Over the last month, a seemingly overwhelming amount of policy-related news has flooded everyone's inbox. Through it all, Together SC has prioritized our mission and our members. We are with you, and we are here for you.
Our advocacy work is laser-focused on issues that impact your ability, as a nonprofit organization, to operate in alignment with best practices.
Many of these recent policy-related actions meet this standard.
Ahead of our annual SC Nonprofit Summit tomorrow, the largest gathering of nonprofits and philanthropic leaders in the state, we wanted to provide our members with an overview of where things stand and how we're approaching our efforts related to these policies and actions.
We are working diligently on all of these issues. We are in communication with Congressional offices, legislators, and so many of our members to gather as much information as possible and forge a pragmatic and impactful path forward.
As we focus on "Creating Common Ground" during our Summit this week, let's be sure we stand next to each other to ensure those we serve can thrive in South Carolina.
Your Allies for Good,
The Together SC Team
Karen Riordan, Ben Bullock, GP McLeer, Brooke Robertson, Desmonies White, & Destiny Hester |
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Federal Update
EXECUTIVE ACTIONS
Resource: The National Council of Nonprofits has published this breakdown of all Executive Orders (EOs) that could impact nonprofits. Updated daily. Many EOs deal with DEI, foreign aid, immigration, gender identity, climate change / environmental justice, and more.
New News: On Friday, February 21, a federal judge in Maryland placed a Preliminary Injunction on portions of two Executive Orders, EO 14151, and EO 14173, both of which direct the federal government to end funding for DEI related programs / grants, and also encourage the end of DEI related practices in the private sector.
- What Does This Mean? In their ruling, the Judge referenced vague definitions, problematic due process issues, and impacts to the First Amendment rights of grantees / contractors. There were three primary areas enjoined (impacted) in the ruling:
- Termination Provision of EO 14151: This EO called for the termination of contracts/grants related to DEI, which the judged ruled as likely to violate due process, particularly given vague definitions of "DEI" and lack of notice required to be given to recipients.
- Certification Provision of EO 14173: This EO called for two certifications in grant awards and contracts that the recipients did not "promote any DEI" programs that were against federal civil rights laws - in general, not only related to the grant/contract. The judge found the lack of clear definitions of DEI likely to chill the speech of recipients and likely to violate the First Amendment.
- Enforcement Threat Provision of EO 14173: The EO directed the Attorney General and all agencies to take "appropriate measures" to encourage the end of DEI work in the private sector. The judge ruled this provision was likely to violate the First Amendment rights of those groups, and the Fifth Amendment due to the vague definitions of "illegal DEI".
- However, the Judge is allowing agencies to proceed with reviewing various programs related to these EOs, and to issue any reports as required under the EOs.
- The ruling is not solely constrained to the organizations who filed the lawsuit, but applies nationwide.
- A What? A Preliminary Injunction requires that the action in question be suspended from implementation for the duration of the judicial process on the matter (i.e. until the Supreme Court issues a final ruling on the case as a whole). So while the Injunction places essentially a freeze on implementing these provisions of the EOs, it is technically temporary while the case makes its way through the Courts.
- What's Next: Preliminary Injunctions themselves can be appealed. The Administration is likely to appeal this Preliminary Injunction, an appeal process that could find its way to the Supreme Court. Any ruling on the Injunction would not be a ruling on the case itself.
- Related: Another recent lawsuit challenges a handful of EOs, but as of writing no ruling has been given (filed last week).
In General:
Nonprofits within certain sub-sectors are likely to be impacted by a number of EOs and Executive Actions (Memos), some more so than others. The nonprofit sector, broadly speaking, could be most directly impacted by:
- EO 14173 "Ending Illegal Discrimination and Restoring Merit-Based Opportunity"
- Directs all agencies to review grants, including to nonprofits, and provide a report within 120 days (from January 21) and recommendations on how to curb DEI efforts in the private sector - regardless of federal funding.
- Also directs agencies to identify "sectors of concern" within their jurisdiction, and other nonprofit-specific actions.
- See Section 4 of the EO for the relevant language.
- This EO is currently part of the Preliminary Injunction referenced above. So while reviews may be conducted (including notices of review), and reports may be compiled. (Other EOs may still apply to funding though.)
- February 6 Presidential Memo to Agency Heads
- Directs all agencies to review all funding sent to Non-Governmental Organizations (NGOs - includes nonprofits) to ensure alignment with Administration priorities (such as Executive Orders), and cease funding when they are not in alignment.
- Broad language makes it difficult to be sure of intended impacts.
As a result of EOs and Memos, many agencies have begun reviewing grant / assistance programs. Some programs have been canceled, unless they are related to the EOs referenced above which are part of the federal Injunction. (Remember, OMB Memo recision didn't stop EOs, it only stopped a blanket pause on all programs at one time).
We have seen notices from the National Endowment for the Arts, CDC, National Science Foundation, Department of Education, Department of Justice, US Department of Transportation, and more. If you get a notice from a state or federal agency, please send along.
Notices tend to direct grantees to cease any DEI-related programs being funded by the agency's grant, or are notices of changes in review by the agency to ensure alignment with EOs, or pauses while further review takes place.
Many of these EOs are likely to end up in litigation, if they are not already. Because these are Executive Branch actions, the remedy is found in the Judicial Branch, which is likely to take some time. Three big buckets of judicial review are forming:
- Birthright Citizenship
- Presidential Authority on Withholding Funding (Impoundment)
- Presidential Authority in Firing Certain Employees / Closing Agencies
Which cases actually make it to the Supreme Court is TBD.
The Supreme Court of the US (SCOTUS) does have the ability to issue emergency opinions and operate on an expedited timeline, but typically those paths are reserved for temporary rulings surrounding procedural matters with full hearings and rulings occurring later - often called the Court's "Shadow Docket".
CONGRESSIONAL ACTIONS
The Legislative Branch of the Federal Government meanwhile is tied up with budget and reconciliation policies.
Remember - unless Congress would like to codify or prevent Executive Actions, there is not a legislative branch counterpart to the EOs mentioned above.
Government funding runs out March 14 after the existing Continuing Resolution expires. The House and Senate have yet to agree (or propose) top line spending numbers to keep the government open at this time.
Additionally, both the House and Senate have to agree on a FY25 Budget (not a Continuing Resolution) in order to unlock "Budget Reconciliation", which is the legislative vehicle the majority party in both chambers will use to pass President Trump's priorities - Immigration, Energy, and Taxes (and other items).
The tax debate is critical for nonprofits as it is set to impact everything from charitable giving to employment matters.
You can read our primer on this issue here.
The primary update here is that while the Senate is pursuing a two-reconciliation package approach (tackling taxes in a future package this Summer/Fall), the House is putting together a Trump-backed single-package approach (everything in one). The NYT has initial House framework here.
Of note for nonprofits, Sen. Tim Scott has sponsored The Charitable Act, which would allow for a top-of-the-line deduction for all taxpayers who file, regardless if they itemize or not.
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State House Update
The House and Senate are in full swing. After a few weeks early on spent in Committee meetings to get bills moving, there is now action on the floor of both Chambers, plus continued committee work.
There two primary issues we want to flag for you at the State House, but first here's a quick list of some of the highlights thus far from the Legislature:
- The House Ways & Means Committee has adopted their version of the state budget. The House will debate the budget the week of March 11.
- The House has adopted its energy bill, the SC Energy Security Act.
- The Senate has passed its school choice bill earlier in January. The House Education & Public Works Committee passed it last week and it will hit the House floor the week of February 25.
H.3927 - "Ending Illegal Discrimination & Restoring Merit-Based Opportunity Act"
Filed on February 6, this bill directs state agencies, political subdivisions of the state (cities, counties, and school districts), and institutes of higher education to cease DEI practices and programs. It requires these public bodies to attest to their adherence to this directive before state funds can be spent, and attest to their compliance for the preceding year.
It also directs these public bodies from providing funds to grantees and contractors and/or subcontractors who engaged in DEI efforts - even if state funds are not related to or supporting those DEI initiatives.
This bill is likely to get a subcommittee hearing in the coming weeks and we will keep members posted. We are in communication with legislators, as are a number of our members.
Budget Proviso 117.de
This proviso prohibits state agencies and its political subdivisions and institutes of higher education from using state funds for DEI-related initiatives. It was adopted by the House Ways & Means Committee as part of the state budget that will head to the House floor March 11.
Important to note that, unlike H.3927 above, this Proviso does not seem to implicate grantees, nor does it restrict any funding beyond the state funds appropriated.
You can watch the Committee debate this Proviso during their February 18th meeting over on the state house video archive page (Feb 18 @ 3:00PM - around the 23-min mark).
What's a Proviso? A proviso is a one-year law that is attached to the budget. It essentially restricts funds in the section of the budget they are attached to. For example, an agency could get $1 million but a proviso may say, "$10,000 in this FY must go to fund XYZ project, and cannot be used for red paint." |
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How We Are Approaching This Work
Together SC's Board of Directors has adopted an updated policy on Advocacy & Public Policy, as well as our 2025-2026 Public Policy Agenda - and it is all hyper-focused on protecting and advancing your ability to operate as a nonprofit in line with best practices.
We firmly believe that nonprofits are best suited to serve communities by remaining nonpartisan in law, fact, and purpose.
We will work collaboratively with our members and our elected officials to ensure that our advocacy work has real impact. We will employ pragmatic and bipartisan efforts to raise the sector's voice.
We will highlight the benefit nonprofits bring to our communities every day and advocate for the protection of our industry's best practices.
We recognize that advocacy is a marathon, not a sprint. There will continue to be moments like these ahead, and we will help our sector rise to meet them.
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SEE YOU AT THE SUMMIT!
For those attending the SC Nonprofit Summit this week, we can't wait to see you! Around 600 of you are joining us for a SOLD OUT Summit in Columbia, and we are so excited for our time together.
Note that our staff may be slow to respond to emails during these next few days.
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