Monthly Archives: March 2017

The Trump effect on nonprofits

Donald Trump’s election as President of the United States revealed and deepened social schisms. While many experts are pessimistic about the Trump effect on nonprofits, there’s no consensus here, either – 2017 might be a shameful disaster or it might make American nonprofits great again.

In part, the full Trump effect on nonprofits is difficult to predict because it requires parsing through a multitude of campaign promises, many made off the cuff, rather than consulting the President’s past political record. A few months in it already appears that even some of his most well-articulated promises might be impossible to keep. The gleeful wholesale dismantling of the Affordable Care Act is on hold for possibly forever. The convergence of President Trump’s policies with cuts in state spending and the recent trend of private foundations becoming stingier and more selective with their grants also makes it tricky to gauge precisely how much nonprofit turbulence can be attributed to the White House.

 

Much trickier than this Donald Trump Rubik’s Cube.

 

Optimists predict a rise in charitable giving as wealthy individuals are treated to more favorable tax policies under Trump. Tax reductions coupled with the proposed elimination of the estate tax could free up billions for charitable support each year.

For most critics, on the other hand, the most salient fact is that Trump’s rhetoric and record so far disproportionately target the poor and other vulnerable populations. They caution that nonprofits will never be able to make up the shortfall in government support, although many will strain their resources and infrastructure to the limits trying. These pessimists predict, at best, a decline in the quality of services offered, while the Trump effect on less fiscally sound organizations will threaten their very survival.

The most potentially catastrophic move would go far beyond even those fears by fundamentally altering the function of nonprofits in society. This would be the rumored repeal of the 1954 Johnson Amendment that prohibits nonprofits from endorsing or opposing political candidates. Should it be enacted, tax-deductible donations would start going towards politics and away from providing services to those in need.

As of March 2017, it’s still too early to tell if hopes for a positive Trump effect on nonprofits will be realized or if the most horrifying fears will come true. Many nonprofits wrote their budgets in the last few months sitting in the dark, not knowing what government funding will look like when the federal fiscal years begins in October or which new laws will be passed by then. Our advice to nonprofit leaders is to seize this moment of uncertainty to build momentum for themselves and their clients. We now know that there’s great concern for vulnerable populations out there. Young people who may not previously have cared about Native American rights or uninsured seniors or even known what the NIH does are calling their friends to attention on Facebook and other platforms. It will be the task of nonprofits to turn their motivation into concrete action.

 

Getting people to care about people in need is step 1.