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Potential Effects of Trump Policies on Fundraising and Nonprofits
Potential Effects of Trump Policies on Fundraising and Nonprofits
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In addition to my post addressing how the new tax law is likely to affect fundraising, in this article I take a high level look at potential effects of some Trump administration policies on fundraising and stakeholder nonprofit organizations.  The playing field has changed significantly with the new administration and Republican controlled Congress, and it is incumbent upon us to think through the implications for our work and organizations.

This post is rated “M” for mature audiences.

1. NEW TAX LAW

See the GivingTake post for a comprehensive review: What Fundraisers Need to Know About the New Tax Law…All in One Place dated May 17, 2018.

 

2. CLIMATE AND THE ENVIRONMENT

A.  Exit Paris climate accord

Trump on June 1, 2017, announced he was pulling the United States out of the Paris accord. The agreement, however, doesn’t allow the 196 participating countries to officially pull out of the agreement until November 2020, after the next presidential election.

Implications:  Environmental organizations can elevate the importance of their mission to donors and donor candidates.  They can create initiatives to address specific consequences for the US pending withdrawal from the Paris accord, and in so doing increase annual giving and major donor efforts and results.

B.  Cut regulation of greenhouse gas

Trump’s Environmental Protection Agency on Oct. 9, 2017, signed an order to repeal Obama’s signature policy known as the Clean Power Plan, which sought to reduce greenhouse gas emissions from power plants. That policy, established in 2015, sought to prod states to phase out coal plants.

Implications:  Organizations treating people with asthma or chronic respiratory diseases should not expect to see a decline in people needing treatment.  The cost burden on the healthcare system will continue and will contribute to keeping health insurance premiums from declining – since asthma is one of the leading reasons for emergency department visits.  As a result, donors who are less affluent and do not itemize will have less disposable income to give to nonprofits, exacerbating the declining pool of non-itemizer donors.

States and regions that produce coal will continue to see a decline in coal related employment due to market changes and use of technology, so the need for job training and two-year colleges for 21st century positions will continue.

C.  Rescind automobile efficiency standards

Trump’s EPA on April 2 announced that it was rescinding Obama-era fuel economy rules for automobiles. In 2012, the Obama administration announced an effort that sought to double the average fleetwide fuel economy of new cars, SUVs, and light trucks by 2025.

Implications:  This will result in more fossil fuel being burned than would have been under the Obama rules. See 2B above.

D.  Expand offshore drilling

Trump administration officials on Jan. 4 announced that they would allow new offshore oil and gas drilling along the near entirety of US coastal waters. The GOP’s December tax overhaul also included a provision to allow drilling in Alaska’s Arctic National Wildlife Refuge.

Implications:  This greatly elevates the chance of a large oil spill that could devastate some local economies that rely on tourism and fishing.  Some local economies may become depended on supplying labor and equipment for oil production and would be exposed to the boom and bust pitfalls that come with this.  Local nonprofits and donors will be directly affected by economic conditions.

 

3. PROTECTING THE WORLD’S OCEANS

President Trump has done away with Obama-era policies aimed at protecting the world’s oceans and instead issued an executive order calling for marine environments to be used to promote economic growth. Trump’s order downsizes the Ocean Policy Committee established by former President Barack Obama in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico. Several regional planning bodies will also be eliminated.

Implications:  Environmental, ocean and fishery preservation organizations can elevate the importance of their mission to donors and donor candidates.  They can create initiatives to address specific consequences for this policy, and in so doing increase annual giving and major donor efforts and results.

 

4.  DEREGULATED FINANCIAL INDUSTRY

A.  Loosen scrutiny on bank risk

Trump signed a major rollback of the Dodd-Frank financial services regulation law in May 2018, allowing many mid-sized banks to escape a particularly high level of regularity scrutiny imposed by the law. Dodd-Frank was the keystone of Obama’s post-2008 recession measures to prevent another meltdown.

Implications:  Another economic crisis would be bad for everyone, needless to say.  But with this rollback comes less oversight of financial institutions (think Wells Fargo) which, over time, could put a large portion of less affluent, non-itemizer donors at a disadvantage.  On the flip side, capital may be more available to nonprofits for renovations and expansion.

B.  Block fiduciary rule

A Department of Labor rule requiring brokers to act in the best interest of their clients for handling retirement accounts was supposed to take effect last year. It was delayed by the Trump administration and eventually rejected in a federal appeals court ruling. The Securities and Exchange Commission is advancing its own rule to address the issue.

Implications:  Fundraisers count on the donor’s financial advisors for sound counsel that is in the best interest of the client.  If this is not mandated, some advisors may push for funds retention, so they can earn more management fees, and advise against philanthropic gifts to organizations. Over time, this rule could put a large portion of non-itemizer and itemizer donors at a disadvantage, exacerbating the declining pool of non-itemizer donors.

C.  Weaken Consumer Financial Protection Bureau

Trump has dramatically weakened this agency created in the Dodd-Frank law by appointing former Republican congressman Mick Mulvaney, a harsh critic of the bureau, as its temporary director. Mulvaney shifted its focus away from enforcement and toward deregulation.

Implications:  See 4A & B above.

 

5. ERODED AFFORDABLE CARE ACT

A.  End individual mandate

Trump and Congress failed to repeal the signature health care law signed by President Obama, but they have attempted to weaken it in myriad ways. The December 2017 tax bill eliminated the individual mandate, a core provision requiring that most Americans obtain insurance. This is expected to result in 13 million people losing or dropping insurance coverage.

Implications:  Where to begin.  Health insurance premiums will, for most Americans, rise faster than before Trump.  This means less disposable income especially for non-itemizer donors.  Millions of people who lose their insurance coverage will be less healthy and less productive and will be more of a financial burden to the healthcare system… forcing increases in insurance premiums.  The rate of rural hospital closures has already begun to accelerate.  This will greatly harm local economies, increase the personal cost of healthcare and result in greater morbidity and mortality. Over time, this repeal will put a meaningful portion of non-itemizer donors at a disadvantage, exacerbating the declining pool of non-itemizer donors.

B.  Abandon protections for preexisting conditions

The Trump administration said in a court filing in Texas this month that it would no longer defend a provision of the law that requires insurance companies to provide coverage regardless of preexisting conditions, a core tenet of the law.

Implications:  See 5A above.  The elimination of this provision will greatly reduce job mobility and make health insurance much more expensive or unaffordable for everyone and especially for people with preexisting conditions.  In the near-term, elimination of this provision will put a meaningful portion of non-itemizer donors at a disadvantage, exacerbating the declining pool of non-itemizer donors.

C.  Cut subsidies to insurance companies

Trump cut cost-sharing payments to insurers offering coverage through the ACA in October of 2017, accelerating concerns that they would pull out of the program. It was among a variety of destabilization tactics Trump employed to weaken the law.

Implications:  See 5A & B above.

D.  Slash outreach funding

In August of 2017, Trump cut funding for public outreach for ACA from $100 million to $10 million and also reduced support for “navigators’’ who help the eligible people sign up for the insurance.

Implications:  See 5A above.

 

6.  ERECTED WELFARE BARRIERS

A. Work requirements for Medicaid and other federal programs

In January of 2018, the Trump administration informed states they could cut off Medicaid benefits to nondisabled people who are not working, in school, or volunteering — a major break from past administrations. The Trump administration has also directed its federal agencies to explore whether they can impose work requirements for other federal benefits such as low-income housing.

Implications:   This could be a boon to nonprofits that provide job training and placement, if there are federal and state funds to support this change.  It will also likely result in more people losing Medicaid coverage that will put a greater strain on the healthcare system and the cost of health insurance for nonprofits and individuals.

 

7.  FAVORED FOR-PROFIT COLLEGES

A.  Freeze student debt relief

The Trump administration last summer delayed Obama-era rules designed to protect borrowers who were defrauded by predatory colleges and offer them a pathway to student loan debt forgiveness. Secretary of Education Betsy DeVos reopened the rule-writing process.

Implications:  This could result in tens of thousands young people to remain deeply in debt and without needed job skills.  These people will never enter the donor universe, exacerbating the declining pool of non-itemizer donors.

B.  Weaken oversight

The administration in April temporarily reinstated an accrediting agency that had come under fire for accrediting two scandal-ridden for-profit colleges. It also dismantled a unit of the Department of Education that investigated such for-profit schools.

Implications:  The integrity of all colleges and universities suffer in this environment. If more disreputable colleges are allowed to flourish, they will represent greater competition to smaller established colleges, putting them in even more financial peril than they already are.

 

8.  CRACK DOWN ON IMMIGRATION

A.  Impose travel ban

Trump banned people from eight mostly-Muslim countries from traveling to the United States. After court challenges, the order was modified and pared to seven countries. Its legality was affirmed by the Supreme Court in June 2018.

Implications:  There are already reports of a “brain drain” as a result of this policy.  Academics, scientists and students are prevented from visiting the US from Iran and seven other countries.  Many higher education and research institutions, rural healthcare providers and tech industries will be and are already being harmed. The uncertainty caused by this policy has already encouraged some research enterprises to move overseas.  In addition, tourism from overseas to the US was down 4% in 2017, and local economies dependent of seasonal labor and hospitality workers are experiencing severe labor shortages.

B. Cancel DACA

Trump moved to end the Obama-era Deferred Action for Childhood Arrivals (DACA) program in September of 2017, a move that will eventually revoke legal status for nearly 700,000 young immigrants who were brought to the country as children and make them eligible for deportation. The action is currently not being enforced and is tied up in court challenges.

Implications:  This will surely put a psychological and economic strain on many employees of nonprofit organizations.  Local economies will suffer in the same way and labor shortages are already slowing the pace of economic growth. The historic linear relationship between economic growth and charitable giving may begin to suffer. In the near-term, the DACA limbo and possible revocation of legal status, will harm the economy and put a meaningful portion of non-itemizer donors at a disadvantage, exacerbating the declining pool of non-itemizer donors.

C. End legal status for Central Americans

The Trump administration has revoked temporary legal status for hundreds of thousands of Hondurans, Haitians, Nicaraguans, and Salvadorans who were granted permission to live in the United States after natural disasters years ago. They will soon be required to leave.

Implications:  See 8B above.

 

9. FREE TRADE

A. Cancel Trans-Pacific Partnership

Trump on Jan. 23, 2017, officially directed the US to withdraw from the TPP, a trade deal between the United States and 11 Asian-Pacific countries. Obama had signed the deal in 2016 but it hadn’t yet been ratified by Congress.

B. Impose steel and aluminum tariffs

The Trump administration starting on June 1, 2018, imposed a 25 percent tariff on imports of steel and a 10 percent tariff on aluminum on the European Union, Canada, and Mexico.

C. Introduce tariffs on solar panels and washing machines

In January 2018, the Trump administration-imposed tariffs on solar panels and washing machines that are made outside of the United States.

D. Initiate China tariffs

The administration has been moving forward on plans to place a 25 percent tariff on $50 – $70 billion worth of imports from China.

Implications:  (9A-D)  Time will tell. If this continues to escalate, most economists are pessimistic that this will end well for the US economy and the rest of the world.  With the growth of the US GDP already slowing compared to the past 10 years, a global trade war may accelerate economic decline… which is bad for everyone.

 

10. LGBTQ

A. Ban transgender people from military

In March of 2018, Trump signed a memorandum banning transgender people from serving in the military if they have undergone or want to undergo a gender transition. The thousands of transgender people already enlisted are allowed to remain in the military. This was a modification of a ban he announced in August 2017, which was tied up in courts.

B. Revoke trans bathroom guidance in schools

Trump in February 2017 rescinded Obama-era guidelines asking public schools to allow transgender children to use the restroom of their choice.

Implications: (10A&B)  Organizations that address LGBTQ, social justice and civil rights issues have now added these Trans issues to their action plans.  Donors are increasingly better informed about these issues and sympathetic to those organizations representing marginalized people.

 

There are many more Trump administration policies that will likely have a negative effect on our civil society.  If the civility of our society erodes as a result of these and other actions and behaviors by Congress and the White House, the implications for how the public values your organization’s mission and supports it, are uncharted and perilous.

Matt Viser, Liz Goodwin, David Abel, Jon Chesto, and Deirdre Fernandes of the Boston Globe staff contributed to this post through explanations of the issues and policies.

 

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ADDITIONAL TRUMP ADMINISTRATION POLICIES

Approve XL pipeline

Trump reversed Obama and authorized construction of the Keystone XL pipeline to bring oil from Canadian tar sands fields. The pipeline was bitterly opposed by environmentalists who said the oil it will carry will contribute to global warming. Construction has yet to begin as a result of issues north of the border.

Shrink national monuments

Trump on Dec. 4, 2017, slashed the size of two national monuments in Utah by about two million acres, the largest reduction of federal land protection in history. The decision shrank Bears Ears National Monument and Grand Staircase-Escalante, reversing protections created by his Democratic predecessors. President Obama designated Bears Ears a monument in 2016; President Clinton created the Grand Staircase-Escalante monument in 1996.

Target Planned Parenthood

Trump signed legislation in April of 2017 that allows state and local governments to withhold federal funding to clinics that provide non-abortion related family planning services if the clinic also provides abortion. In May, his administration announced a policy of withholding federal funding to clinics that perform abortions or refer people to clinics that do.

Global “gag rule”

Trump, in his first month in office, reinstated and expanded past GOP presidents’ prohibitions on international aid going to groups that provide abortion referrals or counseling.

Deny insurance coverage for birth control

In October of 2017, the Trump administration said it will permit employers to deny coverage for birth control based on religious objections.

Fill federal courts

An undisputed success story of Trump’s tenure so far is the rapid clip at which he’s sending judicial nominations over to the GOP-controlled Senate. He’s sent 21 appeals court judges to the bench so far — more than his five predecessors at this point in their terms. Eighty-eight percent of those added to the federal bench under Trump are white, and 76 percent of them are male, according to a Bloomberg analysis. (Under Obama, just 38 percent of judicial nominees were white men.)

Secure conservative Supreme Court justice

Neil Gorsuch was sworn in to the Supreme Court in April of 2017, replacing conservative firebrand Antonin Scalia, who died the year before. Conservatives were delighted by Trump’s pick, and Senate Republicans quickly confirmed him by changing the body’s long-standing rules requiring 60 votes to break a filibuster for Supreme Court nominations. At just 50 years old, Gorsuch will likely sit on the crucial court for decades.

Exit Iran nuclear weapons pact

The United States on May 8 withdrew from the agreement that lifted sanctions on Iran in return for the regime stopping its pursuit of nuclear weapons.

Engage North Korea

Trump on June 12 met with North Korean leader Kim Jong Un, marking the first time that leaders from the two countries had met. Under preliminary agreements, the two sides would work to denuclearize the Korean Peninsula and the United States would halt joint military operations with South Korea.  There now is evidence that North Korea continues to build up and improve it nuclear offensive capabilities despite Trump’s proclamations to the contrary.

Restrict Cuba relations

Trump on June 16, 2017, announced new policies that restrict some travel and commercial transactions on the island – part of an effort to roll back Obama’s opening of relations with the communist country.

Open Jerusalem embassy

On May 14, 2018, Trump officially moved the US Embassy in Israel to Jerusalem and recognized it as the capital. Previous presidents, despite promises to also move the embassy, had kept it in Tel Aviv as a way to respect Palestinian claims to Jerusalem and create a better atmosphere for a peace deal.

Increase spending

As the result of a February 2018 budget bill, defense spending can go much higher than previous limits. It means about $165 billion in additional spending over 2018 and 2019.

Expand nuclear weapons

The Pentagon on Feb. 2, 2018, released a nuclear arms policy that included two new types of weapons, including cruise missiles fired from submarines. The policy runs counter to Obama’s efforts to reduce the size and scope of the US nuclear arsenal.

End net neutrality rule

The Federal Communications Commissions repealed rules on net neutrality, which required Internet service providers to provide everyone with equal access to online content. The repeal took effect on June 11.

 


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