service. The status allows groups to skirt certain taxes while those who donate to them qualify for a tax deduction. The Trump administration could try to change IRS rules to eliminate climate change as a qualifying topic for tax-exempt organizations. In New York, charitable nonprofits, which generally qualify for tax-exempt status, are required to have a purpose that is charitable, educational, religious, scientific, literary, cultural, or involves the prevention of cruelty to children or animals. (THE CITY is itself a nonprofit).
The Broader Implications
Nonprofit organizations were also spooked after DOGE tried to assign a team to the Vera Institute of Justice, a criminal justice nonprofit, because it received federal funds. Vera’s staff said DOGE indicated it sought to do the same for all nonprofits that received Congressionally appropriated funds. “While we are the first to be targeted in this way, we know that we will not be the last,” Vera posted on social media. While DOGE was conceived as an effort to cut waste, fraud and abuse within the federal government, it quickly sprawled to become an all-purpose instrument of control. It’s tried to embed its staff within NeighborWorks America, a nonprofit for affordable housing and community development, and Transportation Secretary Sean Duffy suggested DOGE could also audit New York’s Metropolitan Transportation Authority.
The Stress on the Nonprofit Sector
Nonprofits across the country and locally have been feeling the squeeze of funding cuts and uncertainty about the future as they have attempted to meet growing needs, even before the Trump administration came to power, said Megan Allen, CEO of the New York Council of Nonprofits. “This federal impact is making the stress on our sector even worse,” she said. “We were stressed as a sector before this. We were already starting to see more nonprofits needing to dissolve. Every time that happens, that means there’s fewer services and support for communities all over.”
Conclusion
The threats from the Trump administration have sent a wave of fear through the nonprofit sector, with many organizations preparing for the worst. The potential revocation of tax-exempt status, investigations, and funding cuts have all contributed to a sense of uncertainty and unease. As the situation continues to unfold, it is clear that the nonprofit sector will need to come together to defend itself against these threats and ensure that it can continue to provide essential services to communities in need.
FAQs
Q: What is the Trump administration threatening to do to nonprofits?
A: The Trump administration is threatening to revoke the tax-exempt status of nonprofits, investigate them for illegal actions or noncompliance with executive orders, and cut funding to certain programs.
Q: Which nonprofits are most at risk?
A: Climate and environmental nonprofits, as well as those that focus on democracy and social justice, are considered to be at high risk.
Q: What can nonprofits do to prepare for these threats?
A: Nonprofits can prepare by staying informed about the latest developments, building coalitions with other organizations, and seeking guidance from legal and financial experts.
Q: How can individuals support nonprofits during this time?
A: Individuals can support nonprofits by donating money, volunteering their time, and speaking out against the threats to the nonprofit sector.
Q: What is the potential impact of these threats on communities?
A: The potential impact of these threats on communities could be severe, with many nonprofits providing essential services such as food, housing, and healthcare. If these organizations are forced to dissolve or significantly reduce their services, it could have a devastating impact on the communities they serve.
