Federal Policy & Funding Updates for New Mexico Nonprofits

Dec 10

Chart of Executive Orders

Chart of Executive Orders Affecting Charitable Nonprofits, National Council of Nonprofits

Proposed Changes to the 2030 Census

On September 10, the U.S. Department of Commerce and the Census Bureau published a proposed rule that would make significant changes to how the 2030 Decennial Census counts people and collects demographic data. If these changes are implemented, it will negatively impact the communities nonprofits serve daily.

The comment period has been extended until November 2, 2026.

Proposed Changes to Federal Grantmaking

As part of the September Continuing Resolution passed by Congress, the proposed OMB changes to federal grantmaking were temporarily blocked through December 11.

When Congress returns to Washington after the mid-term elections, it will have just four legislative weeks to decide whether to continue to block the OMB proposed rule.

Public Service Student Loan Forgiveness

On November 3, 2025 the National Council of Nonprofits, in coalition with others, filed lawsuit challenging the U.S. Department of Education's final regulation that would have allowed the Education Secretary to disqualify certain nonprofit employers from participating in the Public Service Loan Forgiveness (PSLF) program based on their missions.

On June 30, the U.S. District Court for the District of Massachusetts issued a decision. The court held that the Public Service Loan Forgiveness rule exceeds the Department's statutory authority, is arbitrary and capricious in violation of the Administrative Procedure Act, and violates the First Amendment.

The administration appealed the decision and on October 21, dropped its appeal. The June 30th ruling stands.

Proposed Changes to Rules Governing the Community Reinvestment Act

A proposed rule from the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) would make changes to the rules implementing the Community Reinvestment Act (CRA).

The potential effects of the new rule:

Fewer banks would be required to make CRA investments,
Could prohibit banks from making general operating support grants to nonprofits as CRA investments,
Could require larger banks to limit indirect cost rates on nonprofit grants to 15% or less

These changes may also result in less financial support to low and moderate-income communities and local nonprofits, particularly in rural areas, and less development of affordable housing through the Low Income Housing Tax Credit.

Federal Funds and Nonprofit Lobbying

On August 28, the President issued a memorandum to the U.S. Attorney General regarding the use of appropriated funds for lobbying and political activity.

Our colleagues from the North Carolina Center for Nonprofits shared the following:

"The memorandum alleges that "the possible use of Federal grants as slush funds for political and legislative advocacy raises serious legal concerns."

President Trump's memorandum appears to misinterpret the relevant federal statute. In fact, federal law does not prohibit nonprofits (or businesses) that receive federal grants, contracts, or cooperative agreements from lobbying. In 1995, a member of Congress tried to get that type of broad prohibition on lobbying enacted into law, but nonprofits were successful in advocating against it. Instead, the statute referenced in that sentence of President Trump's memorandum (often known as the Byrd Amendment) merely prohibits nonprofits and businesses that receive federal grants, contracts, or cooperative agreements from using these federal funds to influence other federal funding decisions. Nothing in federal law prohibits federally-funded nonprofits from policy advocacy at the federal level or from using other revenue sources to lobby Congress or federal agencies for appropriations or for the awarding, renewal, extension, or amendment of a federal grant, contract, or cooperative agreement.

The memorandum directs the Attorney General to report to the President on the results of investigations into lobbying activities by federal grant recipients in 180 days. It is unclear what, if any, enforcement actions federal agencies may attempt to take against nonprofits that receive federal grants and are engaged in lobbying activities."