Members of Venable’s Nonprofit, Legislative, and Political Law practice groups participated in a post-election webinar addressing the impact of the 2020 elections on nonprofit organizations and associations. The presidential election has been decided, but two key Senate races are entering runoff elections. Over the next month, watching the Georgia runoff elections and keeping an eye on government funding and potential COVID-19 relief bills will be a priority.
Generally, a switch to a Democratic administration will impact policy and spending in the areas of defense, energy and the environment, healthcare, and education, all of which may be relevant to nonprofits and associations. The first 100 days of the Biden administration will likely focus on COVID-19 relief measures and related economic stimulus; immigration reform and refugee assistance; a rollback of environmental changes under the Trump administration; and voting rights advancement. On these and other broad-reaching issues, there is hope that Congress and the Biden administration will work together to advance legislation. Congressional leadership is expected to remain largely unchanged, but individual committees in both chambers will see changes to their leaders. Several authorization bills may address major policy overhauls, such as a reauthorization of the Higher Education Act, and a surface transportation and Highway Trust Fund bill.
Spending priorities under the Biden administration will be markedly different from those under the Trump administration, likely to the benefit of nonprofits. Spending that would impact nonprofits may come in the form of stimulus or COVID-19 relief packages, grant programs, the creation of new programs and affiliated spending, or appropriations. Democratic administrations also typically favor bolstering public institutions rather than private ones (e.g., education, healthcare). There may be a return to a system of congressionally directed spending (earmarks) as a way to fund various institutions and projects.
On the regulatory front, while there are typically more regulatory efforts under Democratic administrations, President-elect Biden will likely focus on rolling back those regulatory changes made under the Trump administration, particularly in the environmental area.
The Biden administration is also expected to push for changes to the tax code, including portions of the Tax Cuts and Jobs Act (TCJA). If tax rates are increased for categories of individuals, such as those with incomes over $400,000, deductions become generally more attractive to taxpayers. Charities should be thinking about their plans to target such potential donors. If the estate tax exemption is reduced, charities should also be soliciting charitable bequests. Corporate giving has been trending toward socially conscious organizations and cause-related marketing, which is expected to continue regardless of changes in the corporate tax rate. Nonprofit executive compensation tax and the excise tax on investment income for colleges and universities could also be unwound. Finally, some Democratic legislators may advocate for imposing a minimum payout rate for donor advised funds, perhaps in conjunction with an increase payout rate for private foundations