Webinar Alert!

Join a webinar on the Budget Reconciliation and the Charitable Sector, tomorrow, May 29 from 2 – 3 pm. This session is being sponsored by the Council on Foundations, Independent Sector, National Council on Nonprofits, and the United Philanthropy Forum (UPF).  

Federal Legislative Update

Thank you to the National Council of Nonprofits (NCN) for the following news, updates, and resources.

The House of Representatives voted Thursday to approve the “One Big Beautiful Bill Act,” a major tax bill that Republicans hope to enact by summer. The bill now heads to the Senate, where several changes to the bill are expected. Read NCN’s updated analysis of the revised bill.

Nonprofit organizations should contact their members of Congress – especially Republicans – to urge them to protect the nonprofit sector in the tax bill.

Your advocacy works! Nonprofit organizations successfully advocated for congressional leaders to remove a provision that would have granted unprecedented authority to the Executive Branch to revoke nonprofit tax-exempt status without due process. There is more work to do. The current bill still includes several provisions that could significantly harm nonprofit organizations and the people they serve.

Sign a National Letter

Urge Congress to remove harmful provisions in the tax bill targeting nonprofit organizations. This national letter is led by National Council of Nonprofits, Council on Foundations, Independent Sector, and United Philanthropy Forum.

Sign On

Contact Your Members of Congress

Urge them to protect nonprofits and their ability to serve their communities in the tax package.

Use NCN’s Email Template

Additional Resources from NCN:

Updated Chart on Tax Provisions

Chart of implications of specific sections in the draft tax legislation including revoked items.

View the resource

Major Tax Package Heads to the Senate 

Analysis of the draft tax legislation and suggested actions for nonprofit advocates.

View the resource

Factsheet on Tax Reconciliation

Overview of how and why nonprofits should be protected in the tax reconciliation process.

View the resource

The latest findings from the Social Impact Staff Retention project are here! If you’re short on time, check out the 2025 infographic for a quick summary. Learn why nonprofit staff look to leave their current roles and why they stay.

This project is fueled by a deep commitment to the nonprofit sector—helping decision-makers understand what practitioners are experiencing so they can lead more effectively.

You can also hear more insights from the project in recent interviews on:

• Nonprofit Lowdown with Rhea Wong
• What The Fundraising with Mallory Erickson

President Trump’s newly released Fiscal Year (FY) 2026 “skinny” budget outlines sweeping federal spending cuts that would deeply impact public services and nonprofit organizations. The proposal calls for a 22.6% ($163 billion) reduction in domestic discretionary spending, while increasing defense funding by 13%. The budget slashes critical programs in education, housing, environmental protection, public health, and more, while openly targeting nonprofit institutions as “wasteful” and ideologically driven. If enacted, these cuts could have severe consequences for vulnerable communities across the country.

Key Highlights from the Budget Proposal

President Trump’s FY2026 “skinny” budget proposes:

• 22.6% cut ($163 billion) to domestic discretionary spending
• 13% increase in defense spending
• Increased funding for homeland security

OMB Director Russ Vought explained that the administration believes federal spending is “laden with spending contrary to the needs of ordinary working Americans” and criticized funding for nonprofit organizations and institutions of higher education as advancing “radical gender and climate ideologies.”

The budget identifies and denigrates specific nonprofit organizations as “wasteful,” “liberal,” and pushing a “leftist agenda.”

Proposed Cuts to Programs and Services

The following departments and programs would be among the most severely affected:

• Education, HUD, Labor, Interior, EPA, USAID
• Infrastructure Investment and Jobs Act: cut by $15.2 billion
• Energy efficiency programs: cut by $2.6 billion
• FEMA preparedness grants: cut by $646 million
• Substance use disorder programs (SAMHSA): cut by $1.06 billion
• EPA clean and drinking water support: cut by $2.46 billion
• Refugee assistance: cut by $650 million
• Fair housing enforcement: cut by $60 million
• Low-income heating assistance (LIHEAP): cut by $4 billion
• Community Services Block Grants: cut by $770 million
• Rental assistance & affordable housing: cut by over $30 billion
• AmeriCorps and other workforce programs: proposed elimination

Escalating Tensions with the Nonprofit Sector

The budget continues a trend of executive actions aimed at weakening the nonprofit sector:

• In January 2025, the White House attempted to freeze all federal financial assistance, prompting the National Council of Nonprofits (NCN) to file litigation.
• The administration has terminated contracts, rescinded grants, and refused to allocate congressionally approved funding.
• President Trump threatened to revoke Harvard University’s nonprofit status.
• DOGE staff were assigned to oversee the Vera Institute, an independent nonprofit receiving federal funding.

What’s Next?

While the skinny budget signals the administration’s funding priorities, Congress holds the power of the purse. A more detailed budget is expected later this month, followed by the start of the FY2026 appropriations process in the House and Senate.

Congress must pass final spending bills or a continuing resolution (CR) by October 1 to avoid a government shutdown.

Call to Action

As federal funding decisions take shape, nonprofit leaders, advocates, and community members must:

• Stay informed
• Connect with partners and coalitions
• Engage with elected officials

Our collective voice is critical in protecting the programs and institutions that ensure equity, safety, and opportunity in communities across the country.

Governor Glenn Youngkin has announced a $900 million reduction in the state’s budget as a precautionary measure in response to anticipated economic uncertainty tied to the federal policy direction of President Donald Trump’s new administration.

Budget Overview

The cuts primarily target one-time capital improvement projects at public colleges and universities that have not yet begun construction. Youngkin characterized the move as fiscally responsible, citing potential federal actions such as workforce reductions, spending cuts, and new trade tariffs that could significantly impact Virginia’s economy, particularly its federal workforce and contractor base.

Political Response

The budget revision has drawn mixed reactions from lawmakers. Republican leaders largely praised the decision as a prudent step to prepare for fiscal turbulence. In contrast, Democratic leaders criticized the governor for acting unilaterally without broader consultation, raising concerns about transparency and legislative oversight.

Investments Maintained

Despite the cuts, the revised budget preserves key investments in:

• Maternal health initiatives
• Disaster relief efforts
• K–12 public education
• Water infrastructure, including a $25 million allocation to address water treatment concerns in Richmond

Youngkin noted that the deferred capital projects are not off the table permanently. He indicated a willingness to revisit these proposals in a supplemental budget later this year, allowing the General Assembly to take them up during the 2026 session.

Why It Matters

With Virginia’s close ties to federal employment and contracting, the state is particularly vulnerable to national policy shifts. This budget maneuver signals a strategic, though politically contentious, effort to shore up financial stability in uncertain times.

April 2025

At the Center for Nonprofit Excellence – Virginia, we are proud to stand alongside you as champions and advocates for the nonprofit sector. We recognize that this year has brought an overwhelming amount of change and uncertainty. Information is coming at us quickly, and many of these shifts—particularly in government funding—have been detrimental to nonprofits’ ability to meet urgent community needs, from child care and food security to affordable housing and mental health services.

As we work through this complex moment together, we encourage nonprofit leaders to prioritize open conversations with funders—local, state, and philanthropic—about how to strategize collaboratively and think differently in the face of significant funding deficits due to federal or state reductions. Now is the time to assess risks, adapt creatively, and lean on our collective strength to sustain our missions.

Federal Policy Developments

Courtesy of the National Council of Nonprofits (NCN)

Executive Orders: What Nonprofits Should Know

The NCN’s Executive Orders Affecting Charitable Nonprofits chart now includes a helpful “status” column that clarifies which executive actions are in effect, under legal challenge, or pending review.

Additional Resources:

• Nonprofit Risk Assessment Checklist
• General FAQs on Executive Actions

Legal Spotlight: Woonasquatucket et al. v. USDA

In March 2025, NCN and the Woonasquatucket River Watershed Council, among other plaintiffs, filed a lawsuit against the U.S. Department of Agriculture. The case challenges new federal grant policies that restrict nonprofit access to public funds without clear justification or due process.

• NCN Lawsuit Overview
• WRWC’s Statement

Medicaid Cuts & Federal Budget Threats

From The Commonwealth Institute

The U.S. Senate is advancing a budget framework that could lead to deep cuts to Medicaid, potentially affecting hundreds of thousands in Virginia.

A report by CBPP estimates $880 billion in proposed cuts would lead to:

• Reduced benefits
• Lower enrollment
• Decreased provider payments

What’s at Risk for Virginia:

• Over 874,000 Virginians may lose coverage due to harsh new work reporting requirements.
• A per capita cap could shift $16–27 billion in costs to Virginia over 10 years.
• Lowering the federal Medicaid match from 90% to 51% would cost $2.28 billion in 2025 alone.
• Vital services—like addiction treatment, foster care screenings, and disability supports—would be impacted.

“We have to fight for Medicaid. We have to fight for SNAP.” — Rep. Suhas Subramanyam (VA-10)
“Over 600,000 working Virginians could be thrown off Medicaid rolls.” — Del. Rip Sullivan (D-Fairfax)

Action Needed: Contact your members of Congress. Advocate for Medicaid and SNAP.

Virginia Budget & Policy Updates

Via The Commonwealth Institute & Virginia Funders Network

General Assembly Reconvened: April 2

Lawmakers reconvened and rejected most of Governor Youngkin’s proposed amendments to the 2025–26 budget. This includes cuts to education and Medicaid planning.

What Was Protected:

• Lifting the arbitrary cap on funding for school support staff
• Increasing the refundable EITC for low-income working families
• Rejected: Medicaid contingency planning tied to federal cuts
• Rejected: Expanded private school voucher program

Budget Comparison Tool
TCI Budget Response
Virginia Budget Process Visual

What You Can Do

• Talk with your funders. Start honest, creative conversations.
• Scenario plan with your board and leadership.
• Share tools and resources with your team.
• Advocate. Call your elected officials. Join coalitions.
• Center well-being. Caring for your self and your team is part of resilience.

You’re Not Alone

The challenges are real—and so is our shared commitment to community. If you’re feeling overwhelmed or unsure how to respond to these changes, reach out. CNE-Virginia is here to help—whether it’s breaking down policy, identifying action steps, or just brainstorming next moves.

Together, we will keep showing up for the people and places that depend on us.

Mariane Asad Doyle

Executive Director, CNE

Information and updates on a new executive order restricting voting from the National Council of Nonprofits.

President Trump just issued an executive order affecting voting: Preserving and Protecting the Integrity of American Elections. The EO is very broad and restricts access to voting by requiring proof of citizenship, changing voting standards and guidelines, removes federal funding to states for noncompliance, and prohibits foreign nationals from contributing or donating in elections.

Of particular concern, Section 8: Preventing Foreign Interference and Unlawful Use of Federal funds directs the Attorney General to “prioritize enforcement” to “prohibit[] lobbying by organizations or entities that have received any Federal funds”. Organizations and entities are not defined and therefore could apply to nonprofits that receive federal funds and are lawfully advocating and lobbying for their missions.

We expect the EO to be challenged in court quickly.

More information on the EO:

• Trump signs executive order that will upend US voter registration processes, The Guardian, Mar. 25, 2025.

The EO is modeled after the SAVE Act (H.R. 22), which has been raised by many in the network. More information on the bill:

• SAVE Act Would Undermine Voter Registration for All Americans, Brennan Center, Feb. 11, 2025.

We’ll be updating the Chart soon with the EO. In the meantime, here are the main provisions:

Preserving and Protecting the Integrity of American Elections

• Requires the mail voter registration form to require proof of citizenship.
• Requires recording of the type of document an applicant uses as proof of citizenship.
• Requires identification of “unqualified voters registered in the States”.
• Requires information on foreign nationals who have registered or have voted.
• Requires assessment of citizenship prior to providing voter registration forms for public assistance programs.
• Prioritizes enforcement against noncitizens registering to vote.
• Removes federal funds to states that do not comply.
• Changes voting standards, guidelines, administration, and electronic systems.
• Conditions funding for the states on “uniform and nondiscriminatory standards…that define what constitutes a vote and what will be counted as a vote.”
• Prioritizes enforcement against foreign nationals from contributing or donating in elections.
• Prioritizes enforcement against lobbying by organizations or entities that have received federal funds.

This incredibly helpful checklist from the National Council of Nonprofits (NCN) offers steps you can take if your federal grant funding or contract is terminated.

Read the article and checklist on NCN’s website