Gov. Affairs | Issue 29 | May 21, 2026
Published May 21, 2026 - This content will be updated as developments unfold.
Good News:
Federal Judge Rules to Restore National Endowment of the Humanities Funding In Historic Case - AHA
On May 7, 2026, U.S. District Judge Colleen McMahon issued a landmark ruling declaring that the mass termination of more than 1,400 National Endowment for the Humanities (NEH) grants was unlawful, unconstitutional, and without legal effect. The decision granted a summary judgment on all counts in favor of the plaintiffs—the American Historical Association, the American Council of Learned Societies, and the Modern Language Association. The court found that the April 2025 cancellations, which disrupted over $100 million in previously awarded funding for scholars, research institutions, and museums across all fifty states, violated both the First Amendment and the equal protection component of the Fifth Amendment. Furthermore, the judge ruled that the Department of Government Efficiency (DOGE) lacked the statutory authority to override Congress, criticizing its use of an AI-driven screening process to target humanities projects based on ideological and viewpoint-discriminatory criteria. While the administration has expressed plans to appeal the decision, the plaintiff organizations celebrated the ruling as a vital victory for academic freedom, democratic funding processes, and public engagement with the arts and humanities.
Read: DOGE’s Termination of Humanities Grants Is Ruled Unconstitutional - NY Times (unlocked)
Supreme Court Rules on Nonprofit Donor Disclosure - National Council of Nonprofits
The U.S. Supreme Court unanimously ruled on April 29 in the case of First Choice Women's Resource Centers, Inc. v. Davenport, reaffirming the First Amendment rights of nonprofits when faced with state orders to compel donor disclosure. The court held that the state of New Jersey must meet a heightened level of scrutiny under the First Amendment to compel the nonprofit to produce a list of its donors. The court also agreed that the clinic has standing to bring its lawsuit, noting that the injury to the plaintiff occurred at the time when the state demanded the disclosure of its donors. Justice Gorsuch, writing for the 9-0 Court, noted that First Choice did not have to wait for the state to prosecute them before filing suit. Instead, the organization can challenge the state’s actions in federal court if it faces “a credible threat of enforcement,” as articulated in the 2014 opinion in Susan B. Anthony List v. Driehaus. The Supreme Court remanded the case to the district court.
Read: ACLU Celebrates SCOTUS Decision Protecting Organizations from Speech-Chilling State Subpoenas - ACLU
Latest Developments:
Trump administration’s indictment of the Southern Poverty Law Center breaks with norms – and may lack evidence of criminal wrongdoing - Nonprofit Quarterly
In April 2026, the Department of Justice indicted the Southern Poverty Law Center (SPLC) on federal fraud charges, alleging that the civil rights organization defrauded its contributors by secretly paying over $3 million to undercover informants inside white supremacist groups. The government contends that these payouts effectively supported extremist operations and contradicted the nonprofit's mission to dismantle white supremacy. However, the prosecution breaks sharply from established legal norms, as federal authorities rarely intervene in charity regulation when no government funding is involved and no specific donors have filed complaints. Securing a conviction requires proving that the SPLC intentionally deceived its contributors and knew the funds would support criminal acts, but the indictment currently lacks clear evidence of criminal wrongdoing, citing only constitutionally protected activities such as fundraising and racist postings. This case marks a significant escalation in broader federal efforts to target, defund, and delegitimize progressive advocacy groups.
Subsequent to the indictment, there have been significant developments involving large DAF (donor advised fund) holders, Fidelity, Vanguard & Schwab:
Fidelity and Vanguard Won’t Allow Donations to Southern Poverty Law Center - NY Times (unlocked)
Schwab Affiliate Halts Customer Donations to Southern Poverty Law Center - NY Times (unlocked)
After an outpouring of concern, Fidelity shared their reasoning in an article in The Chronicle of Philanthropy, Fidelity claimed they reserved the right to decline granting to an organization when “the organization is being investigated for alleged illegal activities or non-charitable activities, such as terrorism, money laundering, hate crimes, or fraud.”
In response, Community-Centric Fundraising issued a statement questioning Fidelity’s reasoning. They asked why Fidelity has chosen to uphold this policy when they previously were, according to an article in The Chronicles of Philanthropy, among the biggest donors to hate groups the SPLC exposed, granting $4.6 million to 23 groups without such reservation. Also included in the statement was a letter of support for Southern Poverty Law Center (which you may co-sign).
This story continues to develop and has wide-ranging implications. We will continue to monitor for updates.
Spotlight on Georgia:
Here are all the bills Gov. Kemp vetoed from this year’s legislative session - Atlanta News First
On Tuesday, May 12th, Georgia Governor, Brian Kemp vetoed 12 bills that had passed out of legislation. Of note for nonprofits were:
HB 376, which would have increased tax credits for historic properties.
HB 1077 would have extended sunsetting tax exemptions for certain fine arts performances and museum exhibitions.
SB 478 would have increased the percentage of sales tax revenue from transactions involving outdoor recreation equipment for the Georgia Outdoor Stewardship Trust Fund from 40 to 60%.
