Gov. Affairs | Issue 24 | December 18, 2025
Updated December 18, 2025 - This content will be updated as developments unfold.
Latest Developments:
At a Glance: The Case Challenging the Johnson Amendment
A federal district court in Dallas, Texas held oral arguments on November 25, 2025, in National Religious Broadcasters v. IRS, which is asking the court to approve a consent decree that would exempt two churches from enforcement of the Johnson Amendment.
The judge did not issue a final decision at the hearing. Instead, he asked the parties (including Americans United for Separation of Church and State, which intervened to defend the law) to file supplemental briefs on legal questions about constitutional issues and procedural concerns. A final ruling is expected in the coming weeks or possibly early 2026.
What the Johnson Amendment Does
Enacted in 1954, the Johnson Amendment prohibits 501(c)(3) charitable organizations, including churches, foundations, and nonprofits, from:
endorsing or opposing political candidates,
contributing to campaigns, or
using their charitable resources for partisan electioneering.
It does not restrict issue advocacy or speaking on social, moral, or political topics. Its purpose is to protect nonprofits from political pressure, maintain public trust, and ensure that tax-deductible dollars support charitable work, not partisan campaigns.
What the Proposed Settlement Would Mean
If the court approves the settlement:
The IRS would be barred from enforcing the Johnson Amendment against churches.
Churches, unlike other nonprofits, would be able to engage in partisan political activity while retaining tax-exempt status.
Because churches are exempt from financial disclosure requirements (unlike other 501(c)(3)s), political spending could flow through churches without public transparency.
Legal experts warn this could turn churches into tax-advantaged vehicles for political spending, with no reporting requirements and no oversight.
Why This Case Matters
It would undermine a 70-year bipartisan safeguard that keeps charitable organizations nonpartisan.
It could expose nonprofits to political pressure from donors, candidates, or elected officials.
It risks reducing public trust in the charitable sector by blurring the line between charitable work and electoral politics.
It may open the door for other nonprofits to seek similar exemptions, weakening the entire regulatory framework governing 501(c)(3)s.
Sector Response
The National Council of Nonprofits, Americans United for Separation of Church and State, and bipartisan members of Congress have urged the IRS to withdraw the settlement and defend the Johnson Amendment, arguing that only Congress, not an agency settlement, can change federal law.
Read: Federal Court to Decide on Legal Settlement Impacting 70-Year-Old Federal Law Protecting Nonprofits (National Council of Nonprofits)
Trump Accounts
Trump Accounts are new tax-advantaged savings accounts launching in 2025 that let parents set aside money for a wide range of child-related expenses, including childcare, education, healthcare, and enrichment. Contributions are tax-deductible and withdrawals for eligible expenses are tax-free, making them similar to a more flexible 529 or HSA. Supporters say the accounts help families manage rising costs, while critics note they primarily benefit households with disposable income and may widen existing inequities.
Organizations that provide youth programs, camps, or enrichment may see more questions about whether payments qualify, while donors may shift some giving toward family savings rather than charitable contributions.
Read: How Trump accounts for kids will work and more key details following Dell donation (CBS News)
Trump Accounts Explainer (National Council of Nonprofits)
About that Big Dell Gift (Inside Philanthropy)
Good News:
A New Bipartisan Philanthropy Caucus
A new bipartisan Philanthropy Caucus is taking shape in Congress, signaling growing recognition that charitable giving is a critical part of local community health, and that national policy plays a real role in whether nonprofits can thrive. The caucus aims to advance policies that strengthen the charitable sector, expand giving incentives, and support organizations serving on the front lines. For nonprofits, this is a reminder that advocacy matters: the rules shaping philanthropy aren’t fixed, and sector voices are essential in making sure future policy boosts, not burdens, community investment.
