Trump's Pause on Nonprofit Funding is All About Speech Regulation

If we set aside the unconstitutionality of Trump’s clumsy efforts to cut off nonprofit funding, would nonprofits have any legal basis to complain? Could they prevent government from withdrawing all financial support?  What if the government – the correct branch, I mean -- withdrew not just all contract and grant funding, but tax exemption too?  Maybe the only part of civil society with a legitimate objection would be religion.  Religious organizations are not entitled to tax exemption but they have a right to freedom from taxation.  It’s a brainteaser I wish I could express mathematically.  Exemption might endorse religion, though it is not explicitly viewed that way.  Taxation will inevitably destroy religion. Theoretically, we may withhold exemption, but we may never tax.      

From a political science perspective, secular nonprofits exist for two good reasons.  First, they allow participation in the pursuit of public good by political minorities.  Nonprofits empower groups with too little voting power to impose the group’s conception of the public good.  The government might favor fossil fuel production more than green energy. Even if government disdains green energy, political minorities can pursue that public good on their own through a nonprofit. And as a matter of democratic expediency, granting tax exemption to political minorities soothes some of their disaffection. It allows them to pursue their conceived public good separately but on a much less publicly funded scale.  It’s obviously good for democracy if political minorities get a consolation prize encouraging their continued democratic participation. 

The second good political science reason for nonprofits is that they allow for wider participation in pursuit of governmentally-defined public good.  Even when the majority decides on a single public good to the exclusion of others, it is still beneficial to utilize a variety of methods by which to pursue that public good.  Government operates in a certain bureaucratic way but it may learn and benefit from the different ways adopted by a variety of nongovernmental groups.  Government prioritizes higher education by supporting public universities, but it does not begrudge, and it even subsidizes, those who do higher education differently via private universities.   No doubt public universities have improved by adopting methods first tried by private universities.

So nonprofits are, by virtue of their diversity of purpose and of methodology, good for democracy.  Although not required to be, nonprofits are probably best when they are anti-majoritarian; if for no other reasons than that government can learn from their contrary ways.  Nonprofits are indisputably good for democracy but only when the government tolerates diversity of purpose or method. There is certainly no Constitutional requirement that government patronize or subsidize nonprofits by contracts, grants or even tax exemption. But it is obvious that a well-functioning democracy should do so even if it is not required.

Co-Presidents Trump and Musk claim that nonprofit recipients are failing stewards of public money and are acting contrary to the national interests. 

The United States Government has provided significant taxpayer dollars to Nongovernmental Organizations (NGOs), many of which are engaged in actions that actively undermine the security, prosperity, and safety of the American people.  It is the policy of my Administration to stop funding NGOs that undermine the national interest.  

I therefore direct the heads of executive departments and agencies (agencies) to review all funding that agencies provide to NGOs.  The heads of agencies shall align future funding decisions with the interests of the United States and with the goals and priorities of my Administration, as expressed in executive actions; as otherwise determined in the judgment of the heads of agencies; and on the basis of applicable authorizing statutes, regulations, and terms.

Presumably, during a period of “review” Trump and Musk will determine that some nonprofits are good stewards and others are not.  Those that are not will be permanently barred from public subsidy.  Universally withholding grants, funding, and even tax exemption if it comes to that, avoids an explicit accusation that the government is denying exemption based on thought, speech, or opinion. Everybody’s money is stopped. Nobody is being singled out for their speech or opinion. But re-issuing subsidies only to those nonprofits who they claim are proper stewards will have that effect. For a minute, at least, Let's stop being stupid.  

This cannot be good for democracy. But they will probably get away with it. 

darryll k. jones