How New Executive Orders May Impact Nonprofits: What You Need to Know
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The first few weeks of 2025 have brought significant changes for many nonprofit organizations, particularly those engaged in Diversity, Equity, and Inclusion (DEI) initiatives, LGBTQ+ services, international aid, immigration, education, and health and human services. A series of new executive orders are reshaping federal funding priorities, compliance requirements, and eligibility for a broad array of programs critical to nonprofits.
For many nonprofits, this has created uncertainty about the future of their work, funding, and partnerships. In this post, we’ll break down some of the key executive orders impacting the nonprofit sector, discuss potential challenges, and explore practical steps organizations can take to navigate these changes.
While many of these policies are still evolving and will likely face legal challenges, now is the time for nonprofits to assess their risk, strategize for the future, and strengthen their networks.
Changes to DEI and Nonprofit Funding
One of the most widely discussed executive orders, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” introduces several changes that may impact nonprofits working in DEI and equity-focused programs. This EO:
Directs the Office of Management and Budget (OMB) to remove all DEI-related language from federal guidance.
Requires that federal grantees certify they do not run programs that promote DEI in a way that violates “anti-discrimination” laws—though what this means in practice is still unclear.
Calls for investigations into large nonprofits, universities, and associations engaged in DEI initiatives.
A related order, “Ending Radical and Wasteful Government DEI Programs and Referencing,” directs federal agencies to terminate all DEI programs they currently administer or fund.
What This Means for Nonprofits
If your organization receives federal funding for DEI-related programs, racial equity work, or culturally tailored services, it’s important to assess whether these changes could affect grant eligibility or future funding opportunities.
Some organizations providing services to historically marginalized communities may face uncertainty about whether their work qualifies as DEI under these new definitions.
Even nonprofits without direct federal funding may see ripple effects, as private sector donors and foundations reevaluate funding priorities in response to these changes.
Many organizations have already filed lawsuits challenging these changes, meaning some policies may be delayed or blocked while courts review them. Nonprofits should stay informed, review compliance requirements, and explore alternative funding sources in the meantime.
Impacts on Gender, Sexual Orientation, and LGBTQ+ Services
Another set of executive orders introduces new restrictions related to gender identity and LGBTQ+ services. Key Changes include:
Rescinds EO 13988, which previously ensured that federal agencies upheld protections based on gender identity and sexual orientation.
Requires federal agencies to define sex strictly as male or female and prohibits the collection of gender identity information in federal programs.
Prohibits federal funding from supporting programs that reference LGBTQ+ inclusion or gender diversity.
Potential Impact on Nonprofits
Organizations that provide LGBTQ+ services, gender-affirming care, or related programming may see funding disruptions or eligibility restrictions.
Changes to government data collection may impact research and evaluation. For example, the removal of gender-inclusive categories from surveys like the Youth Risk Behavior Survey (YRBS) could make it harder to track trends and advocate for resources. In addition, data previously accessible to the public are being taken down as federal agencies work to be in compliance with the EO, leaving many nonprofits without the data and resources they rely upon to do their work.
Nonprofits receiving federal funding may need to review data collection tools—such as enrollment forms and program evaluations—to ensure compliance with new requirements with respect to how data (particularly on sex and gender) are collected on individuals.
Nonprofits receiving federal funding may need to consider how their website, promotional materials, communications, programs, activites, and other material may need to be altered to comply with this EO.
Federal agencies have already started implementing these changes, and some government websites—including the CDC’s gender-inclusive resources and datasets—have been modified or removed.
Legal responses are ongoing, and organizations working in this space should be proactively reviewing funding agreements and preparing for potential shifts in eligibility requirements.
Other Key Areas of Impact
International Aid & Humanitarian Work
A 90-day pause on foreign aid disbursement may delay or reduce funding for nonprofits working in international development, disaster relief, and refugee assistance. In addition, many USAID and State Department contracts may be reassessed or eliminated, leading to potential defunding of specific projects.
Climate & Environmental Programs
Rollbacks of Inflation Reduction Act (IRA) provisions may impact clean energy projects, sustainability initiatives, and nonprofit-led climate and environmental justice advocacy efforts. Nonprofits aiming to use IRA funding for capital projects may see those funding opportunities eliminated.
Tax incentives for electric vehicles and renewable energy programs have also been scaled back.
Immigration & Human Services
An executive order directs agencies to review and potentially restrict funding for nonprofits providing services to undocumented immigrants.
Many nonprofits do not track immigration status, raising concerns about how enforcement will be applied in practice.
What Nonprofits Can Do Next
1. Stay Informed & Engage in Advocacy. Follow updates from legal experts tracking these changes, including the National Council of Nonprofits who has a great toolkit that explains the impact of Executive Orders on the nonprofit sector. It’s also important to consider joining coalitions advocating for nonprofit funding and policy protections.
2. Diversify Funding Sources
It will be importnat for organizations to explore alternative funding options from private foundations, corporate sponsors, and local/state governments. Storytelling is so importnat right now.
3. Review Compliance & Organizational Policies
If you receive federal funding, review grant agreements and gather information from your federal agency representatives and offers to understand potential changes and risks to your organization. Prepare for possible changes in reporting requirements and program eligibility.
For many nonprofits, the past few weeks have been a whirlwind of policy changes, funding questions, and strategic decisions. These executive orders have created uncertainty, but they do not change the critical role that nonprofits play in serving communities, advocating for those in need, and driving meaningful social impact.
If your organization is feeling the impact of these policies, know that you are not alone. The nonprofit sector has always been resilient, adapting to challenges and continuing to serve those who rely on its work.
Many of these policies are still subject to legal challenges, and advocacy efforts are ongoing. There are still opportunities to shape the conversation, secure alternative funding, and strengthen partnerships that align with your mission.
We’ll continue following these developments and providing resources to help you stay informed. If your organization has been affected, I encourage you to share your experience—whether through advocacy networks, peer discussions, or nonprofit associations working to track and respond to these changes.
Thank you for the work you do. Your commitment to your mission and your community matters now more than ever.
Note: this blog post is for informational purposes only does not, and is not intended to, constitute legal or medical advice. Readers of this blog post should contact their attorney to obtain advice with respect to any particular legal matter.
