Get Beyond Politics by Balancing Philanthropic Focus

There could be a temptation to focus on politics solely as President Donald J. Trump prepares to lead a second administration. However, while it is understandable in a seemingly polarized nation, it would be a mistake for nonprofit leaders to expend their energy on division. At this moment, nonprofit leaders must work to ensure that the changes, which will inevitably come to pass, protect its causes.
Make no mistake about it. Significant changes will affect many social issues. But, the American public legitimately voted for Trump, and we have to accept these changes with kindness and compassion. When change happens, no matter the change involved, it causes stress, anxiety, concern and worry. These changes will affect people on both sides of the aisle.
Therefore, it’s incumbent that nonprofit leaders refocus sharply on their mission. For instance, if your programs have expanded beyond your mission, this would be the time to retrench and focus on mission-only initiatives. We have yet to see how the federal and state legislative changes will transform the United States. Still, nonprofit leaders must keep an eye on areas that will undoubtedly impact them, which is why it’s vital to focus on a few areas.
Government Defunding
The nonprofit sector will see increased regulatory threats to the 501(c)(3) status. Organizations that address diversity, equity and inclusion (DEI) efforts may experience increased scrutiny and pressure. The Department of Governmental Efficiency may affect other areas too. As a result, some organizations are reconfiguring and refocusing more quickly.
For example, nonprofits supporting areas affected by political changes to come may want to focus on major donors and individual supporters. They should steer away from corporations and many foundations because these entities will conform, as we have seen. Remember, the top interests of a corporation, in particular, are profits and shareholder value.
Potential Regulatory Threats
There will be challenges for some organizations, as I mentioned earlier. However, while these organizations will likely have to deal with federal scrutiny and the potential loss of their 501(c)(3) status, these matters will not involve the vast majority of nonprofits. So, while some people on social media and the industry will debate these matters, it’s vital to keep things in perspective and to, again, stay sharply focused on the organization's mission and work.
All organizations should promptly assess their programs and practices and take immediate action to mitigate any risk. As an example, one area that all nonprofits should review is their hiring practices. We know that the presidential administration and many state legislatures may end diversity in hiring and recruitment practices. Therefore, hiring legal counsel and recruitment and human resources management experts makes sense so organizations understand potential actions and their rights.
The Growing Scrutiny of Donor-Advised Funds (DAFs)
As many in the philanthropic sector know, there is a lot of money parked in donor-advised funds (DAFs). In fact, it exceeds $250 billion. People on any side of the political aisle can agree that these funds, which have already provided tax deductions for donors, can do so much for so many in our communities. Why is all this money earning money for wealthy managers instead of making an impact?
Expect the IRS to push to accelerate the distribution of those funds. As things evolve with conditions that may hurt American businesses and increase household expenses, the public will push more significantly as they turn to charity. In turn, expect nonprofit leaders and activists to clamor for an acceleration of the distribution of DAF donations.
Increase in Cryptocurrency Donations
As we know, the broader public and donors have been ambivalent about embracing cryptocurrency due to its volatility. But, while it presents challenges, it's fair to say that the Trump administration is going all in on crypto, with intentions to make the U.S. the “crypto capital of the planet.” As a result, especially with younger and male donors, nonprofits and their fundraising teams should prepare to explore platforms to ensure their organizations are prepared to accept cryptocurrencies.
Further, nonprofits need to understand that the world has largely moved away from checks and cash and that the way donors give is almost entirely digital, including some using cryptocurrency. Nonprofits should embrace the good along with the challenges, as crypto may be a great opportunity.
Changes in Giving Behavior and Donor Giving
Finally, one of the elements of the second Trump administration that nonprofits will have to grapple with is the changes in donor behaviors and even giving. The digital transformation will only accelerate with counsel such as Elon Musk, Vivek Ramaswamy and JD Vance as vice president. Musk and Ramaswamy will not only remove as many federal employees as possible, but they will also seek to digitize and streamline whatever they’re able to do.
As a result, expect major donors to retrench. For example, don't expect donors to support causes that are considered to go against the ideas of the administration. It won't happen as no one wants any federal scrutiny — particularly major donors. However, there will be others who will step up if your storytelling is about saving lives and helping all people — and not considered divisive.
Nonprofit leaders and fundraisers should remain flexible and pay attention to things that affect donor confidence. Monitor trends, economic news and regulatory changes. Further, it makes sense to ensure a nonprofit has a substantial reserve of at least six months of operating revenue and to seek to diversify income (e.g., crypto) and donors. Stay focused on the mission, concisely articulate the nonprofit story and be flexible.
The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Related story: Prepping Your Nonprofit's Fundraising Strategy for Trump 2.0
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Paul D’Alessandro, J.D., CFRE, is a vice president at Innovest Portfolio Solutions. He is also the founder of High Impact Nonprofit Advisors (HNA), and D’Alessandro Inc. (DAI), which is a fundraising and strategic management consulting company. With more than 30 years of experience in the philanthropic sector, he’s the author of “The Future of Fundraising: How Philanthropy’s Future is Here with Donors Dictating the Terms.”
He has worked with hundreds of nonprofits to raise more than $1 billion dollars for his clients in the U.S. and abroad. In addition, as a nonprofit and business expert — who is also a practicing attorney — Paul has worked with high-level global philanthropists, vetting and negotiating their strategic gifts to charitable causes. Paul understands that today’s environment requires innovation and fresh thinking, which is why he launched HNA to train and coach leaders who want to make a difference in the world.