01/24/2025
from our partners at the NC Center for Nonprofits
Several Executive Orders from President Trump Could Affect Nonprofits
Shortly after his inauguration on Monday, President Donald Trump signed dozens of Executive Orders on a wide range of issues. Several of these Executive Orders have implications for charitable nonprofits. These include:
• Diversity, Equity, and Inclusion: An Executive Order issued on Tuesday will require every federal grant and contract to certify that it complies with federal anti-discrimination laws, including other new Executive Orders that broadly prohibit any diversity, equity, and inclusion (DEI) programs in the federal government. The Center’s initial analysis of this Executive Order is that it should only apply to future federal grants and contracts and not require federal agencies to amend the terms of existing grant agreements, contracts, and cooperative agreements. It is possible that the Trump Administration could amend or clarify the language of the Executive Order to make it retroactive. Of course, it is also possible (perhaps “extremely likely” is the more appropriate adjective) that it will be challenged in federal courts since a similar but narrower Executive Order limiting DEI training programs for federal contractors (but not grantees) was struck down by a federal court in 2017. The Executive Order also discourages private sector (including nonprofit) DEI programs, directs the U.S. Justice Department to come up with a plan to combat DEI programs in the private sector, and requires federal agencies to identify corporations, large nonprofits, and foundations with DEI programs that the Administration deems inconsistent with federal anti-discrimination policies. It is unclear what legal authority the White House would have to prohibit or limit private sector DEI initiatives without congressional authorization.
• Federal Government Grants and Contracts: In addition to the Executive Orders addressing DEI programs, several Executive Orders make significant changes to the structure of the federal government that could have implications for nonprofits with federal grants and contracts. Among other things, these executive orders would:
1. Implement a federal hiring freeze, which could cause delays in payments and processing of federal grants and contracts;
2. Eliminate the White House Office of Faith-Based and Neighborhood Partnerships, which has fostered partnerships between nonprofits and the federal government;
3. End a federal rule that prohibits federal government gifts from lobbyists, which could put nonpartisan nonprofits at a disadvantage in the federal contracting process; and
4. Establish a Department of Government Efficiency (DOGE), which could propose changes (which could be beneficial or harmful) to federal contracting and technology practices.
• Other Executive Orders: A variety of Executive Orders will create restrictions on federal funding of, and revocations of policy protections important to, nonprofits serving immigrant populations, LGBTQ+ communities, and the environment.
The National Council of Nonprofits has an excellent and comprehensive analysis of the potential impact of these Executive Orders on charitable nonprofits. Many of these new Executive Orders are likely to be challenged in federal court in the near future. The Center will keep you posted on the legal status of these Executive Orders and on other forthcoming executive actions that could impact the nonprofit sector.
