In this TALKS, we discuss the critical issues affecting philanthropy as the next administration takes office. Topics covered include endowment taxes, the implications of the Fearless Fund lawsuit, new laws governing Donor-Advised Funds (DAFs), and the rescinding of tax-exempt statuses, as well as other key issues shaping the sector. The webinar features expert insights, analysis of the evolving landscape, and actionable guidance to help organizations prepare for what’s ahead.

KEY LEARNING OBJECTIVES:

• Understand the impact of the new administration on the philanthropic landscape.
• Explore strategies to remain resilient and adapt for success.
• Discover innovative fundraising tactics to retain and engage donors.

WHO SHOULD WATCH:

• Nonprofit executives.
• Board members.
• Fundraising professionals seeking guidance on how to navigate shifts in the economy, policy, and philanthropy.

FEATURED SPEAKERS:

Shannon McCracken, Chief Executive Officer, The Nonprofit Alliance

Shannon is the founding CEO of The Nonprofit Alliance and has been named to The NonProfit Times Power & Influence Top 50 for the last three years. She spent two years as Charity Navigator’s Chief Development Officer, facilitating communication with nonprofit organizations and increasing resources to ensure the successful implementation of a new strategic plan, and subsequently served on Charity Navigator’s board of directors.

Shannon spent 17 years with Special Olympics International, most recently as Vice President of Donor Development. While at Special Olympics, she served as the DMA Nonprofit Federation Advisory Council Chair and Chair of the Ethics Committee.

Shannon is a Certified Association Executive with a master’s in Nonprofit and Association Management. She serves on the Fundraising.AI Advisory Council and the Fundraising Effectiveness Project Steering Committee as Government Relations Chair.

CJ Orr, Chief Executive Officer, Orr Group

Having served as a trusted partner to clients for over 10 years, CJ Orr has broad experience in fundraising and development, executive leadership, strategic planning, campaigns, and event management. He has launched funds, designed and led strategic initiatives, and driven fundraising for large galas and campaigns ranging from $10M to $1B+ in revenue. As an expert project and relationship manager, he executes on the development of strategies and tactics to drive effective fundraising plans that meet or exceed targets.

Internally, CJ is responsible for setting and driving achievement of Orr Group’s financial targets and overseeing efficient operations within the firm. Additionally, CJ supports the efforts of Orr Group’s Growth team to identify and cultivate new business opportunities and build relationships with nonprofit partners, ensuring that the services offered are best aligned with our partners’ needs. 

CJ’s background in finance provides him with a strong foundation in analytics, metrics and ROI. Prior to working at Orr Group, CJ worked in Institutional Fixed Income Trading at Alliance Bernstein, where he was responsible for funds trading, account management, and reviewing analytical research. He also spent several years in municipal bonds sales and trading at Oppenheimer & Co.

Stacy Palmer, Chief Executive Officer, The Chronicle of Philanthropy

Stacy Palmer is chief executive of the Chronicle of Philanthropy, and has overseen the organization’s transition as it became an independent nonprofit in April 2023. Palmer helped found the Chronicle in 1988, when it was started by the Chronicle of Higher Education, Inc. She has served as its top editor since 1996. Under Palmer’s leadership the organization has evolved from its roots as a biweekly newspaper for social-sector professionals into an organization that offers a monthly magazine, robust news, advice, and opinion sections, and a host of webinars, briefings, and other services.

In addition, she helped forge a partnership with the Associated Press and the Conversation designed to educate the public about the nonprofit world and to establish a fellowship program to coach local journalists to provide more sustained and sophisticated coverage of nonprofits and foundations.

Palmer has appeared frequently on radio and television to offer commentary on news in the nonprofit world. She is the editor of Challenges for Philanthropy and Nonprofits, a book published by the University Press of New England that collects three decades of observations by the nonprofit activist and Chronicle columnist Pablo Eisenberg. Before she helped found The Chronicle of Philanthropy, Palmer was editor for government and politics at The Chronicle of Higher Education. She was also a longtime member of the Chronicle of Higher Education Inc., leadership team.

Transcript

CJ Orr: Good afternoon, everyone, and welcome to Orr Group's webinar, The New Administration's Impact on the Sector. Today, we’ll discuss what’s happening in and around the White House and what we foresee coming down the pipeline. I want to thank you all for joining us today. We have about 660 people registered, dialing in from around the world. Stacey and Shannon, you are very popular! I can only imagine your birthday parties must have 500 guests! Love it. Well, thank you both for joining us and spending time with us today.

Before we dive into the topic at hand, let’s go over a few administrative items. Here’s the agenda: first, we’ll have an introduction, followed by a quick summary of what’s already come out of the White House or is currently being discussed in legislation. Then we’ll move into our panel discussion, and finally, we’ll wrap up with a Q&A session.

CJ Orr: If you have questions during the presentation, please put them in the chat box. My colleague, Campbell Lake, is working behind the scenes—literally behind this wall—to collect your questions. We’ll go over them in the last 15 minutes of the webinar.

CJ Orr: A quick note: my team is recording this session. They’ve also made it very clear—Shannon, Stacey—no curse words! So we’ll all have to be on our best behavior. No promises, but we’ll see! After this, we’ll send the recording along with a summary to everyone here so you can share it with others.

CJ Orr: One additional, important disclaimer: no one on this call is a licensed attorney, a representative of a government agency, or an official within the Administration. The information shared here is for general purposes only and should definitely not be considered legal or official advice. Can you tell I had my lawyer write that for me?

CJ Orr: Now that we’ve gotten the legal mumbo jumbo out of the way, let’s jump in and have some fun! I’d like to start by introducing our two panelists. I’m thrilled to be joined today by Stacey Palmer, the CEO of The Chronicle of Philanthropy, and Shannon McCracken, the CEO of the Nonprofit Alliance (TNPA for short). Stacey, would you mind starting us off with a quick introduction?

Stacy Palmer: Hi, thank you all for being here. I’m Stacy Palmer, and I helped found The Chronicle of Philanthropy in 1988. We’ve been covering the ups and downs in the federal government and its relationship with the social sector for a long time. I’m delighted to bring some perspective to today’s conversation.

CJ Orr: Amazing. Thank you, Stacy. And Shannon, over to you.

Shannon McCracken: I’m delighted to be joining Stacy and CJ here today. I’m Shannon McCracken, the CEO of the Nonprofit Alliance, which is a trade association for nonprofits and the firms that work with them. I’ve been with TNPA for about seven years, and prior to that, I spent the first 25 years of my career on the fundraising side with large organizations. So I’ve been in those shoes and worn that hat.

CJ Orr: Very nice, thank you both. And for those who don’t know me, I’m CJ Orr, the CEO of Orr Group. Orr Group is a consulting firm that works exclusively with nonprofit organizations to help them grow. We provide strategy, fundraising, HR recruiting, operations, and project management services. We’re a team of 75 professionals, and I’m joined today by several team members who are listening in. Thank you to those joining us. We also know that many of the nonprofits we work with, both in the U.S. and abroad, are here with us today, so thank you for being part of this conversation.

Now that introductions are done, let’s dive into this new administration. What a few weeks it has been! I’ll start by outlining what’s already been shared publicly and then touch on some of the key points being discussed within the sector.

There are two major issues we’ve been hearing a lot about that are front and center with the new administration: DEI (diversity, equity, and inclusion) and government funding. Let’s start with DEI. There have been six official executive orders addressing DEI, but one stands out for its clarity, which includes the following statement:

"I therefore order all executive departments and agencies to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements. I further order all agencies to enforce our longstanding civil rights laws and combat illegal private sector DEI preferences, mandates, policies, programs, and activities."

This language comes directly from the executive order, and I wanted to share it here for context. To summarize, the administration has issued an executive order to terminate many DEI programs within federal agencies. These agencies have also been instructed to identify and recommend investigations into private organizations that implement DEI practices.

The enforcement of this directive—particularly the mention of "private sector activities"—will be interesting to watch as it evolves. A few words in the executive order carry significant weight.

Even before the election, we were seeing pushback against programs or opportunities that some viewed as exclusive to certain groups. We saw this in the Fearless Fund case, in the banning of affirmative action, and in companies pulling back on their DEI commitments. The list of companies reducing or eliminating DEI programs is long—McDonald’s, Nike, Deere, Meta, Target, and others. Given the new administration’s clear stance on DEI, we expect this to have a ripple effect across the nonprofit sector, and I anticipate that some companies will continue pulling back on their charitable giving.

Many nonprofits incorporate a DEI lens into their work, which will make this environment tricky to navigate. We’ll discuss that further in a moment.

The other major aspect of the executive orders involves the freezing of federal funding and grants. The first executive order we saw, issued a few weeks ago, calls for a 90-day pause on foreign aid programs under the directive Reevaluating and Realigning the United States Foreign Aid. Additionally, the Office of Management and Budget (OMB) announced a temporary pause on all activities related to the obligation or disbursement of federal financial assistance. This decision has already been challenged in court, and we’ll touch on that in a moment, but for now, it remains in process.

Beyond DEI and federal spending, other executive orders have focused on climate change, rights, education, and more. We’ll continue monitoring these as they evolve. Outside the scope of executive orders, there’s been plenty of discussion about potential legislative changes. Let me share a few things that The Chronicle has been reporting on to provide some context.

One proposal being discussed is building bipartisan support for the charitable deduction for non-itemizers. This would be great for smaller donors and a helpful development for the sector. There’s also ongoing discussion about removing tax-exempt status for business-like charities, such as hospitals, insurance companies, and universities.

Another topic of interest—championed by J.D. Vance—is the potential taxation of endowment income, particularly for larger universities. Personally, I hope this is just talk, but we’ll see where it leads. There’s also some conversation about bringing back regulations requiring distributions from donor-advised funds (DAFs). Lastly, a law passed a few months ago, HR 9495, allows the IRS to revoke 501(c)(3) status for any organization deemed to be involved in terrorist activities. These are just some of the legislative issues that have been discussed or enacted recently.

Now, let’s circle back to DEI. Stacy, I’ll start with you. Your team has been reporting on this topic for a long time. Many of the folks on this call lead organizations with missions or programs that directly support minority groups or that might fall under what’s broadly referred to as DEI-related work. What general advice would you give to these organizations?

Stacy Palmer: Yeah, this is a really tricky topic at this moment, because we don't have enough information. So, as you said at the beginning, this is one of those ones where you want to talk to a lawyer and help make sure that the wording you use in describing your mission and programs and those kinds of things don't inadvertently run afoul of something that might cause a lawsuit or that kind of thing. Now, many foundations especially, have come out very strongly in response to what the Administration, said. Robert Wood. Johnson Foundation, for example, said, our mission has always been about healthcare, and particularly serving people who have been left out of the healthcare system, and who the system has hurt in various ways. So they're not backing down, and they're coming out with statements to say are going to continue this. This is a really important thing. So even though we see a lot of companies in their philanthropic commitments backing down, there are an equal number, I would say that are also steadfast in it. I think there was a story today that the Nfl is going to make sure that it continues to follow its diversity efforts. So I wouldn't say that everybody is sitting back but thinking carefully, and one of the things that is always smart to do is talk about things with a bit of data. So if your mission is about making sure that children are healthy, and it's a certain cadre of children who maybe fall in the income scale in a certain place or in a certain region that has been left behind. You can talk about things that way, and still probably carry out your mission in various ways. One of the things after the affirmative action decision came out, lawyers suggested that. You know, if let's say you had a scholarship program that was largely designed to benefit Hispanic people, you could say not that you're only looking for Hispanic applicants, but that the cause is about making sure that Hispanic research is done well, and you will probably, in the very instance of putting out that application, be able to attract people. So some of it is just thinking about the wording. I think the part that's tricky for people is that right now we don't have full guidance on what the Administration meant, so I think it's worth asking a bunch of questions. I don't think it means retreating from the mission. It's really how we talk about it and implement it, that we have to be careful about.

CJ Orr: Great advice. Shannon, I go to to you as well with the similar questions, you know. Should, is that the right advice that that the organizations maybe talk about their messaging a little bit different. But don't go change programs or missions. You know, what about maybe an organization that just has a Dei committee. What do they do with that? How deep does this go for for nonprofits?

Shannon McCracken: Excellent questions. Cj. And and Stacy made excellent points as well. I. There's not a 1 size fits. All answer right now. Right? So what I would say is that we know that the law is being read and understood differently than it was a few weeks ago. Even we also know that organizations that have Dei statements and more more to them.

Shannon McCracken: In fact, Dei, commitments and initiatives put those in place not overnight. There was a process, a very deliberate, thoughtful, inclusive process, thinking about who needed to be at the table. What's constructed? What's included in that? What is the communication strategy, both internally and externally, as you were putting those commitments and those initiatives into place and rolling those out. What was the feedback loop for that? What was your process for evolving that policy as your programs changed. If this, if you've had your Dei, if you've been doing Dei work within your organization for more than a couple of years, then you've likely revisited this and evolved it. So, using that same process now calculating or including other factors in your risk assessment with your Dei, looking at what your profile is exactly to the points that Stacy was making, how embedded is the work that you're doing with your mission versus an Internal Staff Culture piece versus how you're talking to your constituents and donors and stakeholders. Look at all those variants. And and I would say, Really, consider the language and terminology you're using because some of the words that you thoughtfully selected, you know, some time ago, a few years ago. It's not that you're backing off of those. But the understanding of the meaning of those words has changed. Words have become politicized, or, or, you know, just used differently, and in everyday conversation. So make sure that terms that you're using still mean today what you intend them to mean as you go forward. And you know, include your council include your head of HR, include your board? Everybody who needs to be at the table in in making these decisions and rolling them out, and your decision may be no change at all, or it may be something more than them.

CJ Orr: Yeah, I actually heard you both say, consult lawyers and our advice, hey, this is this might be a good couple of years for lawyers. So, Stacy we've seen for several months, companies pulling back on their Ddi commitments made over the past few years, and now companies are being sued for funding or providing grants to individuals. One ethnicity like, for example, I was just reading about McDonald's. They got sued by the American Alliance for equal rights. That for their is their hacer national scholarship program which provides scholarships to Hispanic and Latino students. And they've been doing this for 30 years. And so, as a result. What they've done is change their application to be for anyone who's had an impact on the Hispanic or Latino community through their activities and leaderships. So if an organization on this call used to get, or is about to get, into, a renewal conversation with corporate funders, how do you recommend they approach that conversation?

Stacy Palmer: Yeah, I think it's sort of the same thing we were just talking about is to ask, you know, sort of what their values are, and what kinds of things they're using to guide them. And you know really what their objectives are, because there are ways to do some of the kinds of things that people have had longstanding practices. But it's how it's structured. It might be about the selection process criteria and the committee. So there may need to be adjustments. But it may not mean, you know, fully pulling back. Obviously, companies that care deeply about their relationship with the Federal Government, with consumers are thinking about it through that lens you know, and you've seen Costco, for example, be very strong in saying that it is going to continue with its diversity efforts. So it's not that there's, you know, just one approach in corporate America. So it's really looking at the companies that have said, we're sticking to it, and seeking support from them, at least at this moment, I would at least put my all of my activity into those that have declared that they're standing by what they said they were going to do.

CJ Orr: Great. So Shannon, an organization that usually would get money from a corporation. And they're gonna have to look elsewhere. What other avenues for fundraising would you recommend.

Shannon McCracken: I think the same question you'll be able to ask multiple times through as we're talking about the issues today and talking about risks to revenue streams. Right? It's, I think we've all seen many times in the past 2 weeks people talking on Linkedin or in conversations like well, then, there should just go to your donors. You should always have been relying on your individual donors more. And yes, and also we're all aware of the data around declining, giving declining number of households. If it were that easy we would all be doing it. So yes, maybe there's a change in investment that you do put more investment into that, that out of growing your donor relationships and expanding your donor audiences and thinking about how you do that. That's not a light switch funding that you were counting on getting this year is now suddenly not happening for reasons that you're talking about. Then there's a lead up time for that. I think we will start to see coming out of. In the next few months we may start to see some different funding models being tested by organizations partnerships, joint ventures, fee for service programs, perhaps places that organizations have dabbled in or thought about but not really gone there. And just it is time to rethink some of the models and reduce some of our risk from certain places, whether that's corporate giving or federal funding, or any others.

CJ Orr: Yeah. And Shannon, I have you one other quick question. So the Tmpa promotes, protects, and strengthens the nonprofit sector. I think you're in front of the right crowd today. What? What if an organization disagrees with what's happening? What should what can they do to say something, or do something about it.

Shannon McCracken: Yeah, right now, a lot of the work that we're doing and different groups are doing different things. There's a lot of there are a lot of hands and legs and work to go around. The approach that Tnpa is taking right now is working and we work with. We have bipartisan relationships in Congress do a lot of our work on the Hill. We're working particularly with Republican Senators right now, where Republicans have more of the strength and influence, and, you know, really coordinating with them on helping them see some of the risk and some of the threat to nonprofits, to causes they care about within their communities within their States, affecting their constituents and and aligning with them. So you can go onto the Us. Senate page. There are contact pages for every Senator really easy to fill out the form and just share some of the impacts. You're seeing those data point and include data points. By the way, storytelling is lovely, but data points are what will carry the day right now keep it short. 2 or 3 paragraphs does not need to be an essay and really just quantify some of what is happening to your organization, some of what you're struggling with and what the impacts will be. Number of people served programs that are cut employees in their State who will lose their jobs. Those are the factors that will help activate senators around our support.

CJ Orr: Thank you for that advice and thank you for what you're doing. Okay, so let's move on to the second big topic, government funding. So, Stacy, having read through your articles, I think you quoted that 27% nonprofits receive some type of government funding. We've been whiplashed a little bit of what's going on in the news over the past week. No new funding for foreign aid, or now, no funding. And then you have the judge that's blocking this and coming in yesterday. There's news. I'm not going to try to summarize it. I'm actually going to ask you. So what's going on here? What's been the bouncing ball. And then where does that leave us today?

Stacy Palmer: So this is going to be a continuing difficult challenge, no matter what. Each judge will rule something. There'll be some victories. There'll be some setbacks, but this is going to be in play for a while, so I think everybody has to understand that they should really think hard about where their Federal money is coming from. Even though the judge blocked yesterday, said, You know this. Really, this does not hold.This is not a legal approach to doing things. You know. I'm still seeing. Reports that places like head start are not able to get money that they expected to be able to get. So you know, the system itself is not working well, even under the best of circumstances. It's chaotic, it's messy. And everybody should have contingency plans that it's going to stay that way, coming up. You know. There's debt, ceiling debates and all those things. I wouldn't be surprised if we have a government shutdown. There are a lot of things that are just going to put Federal money, you know, up in the air. So you know, I'm thrilled to see actually, nonprofits are leading in a lot of the efforts to have these courthouse battles. They were ready to go. They, you know, they had been preparing for months. They knew this kind of thing was going to happen, and they have had some really incredible court victories. It's also been an advocacy victory, I mean, we all saw, you know, last week, when the Federal funding was threatened, you know, I think every member of Congress was getting inundated with calls about what this means. Every television station was covering. Here's what it means for our community. And that's why you quickly saw a turnaround. But you know, I think it would be foolish to think this is going to evaporate soon. So being prepared and really thinking about what your organization can do without the Federal money if it can, and finding, at least, you know, lines of credit working with the bank, working with your board, working with big donors, and to say, this is going to be a really unsettling time. We need some kind of a reserve fund to help get us through. As we figure out what's going on.

CJ Orr: I think all of those are great advice line of Credit bank for big donors. Reserve fund spot on. Okay, Shannon. Similar question that I asked you previously so, but for government funding related. So if organizations that receive government funding and are now not going to be, or depends on what happens, what can they do if to disagree or fight back, or try to get the money flowing again?

Shannon McCracken: Yeah. Similar, similar answer, really. Same answer that I gave last time, CJ, is focusing that messaging. And it's important that our and I mentioned Republican Senators earlier. If you're State or is a Blue State reach out to your Democrat Senators, too. They're all part of this process. There will need to be, you know. I expect there to be some bipartisan effort here, and so, you know, to really do that outreach the other thing I will, I will call out, is! And again putting my old fundraiser hat back on. But starting, I'm starting to see some strong messaging from organizations who are reaching out with appeals to their donors as they're seeing that funding source cut off. And I know I just said easier said than done.

Shannon McCracken: But a couple of points in that one. It is a great time to reach out to donors and funders. Think about the messaging. So the appeal that I saw this morning very strong one, and it specifically said, we lost this fund. Here's funding we lost already. Here's funding, that is, you know on hold right now and potentially at risk of not getting. Here's what this means to us. Here's what we won't be able to do. Will you consider right now, stepping up and making a contribution. I want to call out that there is a large portion of the American public and of our donor public who believe that this country is spending too much money on international relief. For example, now they by and large have a exaggerated sense of how much of the national budget is. The Federal budget is spent on international relief. That belief is too high. The reality is much lower doesn't matter. That is their belief. So think about the messaging that you're using and how much you're really talking about the loss of government funding versus increased need versus some other. The programming that you're trying to do the nonprofit alliance? Did some public polling public survey back at the very end of 2024, and it is not surprising, but we have some data behind it. Donors who already support and believe in and trust an organization are much more supportive of that organization receiving Federal funding than just a broad answer. Do you think nonprofits should receive Federal funds? So the way that you are talking to your existing donors might be different than the way that you're talking to donors who haven't supported you in the past. They may be supportive of other cause areas receiving funding, but maybe haven't bought into yours yet, being that one. So just thinking about audiences, everybody's trying to move rapid fire right now be the 1st ones out there. Get ahead of this for their own their own budgets and their own boards, and just pausing that beat and thinking about how it's going to land, and the familiarity that the general public may have with this issue right now versus you, who are living and breathing it every day.

CJ Orr: Yeah, Stacy, a similar type question for organizations that are losing their government funding. What are the other fundraising avenues that they should go after. Should everyone should be doing emergency fund, or what else should they be thinking about?

Stacy Palmer: I think one of the other important things is, there's obviously the direct loss of funds. So that's about the 27% of groups. But there are many people who benefit from various programs who are also at risk. So in some ways nonprofits have to be the voice of these are the people that we care about in our communities and that we serve and also brace for increased demand. So it's not just that we lost our funding.

Stacy Palmer: But we've got more people coming to our doors and expecting that. And I think that's something. You know. Shannon's right. People don't understand some of these things. They don't know what the numbers are. They've been, you know. They've heard a lot of the political rhetoric, so they don't necessarily know where the money is going and how much of a difference it makes. So constantly using those data points is really important, diversifying fundraising. And Shannon's also right? It's not easy. We've seen a slide in the share of Americans who give. But certainly there's a great interest in making sure that people who are, you know, in need of services. Get them. I think it's a bit more challenging. We're seeing a bit of a pitting between the very elite institutions and local community groups. So really explaining how the money is used will be very helpful thinking about getting board members to match gifts, doing those kinds of things, to make the outreach to be involved. Board members can be so influential. This is just a time where they really need to step up. We did a story recently on the fact that 2025 is the year that boards really need to be there for their organizations and giving them lots of things that they can do really well and clearly, people are looking at more immediate kinds of funding. So even though you may have been thinking about doing a plan giving program which is always smart to do. That's not going to help you right at this very moment. You need to do things that you know really help, you know, basic sort of annual fund type tactics at the moment to help get you through.

CJ Orr: Great thanks, Stacy. I heard you both talk about the importance of data. So that would be definitely a takeaway. So, Shannon, if you took a look at some of the news over the weekend. There was a lot of talk about the future of Usaid, and it seems, and fair warning. These articles are not great news, so the news is that seems like Trump musk, and some others at the efficiency or Doge, want it to be removed, shut down, or just non-existent, we'll see. But do you think that's going to happen? And then, if so, what do you think is going to be the impact on the sector.

Shannon McCracken: Well, I'll answer the last question first.st If it is shut down, there will be huge impact on the sector. We looked at some analysis yesterday of some of the larger organizations. So you think of larger as having a bit more strength than reserves, and so forth, and some of the larger organizations that receive funding through Usaid and looking at their working capital. They don't have, you know, 90 days or 6 months of reserves to be able to just see through this to continue in some of their program commitments. And that's where we're seeing already, programs being shut down or paused or staff furloughed. And you know, while we're while there's a little bit of a waiting game and sorting out here. So so the impact on the organizations, the impact, more importantly, is on the work that the organizations are doing and those commitments that they have made that will absolutely suffer. We can say that safely because it's suffering today. It's already happening. And it's so immediate. You know the likelihood that that will happen. I would say there is very high likelihood that at the very least the programs and the agency will have significant overhaul. And we have to, you know, kind of take back some of the history. Usaid was formed in 1961, I believe, by Kennedy. He did that because he was frustrated with the bureaucracy of the State Department, and how he felt it was too slow to get funds out, and this was during the Cold War, and he was really trying to, you know, to combat what was happening within Soviet space and so forth. Ever since then there have been partisan opinions on the work of the Usaid that causes and work that they're they're doing and supporting. So it's not new that this is divisive. It's just new that such rapid and challenging such an understatement word. But what we're seeing right now is just. It's just very different. And there's a whole other arena to get in here to into here with who's being given access? Who isn't being given access the data security. There's there's a lot more there. But Cj, we're halfway through. So I'll pause.

CJ Orr: Only so much time. Okay, very good. Thank you. So let's talk about next on our agenda here, big institutions. Stacy, you all wrote in the Chronicle a couple months ago, maybe a month or 2 ago, that there is a push in the government to remove the 5 1 c. 3 status for business like charities. Can you explain that? And has there been anything coming from the White House or DC. Indicating that this could be on the agenda.

Stacy Palmer: Yeah. So the tax foundation is supporting this idea and working closely with a lot of Republican lawmakers to get across this idea that there are a lot of groups that have tax exempt status that, in their view, don't deserve it. So you know, it can be something like nonprofit hospitals that might seem really commercial and just like a for-profit hospital, the NCAA. Those kinds of things that we don't really necessarily think of in the same category as the food bank, but they are. And so there's been a lot of discussion about whether it's just time to just get rid of the tax exempt status altogether. So this idea is circulating. One of the things that I was starting to hear last fall was that there was an effort to really make sure that that was something that was understood among the Republican staff members, many of whom are new. And again, we continue to have a lot of new staff members. And that's another of those basic sort of lessons of lobbying and advocacy, even though you think that you've gotten something done. And you've explained something. You know, there's just been an enormous amount of change in who understands this kind of thing. And you know you just have to keep explaining. This is how this works. This is why the tax exemption matters. This is the way to think about it, but it's possible that there'd be some kind of reordering of who is eligible to have a tax exempt status. I don't think anybody would ever go so far as to get rid of the 501 c. 3. Unless, you know, there's some major scandal that got in the way. I just can't see. I don't see that happening, but there's just a lot of suspicion? Of what does it mean to be tax exempt? What are the benefits? Why do we give them which goes along with suspicion of all government subsidies?

CJ Orr: Very good. Thank you. And let's talk about the rumor about endowments potentially being tax. Do you think there's anything to this? Or or do you think that this is just talk.

Shannon McCracken: There could be something to this. There is endowments are currently taxed. And this was part of the tax cuts and Jobs Act in 2017. They're currently taxed at about 1.4%, not about at 1.4% on gains, but it's only affecting the very largest endowment. So like half a million dollars per student kind of endowments. So they're about fewer than 60 institutions that are that are affected by this. What is being proposed or what is being floated is basically a tenfold increase. So like a 14% tax on that game which is clearly significant, it would take the government share of that, or the intake of taxes from something like 70 million to 700 million. So significant. We'll be talking here in a minute. I know about the charitable act and restoring a charitable tax deduction for all taxpayers, where I think this endowments conversation could become interesting and really come into play for everyone, even non-education organizations is if the government tries to use this as a little bit of leverage. Okay, nonprofit sector, you're asking us to take a significant. 3.4 billion dollars hit to restore a tax deduction. How are you going to help us pay for that? Maybe we could put a higher tax on endowments from your counterparts, and that'll help offset some of the cost and do a little bit of like splitting and pitting within the nonprofit sector. So that's just something to to be on watch for, and a reason why all of us need to watch this, even if you're not holding a large endowment.

CJ Orr: Let's talk about DAFs. Obviously they have been over the years increasing in use and popularity in the sector and Stacy, you all reported that there's been there is bipartisan support for encouraging required distributions from DAFs. Can you explain what's being talked about?

Stacy Palmer: Yeah, as many people may know, donor advised funds are kind of an odd creature in the law. They didn't really get established in the way that foundations do. It was really sort of an Irs decision. And so one of the things that people have been suggesting is, why don't they have a payout requirement, just as foundations do. Foundations have to distribute at least 5% of their assets every year. So should donor advised funds. There's no, you know, you really don't ever have to give anything out of. I know a lot of people clearly do that, but there's no requirement that this money goes out the door. And now that donor advised funds have as much as the very biggest foundations in their assets, they're really important, and if that money is not going out the door. That means working nonprofits really don't have a chance to get those funds. So there's a lot of talk about whether it be a good idea to say there should be at least a minimum requirement. That idea of looking at foundations is a way of thinking about it that would encourage things. One of the things that's difficult about regulating this field is, there are some really, really big donor advised funds, and then there are a whole bunch of small ones. It's like the rest of the charitable world where you've got very, very big ones. And so if 5% of their assets had to go out the door. That would be really significant funding.

CJ Orr: Helpful. Shannon, do you think that this would be, or what would the pros and cons if this were to go through.

Shannon McCracken: I think Stacy really touched on some of the pros of moving money through faster. So it's not sitting somewhere so that it really is going to work right away. I wouldn't even necessarily say cons. But I would say considerations before we really rally behind any sort of regulation or requirements for donor advised funds is to look at, really examine some of the use cases. Today, we look at these really big numbers, and we think about. And of course the media likes to talk about uber wealthy people who take a tax break park all their money there and then. It's not doing any good at all. No sort of intent or near term intent to distribute that those funds to nonprofits who need the money today. That is not clearly not all of givers, and not the way that all DAFs are being used. I was in a room with about 25 fundraising agency executives 2 weeks ago, and all of them were commenting on the significant increase in the number of daft gifts, particularly at year end, that their clients across many cause areas, different sizes, were receiving. So you know, donors, everyday givers are using their DAFs, or appear to be using their dafts in ways that we would support. People are setting up DAFs for different reasons, families, and instead of setting up family foundations, as they may have a number of years ago, they're now using DAFs because they're easier. It removes some of that administrative burden of running a or managing a foundation, and it gives their family some decision, making opportunities around how to give now and into the future. So there's, you know, there's that use case. There are people who, like we saw this in 2017 and 2018 as tax laws around charitable, giving Flex a little bit and choosing to bunch their giving, putting money in all at once, and then spending that out as they would have, anyway. But you know, putting it there and knowing that it's available and to distribute, there's data showing that dafs are pushing out much more money than foundations are. It's more like 20 plus percent for many of them. So just making sure whatever that required distribution is that we're not creating a race to the bottom that actually slows down some of that. And to Stacy's point. Then how do we really balance that for large DAFs versus you know, smaller community based ones to to ensure that it's doing what we intended to do. So like everything else, we're talking today, not really straightforward and simple, but certainly something that I think will come up sooner rather than later.

CJ Orr: Yeah, I think that race to the bottom quote was a good one. Right? If people are required to give 5% there, they might just give 5% instead of maybe traditionally, give 20% right? Because they have that number in their head that they have to hit, and they will stick to that very interesting. Okay, so let's talk a little bit about what you all are thinking is coming down the pike here. Stacey, what do you think we're going to see next from this administration?

Shannon McCracken: Oh, yes, please.

Stacy Palmer: Probably 10 things happened while we were just on Zoom.

Shannon McCracken: 4th for the recording here.

Stacy Palmer: So, you know, I think, obviously, we're going to see just, you know, a lot of elimination of regulation institutions, you know. There's talk about getting rid of the Department of Education now, you know, was the popular thing yesterday. So I think many of the kinds of things that organizations that are in the field. That they have specific missions on, you know, are going to come up. I don't know how many more things are going to be aimed at. The nonprofit sector writ large, like we've seen with the foundations or other kinds of things like that. But each individual area and the causes that people care about. They're going to get hit in various ways and need to defend themselves or talk about. You know what are the solutions we can have, you know, if we agree that certain parts of our system are broken, can nonprofits be advocates for saying, here are some ideas that work rather than always being in a position of saying, No, no, don't change things. What have we learned in philanthropy? And from the nonprofits doing the work that might be really positive ways to change how government works. I think there might be some backlash if nonprofits are only seen as complaining, opposing sort of that kind of thing, and there's plenty that they need to speak out about the impact on their causes and the people they serve, but also having some positive messages about like, well, here's another way to do it that we've proven works.

CJ Orr: Shannon, how about you?

Shannon McCracken: 2 call outs I would make here one is. And on some of these issues, like Dei, this is, you know, this is more relevant than others. But a word that I was hearing a lot last week was over correction, you know, in the moment as we are maybe caught off guard, or something came on stronger or faster or harder than we expected it to. Or there's this fear and this, you know, real urgency around risk mitigation. There's an over correction by organizations that maybe don't need to be as concerned about certain things, or you know, and and that can be understandable. But you know, monitoring for that right and and and also being willing to then backtrack a little bit when things calm down here, as they inevitably will. At some point we'll all be able to take a breath and reassess. So just kind of hold in the back of your mind. This is the action we need to take now, or we think we need to take now and let's reassess in case it was an over correction. So I call out that the other thing and Stacey made fantastic points and nonprofits exist because of the need and the support and the recognition by donors and other funders that nonprofits are a solution to a problem. And in many cases the best solution to a problem. The Government, through history has identified nonprofits as their partners in solving some problems, and sometimes nonprofits are standalones that are formed out of a challenge or looking for a solution, and can be big drivers in that public support for nonprofits is what has always kept our doors open by and large. And that's who we need to look to right now is, look for that public support continue to message to our donors about the important work that we're doing. Even as these other threats and these other distractions are happening, really focusing on the positive of the work, the critical missions that we serve and the people that we serve, and keeping our eye on that ball as well. And and making sure as long as that public support is there, then the nonprofit sector will continue to to sustain.

CJ Orr: Very good. Want to channel our inner accountants with you both. And soon there'll be the renewal with some changes for the trump tax cuts that went into place many years ago. Do, maybe, Stacey, I'll start with you. Do you have an opinion on what new changes, particularly for the nonprofit sector might be put into new law when this renewal comes.

Stacy Palmer: Sorry. Which. What were you referring to?

CJ Orr: For the the trump tax cuts there.

Stacy Palmer: Tax cuts. Yeah, yeah, so. I mean, for sure it needs to be renewed, or else it will expire. So we know there's going to be a tax conversation, and I think everybody was geared up for that one versus some of these other kinds of issues. You know, there was a major impact already, you know with the fact. The move to the standard deduction. As we know, billions of dollars were lost to nonprofits when the standard deduction and when everybody having access to a deduction went away. So now only about 9% of Americans have access to a charitable deduction. So that's going to be certainly a discussion. Some of these things, like the donor advised fund payout, the endowment tax. Anything that's related to tax issues affecting nonprofits could all be thrown in there. There's going to be a need to pay for this effort and to think about it. So I would keep my eye on that one in a big way, because there's lots of different things that happen, and they often happen at the last minute. So making sure that you're really, you know, talking to the people, especially if you're a member of Congress, is on one of the tax writing committees to be very close to the staff there and helping them understand what truly matters, because you may not have as much time to build support for it as you want, but right now would be the time to think about it, even though we really haven't heard a lot of talk about taxes at this moment. But we will.

CJ Orr: Yeah. Shannon, what do you think?

Shannon McCracken: Yeah, the universal charitable tax deduction is the one that we're really keeping our eye on. And, as Stacey said, we expected it initially to come up pretty early in the New Year and the new Congress. And now it'll be later than that if there is something like a Government shutdown that's going to postpone it even more. It's sort of hard to project those timelines now. And we know there is that very hard stop on December 31, st that all of this expires. If it's not done by then. So Congress has lots of motivation to get this done before, then we know charitable tax deduction will be part of that conversation, and and just really repeating, echoing what Stacey said to be ready for that prepared for that, and and also think about what concessions we're willing to make. So we're looking for something like starting with $600 for for married and $300 for single filers. Is there something there that we need to concede on? And just to get this through? Or is that something that's hard and fast? Really, ultimately, we want to see it get written into code. Then we can come back later and work on increasing it. And then just a reminder to everyone, even more so than we expected. This is going to be a very Republican driven tax discussion. And so again, helping your Congressional leaders understand the impact of your work, not in a complaining way, not in an asking way, and really a reinforcing way. Here's how you know. Here's the work that we're doing. Here's why public support is so important, and we need your government to support to ensure that that continues to fuel. This work.

CJ Orr: Shannon over the next few months, how does TNPA get involved in those conversations.

Shannon McCracken: So well. So we have a lobbyist who's on the hill every day. Basically, every day we have opportunities for our members to get involved. We have Capitol Hill days. We have different calls to action. We have a couple on our website right now around the Federal funding. If you go to tnpa.org slash Federal funding. You can find some updates and and opportunities there. And we have an advocacy week coming up in April. So many of those events. We also participate in coalitions across the sector. So there's a charitable giving coalition where our Vice President of Government affairs is one of the co-chairs of that steering committee. So there are lots of ways for Tnpa members or others on this audience who are interested in getting more involved to to reach out.

CJ Orr: Great before I get to QA. Is there anything that either of you want to discuss? That we haven't discussed yet?

Stacy Palmer: The one thing I you know, because we've been talking about advocacy throughout this conversation, and it's important to point out that sadly, we've seen a real drop in the number of nonprofits that are willing to get involved in public policy. This was long before the change in administration, but there's been a real diminution of people wanting to participate. There's a lack of understanding of what the laws allow you to do. Nonprofits can absolutely talk about various issues. They just can't be partisan. So I think some education about what can be done and why it's important is quite critical. That's again where I would invoke my board to have a conversation about that. Make sure that they don't feel that it's risky, but it's incredibly important that we all participate in the system and recognize that you can't count on somebody else doing it. There are not enough nonprofits that are engaging at this moment. So it's up to people who participate in calls like this to do this, and to urge the nonprofits that you know all of the other leaders, the donors who are on this call to think about making sure that their voice is heard.

Shannon McCracken: 100% Stacy and I'll add too. There were issues in our agenda and expectations for this Congress that existed before we got to January 20th and before we started talking about executive orders and Federal funding and Dei and everything else that's followed, and those are still critical issues, and we can't afford to take our eye off of those we need to help keep pushing those forward. Make sure nonprofits are involved in that discussion. A big issue for us at TNPA is around data privacy and getting a federal law set for data, privacy and access and use of data. We're doing work in the AI regulation. Because AI, as we all know, is changing absolutely everything about our lives and the way we do business and nonprofits need to have a voice, in that we cannot afford to sit that out and let you know corporate interests and others make all of those decisions. And so those will continue to be critical issues this year, just because we've piled on a lot of others doesn't mean we can afford to not worry about or postpone focus on those those key ones as well.

CJ Orr: Thank you. Okay. So we're gonna do some Q&A. 1st one here is from an attendee. Do we think the Dei backlash pertains to women as well. There are thousands of women's leadership programs, for example, are those at are those at risk.

Shannon McCracken: That's a great question. I mean the the fact that I don't think it's off the table would be my answer to that. I think, absolutely everything gender, race disability. We heard disability come up last week from the President. I mean there. Nothing is off the table here, even areas that we would have thought are safer spaces within DEI. So again, I would look at those programs. Stacy talked about it earlier, really get to the core of what those programs are intending to do. If it's about making sure that women have the tools and resources and access to have opportunities within leadership space promote the program as such. Don't limit your applicants, but you will find some self selection that may happen there, and you may also be able to build out other programs with with allyship and partnership around that that makes sure that you are giving equal opportunity to everyone who is interested in supporting your mission and still continuing to do the work and reach the people that you need to reach.

CJ Orr: Stacy anything to add.

Stacy Palmer: I I agree with that.

CJ Orr: Okay, there we go. Another question here from Nancy Proctor. Are there umbrella organizations of foundations and major donors? I, different from the kinds of organizations represented in this on this panel that meet, discuss policy, and could be resources and or lobbied for support on these issues.

Stacy Palmer: Yeah. So the Council on foundations has been very active. It's a membership organization for grant makers. So they definitely have been issuing statements and thinking about those Grant makers for effective organizations is another organization that you can tell from its name grantmakers that are supporting the inner workings of nonprofits to make sure that they do a good job, and you might think every donor cares about that. Of course they do. But when you're thinking about climate change. You're not necessarily doing it through the lens of how strong is the organization, what's the infrastructure? So those are groups where those conversations are happening? There are also a lot of affinity. Groups like ABFE, you know, was formerly the Association of Black Foundation Executives. All of those organizations have lots of resources and are thinking about these kinds of things. So it's incredibly important for donors to be able to participate. So you know, I hope that you'll find more resources available as we know more, we'll talk about those kinds of things. But donors can play a very, very active role here.

CJ Orr: Thanks, Stacy. Shannon, anything to add?

Shannon McCracken: Independent sector. yeah, there, there are a number of of organizations that play in this space. So once you really start to to search for that, they will raise their hands for you.

CJ Orr: Yeah. And Shannon, I heard that that was independent sector, correct?

Shannon McCracken: Independent sector, United Philanthropy Forum, I mean. And there are a lot of coalitions that exist within these groups, too, and some overlap of members and interests and the work that they're prioritizing. So yes, as you start to seek out one, you'll find others.

CJ Orr: Very good one question from Sarah Mayer. Are you seeing changes in C. 4. Giving or the regulatory regulatory environment as well? Opinions on C. 4 s.

Shannon McCracken: You know, I think C. Fours are already a little bit earlier in the sense of having some comfort level and some you know sense of freedom and really standing on positions. You know. But everybody right now I feel like we keep coming back to this point. There, nothing is off the table right now, and I I think that C. 4 s. Are looking at some of these vulnerabilities, or some of these risk factors in the same way that C. 3 s. Are, or closely following behind, C. Sixes, which are are associations like mine. You know, it's we're all looking.

CJ Orr: Shannon, I think this question would be for you. Should those of us who live in blue States be contacting representatives on other side of the aisle to advocate.

Shannon McCracken: A great point, so always start with the electeds from your State. They are. They will take messages from anyone, but they are going to give the most weight and the most attention to those that are coming from your State. Now that can be where you're headquartered, it can be where your employees are. So if you have remote employees across states, look at, you know, look at leveraging. Those access points could be where you have programs that exist volunteers, board members. So really look at your whole footprint. And yes, you could reach out to, particularly if you're working on an issue that, you know, is a particular passion area or particular focus for. So if you are working on gun control, for example, reaching out to Senator Murphy, like, you know, just knowing who your allies and advocates are can help. But but 1st and foremost, you're going to get the most. You're going to carry the most weight in your own state.

CJ Orr: We talked earlier about the Robert Wood, Johnson Foundation standing its ground, and one of the funders to speak out that they are against the Vdi executive orders. Are there any others other big foundations or other names that you've seen do similar.

Stacy Palmer: There's some that are definitely thinking about also what kind of funding they might offer at this moment. So I think we're on the cusp of seeing some announcements from foundations that will be collaborative and thinking about, you know, sort of how can they support nonprofits at this moment? So foundations can move fast, as we learned in the pandemic when they want to. So I think there's a lot of activity. There hasn't been as much, you know sort of that we can all see, but I would expect to see some coalitions coming together on some of these issues, and you know donors may feel more comfortable doing it that way of working together and saying, You know, this is what we care about, and perhaps some pooled funds to get money out the door, and you know the support that they've been providing to. Some of these groups

Stacy Palmer: pursuing the lawsuits are really important, you know, those would not happen without philanthropy, money having buttress those organizations, making sure that they're as strong as possible.

CJ Orr: Stacy, Shannon, anything else to add, before we wrap up?

Shannon McCracken: No, that was great.

CJ Orr: Okay, so that's about 2 o'clock, just to quickly summarize. I'm trying to do this in 30 seconds or less. We heard a lot about changing language terminology, using data. We've heard about organizations that have changed their messaging or some that have done the opposite and stuck stuck to their ground. We've heard a lot about how to advocate, or how to speak up, and what avenues to take and where to go.

CJ Orr: We've heard a lot about what the future entails in terms of the new tax policies, or what's coming from the Trump Administration.

CJ Orr: We have talked a lot about diversifying funding. What to do if corporate dollars aren't there anymore? We heard some good ideas around a reserve fund line of credit and some other options on how to raise cash during this time, or this 90 day window.

CJ Orr: And we talked a little bit about DAFs and some endowments and and some tax laws there.

CJ Orr: Thank you. That was a lot a lot covered there. And we did get some questions in the Q. And A. Will there be a summary? There absolutely will be and if there are questions that we didn't get, to which there are a lot, we're happy to reach out individually to those folks with an answer. But long story short. Thank you. Both Shannon and Stacy. Wow! This was an amazing webinar, and it's also

CJ Orr: You all both took a risk right to to be here and speak about this and and give your opinion, and we really appreciate you doing that. I believe that the sector appreciates it, and I think all the 300 or so people on this call appreciate as well. So thank you both.

Stacy Palmer: Thank you for doing this.

CJ Orr: And then last, not least, thanks to everyone for tuning in. We we really appreciate the time. Again, we'll send around the video later, and we'll send a summary and then, thanks to my team on the back end here, that made this all happen really appreciate it so thank you all, and enjoy the rest of the day.