Deregulation under the Trump Administration and Its Impact on the Non-Profit Sector Introduction

Donald Trump touted deregulation as one of the issues he would push for during his campaign leading up to the 2016 election. Once placed in the White House, he held true to his push for deregulation and that policy has had some impact on the non-profit sector in the US. This paper will show how that impact has benefited the nonprofit sector in some ways and how in other ways it remains to be seen whether negative fallout will occur or not. Specifically this paper will explain how deregulation under the Trump Administration is impacting the non-profit sector in various beneficial ways, such as

by allowing nonprofits to keep anonymous the names of donors; and by capping the amount federal agencies can force nonprofits to spend—the idea being that this will prohibit agencies from shifting costs for regulatory ambitions onto nonprofits and other organizations. It will also explain, however, that there are always unforeseen consequences to deregulation that can have adverse impacts on nonprofits, particularly those in the environmental sector, and so one must see what these outcomes are over time.

Disclosure of Donors’ Names

Under the Trump Administration’s deregulation policy, certain tax-exempt organizations—those described in section 501(c), excluding those described in 501(c)(3) and section 527 organizations—are no longer required to file personally identifiable details of their contributors in their annual tax returns (Brookings Institute, 2020). This means that donors can stay anonymous and organizations do not have to disclose who is giving financial support to them unless they are directly compelled to by the government. They must keep this information in their records, but they are not longer required to report these records annually. That is a big win for nonprofits because the loss of anonymity can sometimes prevent big donors from making the kind of donations that can make a big difference to these companies.

The fact that some nonprofits will no longer have to identify all their donors for the IRS is a win for these organizations...

However, this rule only impacts 501c organizations, which can receive unlimited donations from individuals, corporations and unions. Now these nonprofits no longer have to disclose those identities in their tax filings—but they still have to maintain them in their records and provide them if requested. This means that big donors can collaborate more closely with nonprofits without worrying that every donation they make will be made public, which is good for nonprofits because it allows them to act more independently from the government. In a free market system, independence from the state is one of the most important factors. Big donors can help nonprofits to have a greater influence in society and are more inclined to do so the more independent they perceive these organizations to be.
Executive Order 13771

Another beneficial way deregulation under the Trump Administration positively impacts nonprofits can be seen with Executive Order 13771. Executive Order 13771 calls for a new regulatory budgeting process that will aim to control the overall cost of every agency’s regulations: President Trump wants an “annual cap on the additional cost burdens that an agency is allowed to impose on the U.S. economy” (Belton & Graham, 2019, p. 15). Belton and Graham (2019) show that President Trump’s deregulation with EO 13771 is aimed at curbing the abuses of federal agencies by capping their ability to put costs on nonprofits and other organizations. The reason for this cap would be that agencies are capped in terms of public funding—i.e., money they can spend allotted them via Congressional appropriations—and so in order to achieve their own policy ambitions these agencies shift these costs onto nonprofits and other organizations. The EO intends to put a stop to that practice and thus liberates nonprofits from the iron grip of regulatory agencies that, in Trump’s eyes, hinder economic growth.

This EO essentially limits the extent to which the various agencies and departments at the federal level can restrict nonprofits with prohibitive costs associated with their own regulatory schema. The Trump Administration is dedicated to deregulation is it is believed…