What does a Donald Trump administration mean for the nonprofit sector? The answer to that question likely will crystallize in the coming months as transition teams put together the first Republican White House in eight years after the real estate magnate and former reality star upended Democrat Hillary Clinton in Tuesday’s election to win the presidency.
As of this morning, Republicans also are projected to keep majorities in the House of Representatives (235-191) and the U.S. Senate (51-47). Despite one party controlling the legislative and executive branches, Tim Delaney excepts gridlock to continue at the federal level. “Certainly there are different players and different roles but a lot seems to be baked into the system at this point,” said Delaney, president and CEO of the National Council of Nonprofits. Divisions within both the Republican and Democratic parties will continue to push policy work to the state level “where so much has been happening,” he said.
There will be greater clarity in the coming months as the transition teams take time to put together a new executive branch. “The bottom line is, this is going to drive more policy work to the states,” Delaney said, although that won’t mean there won’t be any changes in federal policy.
Sequestration is one of the most pressing issues, he said. Shifts in federal priorities such as increased defense spending likely mean cuts to domestic spending. That normally means nonprofits and foundations have to pick up the slack, he said, “which we’ve been asked to pick up since the Great Recession started. There’s not much more room to pick up.”
Trump also promised to dismantle Obamacare and various executive orders. And while new overtime regulations still will go into effect in December, “trying to undo that will lead to a variety of legislative if not legal battles,” Delaney said.
As a candidate, the Republican talked about repealing the Johnson Amendment, which limits what nonprofits can do in elections and prohibits directly endorsing candidates. That could lead to the politicization of nonprofits, “which many of us believe would be a very bad thing. Nonprofits currently must remain nonpartisan, it’s part of the core of what we are: Neutral problem solvers, not people taking partisan positions,” he said.
Tax reform is expected to be among the first priorities for a Trump administration.
Dean Zerbe, national managing director of tax consulting firm Alliantgroup and former senior counsel to the Senate Finance Committee, expects a major tax reform package within the first year of the Trump presidency, concentrated on slashing tax rates to boost jobs and economic growth. He doesn’t expect reform to immediately tackle much in the way of charitable proposals or incentives, like a George W. Bush did.
Congress is likely to keep the legislation fairly straightforward to be able to get it passed quicker, meaning a reconciliation vote in several months. “That would be my best read: not expect much good, bad or indifferent regarding charity and charitable giving to show up in a big tax bill,” Zerbe said.
Other provisions that might affect the estate tax or donor-advised funds are more concepts at this point and could serve as a distraction, he said.
“The individuals and organizations that make up the charitable community will, as they always have, work toward rebuilding trust among communities, restoring faith in government, resolving our nation’s more intractable problems, and reigniting the American spirit of innovation and progress for all,” Independent Sector (IS) President and CEO Daniel Cardinali said in a statement.
“In spite of a divisive and contentious election cycle, the charitable community is poised and ready to help heal divides and unite Americans in partnership with our elected officials,” he said, encouraging individuals and organizations to learn more about how they can engaged with elected officials at all levels to shape public policy and improve communities. “By addressing challenges and seizing opportunities at the community level, the charitable sector maximizes its impact and strengthens the common good for the nation as a whole.,” Cardinali said.
“For many, this election marks the end of a long-fought process to decide our leaders. But for the charitable community, it’s just the beginning of relationships we need to help us achieve our missions, improve lives and the natural world, and strengthen our democracy,” he said.
“The heart of the future of our work is the notion of community building,” he said. There is a strong desire to engage with the incoming administration, Cardinali said. Polling data acquired six months ago by Independent Sector showed a clear bipartisan interest to have a voice in the next administration regardless of whether it leaned left or right. Strong subsectors with very specific goals exist throughout the nonprofit community, Cardinali noted, and Independent Sector’s role will essentially be to support a thoughtful and unified voice, promote connections between the sector and administration and get out of the way.
“We take that role very seriously,” Cardinali said. “There is an opportunity for us in the social sector to represent the full range of government. That wouldn’t change with whoever is in the White House,” he said.
At the state level, there were more than 150 ballot measures ranging from increasing the minimum wage to allowing for medicinal or recreational use of marijuana. There were races for attorney general in 10 states, six of which were held by Democrats and four by Republicans. Incumbents were not seeking re-election in four states: Missouri, North Carolina, Pennsylvania and Indiana.
In California, Attorney General Kamala Harris easily defeated Rep. Loretta Sanchez, garnering 67 percent of the vote. She will succeed the retiring Barbara Boxer in the Senate. The seat was solidly Democratic but was the first election to use the state’s top-two primary system. Under Harris, the attorney general’s office in California has spurred litigation against its requirement that nonprofits disclose Schedule B donor information to state charity officials.
Harris was the first black woman elected attorney general in California in 2010, winning re-election in 2014. She will become the second black female elected to the U.S. Senate.
The Humane Society of the United States (HSUS) was active in three state ballot questions. In Massachusetts, voters approved a measure to ban extreme confinement of farm animals and restrict the sale of animal products that come from confinement. HSUS also fought a measure in Oklahoma that it said would prevent future regulations on agriculture, including humane treatment standards. In Oregon, HSUS supported a state policy to restrict wildlife trafficking and ban the trade in body parts of 12 species of “imperiled” animals.