A Growing Threat to American Nonprofits
Democratic freedoms in America are under pressure. The Trump administration and Republicans in Congress are testing the limits of our Constitutional system of checks and balances.
The experiences of other countries that have moved toward authoritarian rule suggest U.S. nonprofits and charities may face similar challenges. We already see warning signs.
New Rules About Money from Other Countries
Russia enacted a law in 2012 that labels groups that receive foreign funding as “foreign agents.” This makes them look like enemies working for other countries. Hungary and Georgia copied this approach.
Hungary recently attempted to pass a law prohibiting nonprofits from receiving funding from other countries, including grants from the European Union. A special government office was set up to investigate these groups and recommended closer government control.
In November 2024, Venezuela passed an “Anti-NGO Law” requiring government permission for nonprofits to operate. Officials can deny permission based on the source of the money. U.S. nonprofits that receive international funding or work on democracy, human rights, or environmental issues are at greatest risk. In the U.S., sanctions could be at the sole discretion of the Secretary of the Treasury.
Shutting Down Organizations
Nicaragua closed over 5,600 nonprofits—about 80% of the country’s nonprofits; 1,500 were shut down in just one day. The government took control of all their money and property. Affected groups included the Red Cross, Catholic charities, Rotary clubs, and universities.
Russian law bans designated individuals from government jobs, running for office, teaching children, and organizing public events. Punishments include hefty fines and up to 5 years’ imprisonment. As of 2024, Russia has labeled 901 people and groups as “foreign agents.” Organizations working on sensitive topics—like gender equality, LGBTQ+ rights, immigration, and voting rights—face the biggest dangers.
Making It Harder to Operate
Venezuela required nonprofits to meet additional requirements not stipulated in law, including expensive audits of their financial records. Russian organizations must allow detailed government inspections, put warning labels on all their publications, and can be shut down for up to six months.
In Hungary, government funding for nonprofits now goes to groups that support the government, rather than independent organizations. Extra paperwork, random inspections, and the threat of losing tax-exempt status force organizations to choose between following expensive rules and fulfilling their missions.
Groups Closing on Their Own
Many Russian organizations have shut down voluntarily due to negative labels, overwhelming paperwork, and onerous fines. Venezuelan nonprofits now face the difficult choice of operating in secret, moving to another country, or closing completely. Organizations might avoid controversial topics, move their work abroad, or close entirely to avoid punishment.
What This Means
The pattern is clear: authoritarian governments destroy independent nonprofits through restrictive laws, harassment, and direct attacks. U.S. nonprofits should prepare for potential limitations on foreign funding, increased government regulations, challenges to their tax-exempt status, and restrictions on their advocacy activities—especially groups focused on democracy, human rights, combating corruption, and holding government officials accountable. The entire nonprofit sector could face serious threats that require new strategies and working together.
Elie Wiesel famously said, “We must always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented.”
