Trump's admin targets environmental NGOs' tax-exempt status

President Donald Trump’s administration is reportedly considering actions to revoke the tax-exempt status of environmental and ethics watchdog organizations. These groups, crucial for climate and social advocacy, could face financial and operational challenges if such a move materializes.

Sources familiar with the issue told Bloomberg Law that environmental organizations, bracing for an executive order, are preparing legal responses. The order could come as soon as Earth Day, April 22.

Tax-exempt status allows nonprofits to accept tax-deductible donations, an essential source of funding for many environmental groups. Losing this status could deal a significant blow to their fundraising abilities.

Trump mentioned during a White House event that his administration is reviewing tax-exempt status not only for environmental groups but also for organizations like Citizens for Responsibility and Ethics in Washington (CREW). Trump criticized CREW, stating, “It’s supposed to be a charitable organization. The only charity they had is going after Donald Trump.”

Legal action in motion

CNN was first to report, Environmental groups are preparing for a potential legal battle. Kieran Suckling, executive director of the Center for Biological Diversity, said, “We’ve got a crack legal team and will have him in court within 24 hours.”

Other organizations are reviewing their funding sources, preparing media responses, and discussing legal strategies. There are also concerns the order may extend to more severe measures, including the seizure of funds or labeling groups as "domestic terrorists."

The administration’s attack on nonprofit organizations is not a new tactic. Previous moves have targeted universities, law firms, and foundations that opposed Trump’s policies.

Harvard University, for example, is also under scrutiny. Trump threatened to revoke its tax-exempt status over its refusal to comply with specific policy demands. The university has resisted these demands, claiming that no government should dictate what universities can teach or whom they can admit.

Trump’s critics see these actions as part of a broader strategy to punish those who challenge or oppose his policies.

Impact on nonprofits and legal risks

The tax-exempt status for nonprofits under Section 501(c)(3) is crucial for funding, particularly for organizations focused on social issues and environmental activism. Legal experts have pointed out that the process of revoking such status is complicated and would likely face court challenges.

The Internal Revenue Service (IRS) has specific protocols for revoking tax-exempt status. Despite Trump's remarks, it remains uncertain whether such action would survive legal scrutiny, especially given the limitations on executive power in such matters.

As environmental groups prepare for a potential executive order, the situation highlights a growing concern over government interference in nonprofit activities, especially those related to climate change and political advocacy.

• Trump’s threat to revoke Harvard’s tax-exempt status has caused alarm among environmental organizations.

• Environmental advocates, including Bill McKibben, have expressed concerns that this could be part of a larger effort to dismantle climate advocacy.

• The IRS has the authority to revoke tax-exempt status but must follow due process, which includes audits and appeals.

Nonprofits are not just worried about losing funding but about broader implications for their ability to function independently. The stakes are high, with many groups fearing that this could set a dangerous precedent for future administrations.

The administration has yet to confirm whether such an executive order will be issued, but the situation continues to develop, with legal experts and nonprofit leaders closely watching for any official moves.

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