Government Affairs Digest: What Nonprofits Need to Know (Part 15)

May 14, 2025 - This content will be updated as developments unfold.

Latest Developments:

May 1: President Trump issued Executive Order “Ending Taxpayer Subsidization of Biased Media”, calling for an end to federal funding the National Public Radio (NPR) and the Public Broadcasting Service (PBS) receive through the Corporation for Public Broadcasting.

Read: Ending Taxpayer Subsidization Of Biased Media - The White House

NPR and PBS push back against Trump’s order to cut funding: ‘This could be devastating’ - The Guardian

A brief history of NPR funding - Planet Money

May 2: President Trump released his FY26 budget proposal, which includes plans to eliminate the National Endowment for the Arts (NEA), the National Endowment for the Humanities (NEH), and the Institute of Museum and Library Services (IMLS). While similar proposals have been made by the White House in past years, strong bipartisan support in Congress has consistently protected these cultural agencies.

That evening, the National Endowment for the Arts began sending funding cancellation notices to organizations across the country.

On May 5th, all discipline directors at the NEA announced their decision to select deferred resignation, stepping down by the end of May 2025.

Read: Protecting the NEA: Statement from Americans for the Arts CEO, Erin Harkey - AFTA

Amid Trump Cuts, Officials Resign From the National Endowment for the Arts - The New York Times

May 12: The House Ways and Means Committee released its draft tax legislation, which is the core of a major tax reconciliation package that Republicans hope to enact by summer. The draft tax bill includes many provisions which, if enacted, could have a significant impact on nonprofit organizations nationwide and the people they serve.

Language added Monday to the bill would allow for terminating the tax-exempt status of groups the administration deems “terrorist supporting organizations.” The language mirrors a bill from the last Congress that passed in the House but did not pass the Senate. The definition and criteria for determining whether or how an organization supports terrorism are unclear.

The bill also calls for increasing taxes on investment income at the nation’s foundations and universities. The excise tax on endowment income at foundations would stay at 1.39 percent for foundations with $50 million in assets or less, but it would double — to 2.78 percent — for foundations with assets of $50 million to $250 million. Foundations with assets of $250 million to $5 billion would pay 5 percent, and foundations with $5 billion or more would pay 10 percent.

The National Council of Foundations, National Council of Nonprofits, and the more conservative Philanthropy Roundtable oppose the language.

Read: House Republicans Look to Help Trump Strip Tax-Exempt Status of Nonprofits He Says Support Terrorism - Chronicle of Philanthropy

Tax Bill Takes Shot at the Largest Foundations and Universities - Chronicle of Philanthropy

Statement from Diane Yentel, President & CEO of the National Council of Nonprofits, Denouncing House GOP Tax Bill Targeting Nonprofits - National Council of Nonprofits

May 14: After more than 17 hours of debate, the House Ways and Means Committee voted this morning to approve draft tax legislation in a party-line 26-19 vote. The draft will now move to the chamber’s Budget Committee. Lawmakers there will combine it with spending-cut legislation produced by other committees in preparation for floor action. Lawmakers aim to push the bill through the entire chamber by Memorial Day, with Senate action to follow.

Read: House panel advances tax portion of Trump agenda bill after marathon meeting - The Hill

House tax writers advance GOP bill after marathon, contentious hearing - POLITICO

Take Action:

• Nonprofits Under Threat: What’s in the House Tax Bill and How You Can Help (National Council of Nonprofits)

• Fast Action - Tell Congress to Oppose the Charity Killer Provision! (Defending Rights and Dissent)

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Good News:

• Helen Frankenthaler and Andy Warhol Foundations Will Fund 80 Arts Projects Hit by NEA Cuts (artnet)

• America’s Humanities Councils Get a Lifeline (Mellon Foundation)

• Salt Lake City and Boise make pride flags official city emblems, skirting flag ban laws (AP News)

• Illinois returns stolen land to Prairie Band Potawatomi Nation (AP News)

Resources:

• NCN Communications Guide National Council of Nonprofits and Avoq have created this simple communications guide with clear, compelling messages about the work and importance of nonprofits, and tips for conveying them.

• Building Resilience: 7 Strategies for Nonprofits Navigating Uncertainty (Constructive)

• What Recipients Need to Know if a Federal Grant Is Terminated by the Government (Holland & Knight)

• Funding Changes Resource Library (Arts Capital | Atlanta)