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Background

Trump Proposes Slashing Domestic Spending to the Lowest Level of the Modern Era (post-WWII)

• On May 2, President Donald Trump released a partial budget request for FY26, it indicated the Administration would pursue:
• A historic 44% cut to HUD funding, including a proposed 43% cut to rental assistance compared to the previous year. 
• The proposal would also cut funding for and restructure the Homelessness Assistance Grants (HAG) program and fully eliminate several other programs that provide vital aid to low-income communities and individuals facing housing insecurity.  

Status of “Big, Beautiful Bill”

• Following days of negotiation and an all-night session, the House narrowly approved Trump’s domestic policy bill on May 22. 
• The legislation presents significant challenges for nonprofits, housing advocates, and community service organizations.  
• The bill is now in the Senate, where several changes are expected.

Threats to Non-Profits

The tax bill includes provisions that could significantly restrict nonprofit capacity and impose new financial burdens, such as:

• Limits on charitable deductions and the introduction of new taxes on private foundations
• Nonprofit employers are excluded from important tax credits, including those for paid family leave and child care
• New taxes on university endowments and broader application of the Unrelated Business Income Tax (UBIT)

Though the bill includes a non-itemizer charitable deduction aligned with the bipartisan Charitable Act, it offers only modest relief amid sweeping negative changes.

Additional Concerning Provisions

• Funding cuts to Medicaid and SNAP
• Institutes Medicaid work requirements and requires recertification every six months
• SNAP provisions would alter the structure of the program by requiring states to share in the cost of the program, and dramatically expanding SNAP work requirements up to age 64
• Weakens the Consumer Financial Protection Bureau (CFPB):
• Cuts its funding by over $4B and limits use of its civil penalty fund