Cuts, threats, and maybe some push-back?
This is a relatively short update—not because there was no news to report relating to the impacts of federal policy changes on nonprofits and their beneficiaries, but because the news stories over the past seven days were almost mind-numbingly repetitive and negative. While I report mostly bad news below, there are glimmers of reaction on the horizon.
The Wave Is Hitting Nonprofits
This week was filled with reports of social service organizations and other nonprofits feeling the negative effects of Trump funding cuts. The cuts are causing shockwaves, anxiety, chaos and confusion, layoffs, and the raising of alarm bells. In other words, the wave is beginning to roll. So many stories like these were reported that one gets the sense that journalists are running out of ways to report on this unmitigated disaster. I could have filled this report with literally hundreds of stories like this. I couldn’t do that to you, reader—or to myself.
The Tariffs Harm Almost All of Us, Including Nonprofits and Their Beneficiaries
Most of the news about the Trump Administration this week focused on his catastrophic decision to impose tariffs on scores of U.S. trading partners. The decision roiled the financial markets, pushing the Nasdaq Index into bear-market territory and making an increasing number of analysts believe the decision could push us into a recession. This is bad news for nonprofits on a number of grounds.
First, while we can engage in schadenfreude about the fact that the 500 richest people in the world had lost $485 billion over two days, the simple fact is that they don’t need the money. During the same period, the markets have lost $5 trillion, meaning that the rest of us lost 90% of the wealth that vanished over the last two days. While there is no sustained causal relationship between donations and market conditions, giving does tend to get stingier as markets fall, and recessions definitely reduce charitable donations.
Likewise, the poor are impacted more by rising prices. While tariffs hit the prices of imported goods directly, they also impact the prices of domestic goods that use imported materials. Thus, tariffs tend to push all prices higher. But because lower-income people tend to spend a greater portion of their income on everyday consumer products, they feel the bite more acutely. According to an NBC news story, “For the lowest-income households, they could see a 4% reduction in their after-tax income from the tariffs, the report estimated—three times greater than the impact on higher-income households.”
As we watch this unforced error unfold, consider that Republicans in Congress could “stop the new tariffs cold” if they wanted to. The problem? They don’t want to cross “a President who leads a vindictive movement.”
Supreme Court Grants Trump Administration Permission to Continue to Withhold Education Funds During Legal Proceedings
Because most bad things tend to happen on Fridays in Washington D.C., we should not be surprised that the Supreme Court on Friday granted the Trump Administration a stay of a trial court order that had temporarily halted his Department of Education’s decision to terminate millions of dollars in funding for two grant programs targeting teacher shortages for “‘high need’ institutions, nonprofits, Historically Black Colleges and Universities, and Tribally Controlled Colleges and Universities.” The grants had been terminated on the grounds that the programs at issue ostensibly violated federal civil rights laws using the Administration’s simple formula that equates all DEI efforts with unlawful discrimination. A lower court in Massachusetts had issued a restraining order to continue the funding during litigation, but the Supreme Court negated that decision.
Brown and Harvard Universities See $9.5 Billion Frozen Over DEI Initiatives; Princeton Also Faces Loss of $455 Million
The Trump administration has withheld over $500 million in federal funding from Brown University and threatened Harvard University with the loss of $9 billion unless they eliminate diversity, equity, and inclusion (DEI) programs and curb student protests. This crackdown reflects a broader effort to suppress dissent and exert control over academic institutions, potentially impacting nonprofits affiliated with these universities. As a Harvard alum, I hope that institution does the right thing and stands firm against the encroachment.
Princeton was also threatened with cuts. Princeton’s president, however, has shown some signs that Princeton may take a stand.
The Importance of NOT Being Obama
Consider President Obama’s point during a speech on Thursday: “Imagine if I had done any of this.”
People Power Begins
Nationwide protests against the federal changes since January 20, 2025 have begun, starting today. It is time to be heard with respect to the “most brazen power grab in modern history.”
My Adopted Home State Pushes Back on the Red Wave
Although this is not directly nonprofit news, I just wanted to end on a positive note. Wisconsin voters’ decided to elect a new Supreme Court judge who will keep a 4-3 balance in favor of liberals on that Court. This is a huge win. Wisconsin went for Trump in November, and $90 million was spent on this single race—more than the than “the entire United Kingdom national election.” Many paint the race as a referendum on Elon Musk, who spent $25 million of his own money on the losing side, and I don’t doubt personal distaste for the man played a role in many votes. But Wisconsin farmers have already begun to feel the effects of losing farm-to-table grants, and Wisconsin nonprofits and their beneficiaries are reeling like those in other states.
Conservatives held a majority on the Wisconsin Supreme Court for 15 years, until Judge Janet Protasiewicz was elected to the bench in April 2023. Conservatives maintained that her election was an anomaly, and the balance would shift back when the next judge retired. That story sounded quite plausible, since Wisconsin had just voted to elect Donald Trump president for a second time. This bellwether state, however, belied that narrative. If we Sconnies can retreat from the brink, so can other voters.