Giving Compass' Take:
- Changes in government administration can have funding impacts on the entire nonprofit sector depending on how ideological approaches shape policy decisions.
- How can donors best support nonprofits if they don't necessarily have government support?
- Here are five things nonprofits want donors to know.
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For many nonprofits, especially those with local focuses, it might not seem like a new federal administration will make a day-to-day difference for them. In truth, a change at the top can impact nonprofits of all sizes and scopes.
In many ways, donors are activists. They observe the world and then respond to those insights by investing in the causes they feel are most urgent. Even if you’re running a nonprofit that views itself as nonpartisan, you’ll still likely have to adapt to this new political reality. Messaging will likely have to change, and the specifics of where your efforts go may need to shift.
As a co-founder of the Human Heritage Project, I’m quite familiar with the impact a new administration has on nonprofits and the pressing need to adapt for the future. And there’s a way to continue thriving.
One of the most significant changes nonprofits will likely see soon isn’t tied to any specific policy. Instead, it will be an ideological shift in how the administration approaches trust in science and public institutions through transparent communication. The politicization of the pandemic and the continued rise of misinformation have made communication more fraught and complex.
As a result, the new administration is trying to find ways to restore trust, revisiting how it educates the public. I believe that nonprofits can aim to adjust their own messaging and mission statements to ensure clarity as well.
Beyond this messaging pivot, there are potential policy changes that could have a financial impact. For example, according to the Chronicle of Philanthropy, there is talk of expanding non-itemized tax deductions to a cap of $8,000 for married couples — quite a bit higher than the cap of $300 introduced in the CARES Act last year. If enacted, this could make a huge difference for organizations trying to find alternatives to fee-for-service approaches.
Read the full article about impact of government on nonprofits by Kevin Xu at Forbes.