Written by Sarah Weaver, J.D., CICF General Counsel & Chief of Staff
For nonprofit organizations committed to serving the most vulnerable populations in our communities, the start to 2025 has been a draining experience.
In a recent listening session with Central Indiana nonprofits, CICF collaborative members heard painful and alarming testimony about the real and potential impacts of changes in funding priorities at the federal and state levels and cuts to equity-focused programming.
CICF leadership has joined other area foundations and national coalitions to assess how best to take on these new and evolving challenges. It has also joined the Community Foundation Awareness Initiative, which has focused recently on a comprehensive federal lobbying effort in Washington.
From the foundation perspective, CICF is expressing to lawmakers that donors and foundations should be free to give to causes they care about without concerns of reprisal or retaliation. Through this commitment, we remain devoted to a more broadly prosperous Central Indiana.
In the meantime, entities who directly serve the most vulnerable in our community need to know how best they can endure an era of uncertainty.
Here are three approaches to consider:
1. Ensure Compliance with Current and Potential Legal Requirements, Especially around Language
The work of fostering a more equitable Hoosier state must continue. We encourage every organization to follow developments at the state and federal level, as changes happen daily (or hourly). Even so, with legal challenges piling up just as fast as new orders and legislation, there’s no telling where we end up.
For that reason, look for ways to continue your work without opening yourself up to potential attacks on your services. Ensure your policies, communications, and other materials are updated to reflect current, and possibly potential, legal requirements. When sharing messages about your work, quantify and communicate economic benefit and community-wide impact. In program evaluation, utilize both quantitative metrics as well as individual stories of impact.
Every organization must decide its own tolerance for risk. Consider your dependence on federal and state funding, access to legal resources, your fundamental mission and programs, ability to diversify your funding streams, and any impact that moderating—or not moderating—language may have on private sources of funds.
In speaking to many nonprofits’ fears, Bernice King—daughter of Martin Luther King, Jr., and head of the King Center for Nonviolent Social Change—gave some valuable perspective to Chronicle of Philanthropy recently. Using powerful moments in history, she gave examples of major social progress achieved during restrictive eras. The most important thing, she says, is for nonprofits to continue the work no matter what: “Show me. Don’t tell me, just show me who you are.”
We also recommend this high-level messaging guidance from the Harvard Business Review.
2. Engage in Advocacy (Within Legal Limits)
This section is prefaced with the understanding that many nonprofits are stretched too thin to even consider taking on additional work. However, to the extent you can, consider engaging in advocacy, especially at the state and local levels.
Contrary to popular belief, 501(c)(3) public charities are permitted to undertake advocacy work, so long as it does not constitute a substantial part of the organization’s activities. If organizations are vigilant about compliance with lobbying restrictions and requirements, 501(c)(3) public charities can and should attempt to exert influence on legislation that may impact their work or the community they serve.
Activities that are not generally considered lobbying include:
- Providing testimony in response to an official request by a legislative body;
- Contacting executive, judicial, and administrative bodies on matters other than legislation;
- Conducting and publishing nonpartisan analysis, study, or research;
- Discussing broad social issues, so long as specific legislation is not discussed; and
- Contacting legislative bodies about legislation that is related to the organization’s existence or status (“self-defense” lobbying).
Lobbying can take the form of:
- Contacting—or urging the public to contact—legislators about proposing, supporting, or opposing legislation;
- Advocating for or against legislation; and
- Contributing or lending money on favorable terms to an entity that lobbies.
Note: an organization’s activities may be lobbying even if specific legislation is not mentioned (e.g., publishing articles appealing to the public to react to certain general policy positions without mentioning legislation).
When an organization lobbies, certain registration and reporting requirements apply and definitions of what constitutes lobbying may differ. Check your local, state, and/or federal rules or consult with a trusted expert for guidance.
Also, consider partnering with a sympathetic nonprofit already engaged in lobbying. It can offer guidance with respect to requirements, and oftentimes more can be accomplished when nonprofits team up. You could also reach out to a large organization with a broad mission (like CICF or United Way of Central Indiana) to find out what lobbying they may be doing. Even if there’s not an opportunity to work with them directly, they may be able to help you find other resources.
3. Clean Up Your Organizational Operations and Administration
During the day-to-day work of serving your community, adhering to best practices for finance, data security, and board governance can fall to the wayside. In this time of heightened scrutiny, performing cleanup of your operations is critical. Non-compliance may serve as a pretext for a government entity or other organization to target your nonprofit.
Ensuring your financial policies and practices are up-to-date and consistent with best practice is critical always—and now more than ever. The current regulatory environment may very well impose additional financial requirements on nonprofits, which may include reporting of:
- Quarterly financial statements;
- Detailed breakdowns of revenue sources and expenditures;
- Executive compensation disclosure; and/or
- Reports on the use of restricted funds.
Data privacy and security standards may also tighten, so the following actions could help prepare your organization:
- Review and enhance your data management policies and practices—particularly for sensitive information like donor records;
- Enact stricter data encryption standards;
- Mandate reporting of data breaches;
- Request explicit consent from donors and beneficiaries for data use; and
- Conduct regular data protection practice audits.
Lastly, creating new standards for your board members can also create an opportunity for renewed board engagement. Governance cleanup may include:
- Ensuring sufficient board member onboarding and ongoing training;
- Conducting regular board and executive performance evaluations;
- Verifying that your Directors and Officers insurance coverage is in place with sufficient limits based on the needs of your organizations; and
- Enhancing conflict-of-interest, confidentiality, and other board policies.
Yeah, it’s a lot. And we understand how thinly many nonprofits are stretched right now, as well as the high level of fear pervading the sector. But while we hesitate to put more on your plate, anything you can do to protect your organization and the communities you serve can help insulate you from uncertainty.
The work you do is important; in some cases, it is literally life-saving. We want to ensure that you can continue to do it.
Reach out, ask for help, collaborate. We’re all in this together.
The information contained herein is for general purposes only and does not constitute legal, financial, or other professional advice. Legal, regulatory, and legislative changes occur frequently, and, in this political climate, often without warning; the author believes the resources cited to be current as of March 26, 2025. The views expressed herein are solely those of the author and Central Indiana Community Foundation, Inc. and do not represent the views of any other entity, including those that are affiliated with or partners of Central Indiana Community Foundation, Inc.
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