The close-knit world of liberal donors and the nonprofit groups they support has spent the last week in a state of fear and anxiety, worried that any day now, President Trump could go after their assets or their tax-exempt status.
But it all seemed purely speculative — until Thursday.
In an impromptu news conference in the Oval Office, Mr. Trump confirmed that he was potentially seeking to pull Harvard’s tax-exempt status, in an apparent act of retaliation for the university’s refusal to bow to a long list of demands. And he said there “could be” others, suggesting that the Internal Revenue Service could also take action against organizations that support immigrants or the environment.
“Tax-exempt status, that’s a privilege. It’s really a privilege,” Mr. Trump said. “And it’s been abused. By a lot more than Harvard.”
Ever since Mr. Trump won back power in November, donors have been sweating that a president dead-set on retribution would go after them in personal ways. And so while some of these donors and their allied groups have cozied up to the Trump administration, more of them have worked diligently to lie low, de-emphasizing viewpoints that could attract scrutiny, such as on diversity, equity and inclusion.
“The fear is real,” said Tim Lim, a progressive fund-raiser who said he had held several conversations in the last 24 hours with worried leaders of such groups. “If the Trump administration is successful in removing Harvard’s tax-exempt status, then they could use this same blueprint against every progressive nonprofit.”
At his news conference on Thursday, Mr. Trump specifically targeted Citizens for Responsibility and Ethics in Washington, a nonprofit watchdog group focused on corruption. The group, known as CREW, has issued multiple reports about the Trump administration, including on its seeming defiance of court orders and Mr. Trump’s personal conflicts of interest.
“It’s supposed to be a charitable organization, the only charity they had is going after Donald Trump. So we are looking at that,” Mr. Trump said. “We’re looking at a lot of things.”
Noah Bookbinder, the president of CREW, said in a statement that the organization had exposed corruption “from politicians of both parties” for more than 20 years.
“Good-governance groups are the heart of a healthy democracy,” he said. “We will continue to do our work to ensure Americans have an ethical and accountable government.”
Mr. Trump called Harvard a “disgrace,” but said he did not believe the I.R.S. had “made a final ruling.” He also name-checked Columbia University and Princeton University, suggesting that they should be “very, very careful.”
Mr. Trump’s ability to have the I.R.S. remove individual groups’ tax-exempt status is legally doubtful, at best, and any actions he takes — including against Harvard or CREW — would prompt challenges. Philip Hackney, a former lawyer for the I.R.S. who said he had had several conversations with liberal groups, said “revoking statuses immediately or the president directing an audit of someone are both outside the law.”
But Mr. Trump and his administration have shown their willingness to defy the legal system, and the fear persists.
Many groups that are taking steps to avoid being targeted are doing so quietly, concerned about provoking the administration. Liberal groups that could be singled out include ActBlue, the leading Democratic fund-raising platform, which has already faced pressure from House Republicans and is working with lawyers to prepare for more investigations.
Groups that work on climate change and reducing the production of fossil fuels, like the Sierra Club, are especially worried about coming under attack.
Leaders of climate groups have spent the last few days on conference calls and texting in group chats, desperately seeking hints of what the Trump administration might have in store.
“Last week rumors started, and they’ve just spread like wildfire,” said Brett Hartl, the government affairs director at the Center for Biological Diversity.
One fear is that the administration might use powers under the International Emergency Economic Powers Act, a law that gives the president authority to freeze assets in response to extraordinary threats to national security, to designate environmental groups as terrorist organizations.
Such an extreme move could potentially rest on Mr. Trump’s declaration that the United States faces an energy emergency, a claim energy experts have said is dubious. The administration has aggressively promoted the increased production of coal, oil and gas, and Mr. Trump has argued that efforts to restrict fossil fuels run counter to America’s interests.
Some liberal nonprofit groups have reached out to lawyers who specialize in defending against investigations, or have even commissioned polling to determine how to land the most convincing arguments in defense of civil society.
Still, some are taking a wait-and-see approach. Mr. Hartl noted that environmental groups had long faced investigations from Republicans in Congress, and he said they were prepared to challenge any new effort to restrict their work.
“We haven’t taken any special steps,” he said of his group. And while he did read up on the I.R.S. tax codes over the weekend, he added, “We are not panicking.”
Mr. Trump’s allies have argued that officially apolitical nonprofit groups sometimes cross the line into partisan activity, carrying out thinly disguised work meant to help Democrats or liberal causes. The president has made it his mission in particular to root out D.E.I. programs, and an executive order he signed on his second day in office called for his cabinet to identify foundations by mid-May with over $500 million in assets that carried out D.E.I. work that could be investigated.
Mr. Trump has also objected to “environmental justice,” the idea that all communities should be protected from environmental harms. Lee Zeldin, the administrator of the Environmental Protection Agency, canceled more than $1.5 billion in grants focused on improving the environment in communities of color, calling them “D.E.I. and environmental justice grants.”
Senator Edward J. Markey, Democrat of Massachusetts, said he believed the Trump administration’s targeting of Harvard was a likely precursor to an attack on environmental nonprofit groups.
“Ultimately it is a tool to create a chilling effect across all of the nonprofits who stand in ideological opposition to the Trump revolution,” he said. But he noted that with Republicans in control of both the House and the Senate, there was probably little legislative action that Democrats could take to block the administration.
“I think this will ultimately be a decision made by the Supreme Court of the United States with regard to the legal protections that nonprofit entities have,” Mr. Markey said.
Some left-leaning groups are taking other steps to prepare.
Last week, three prominent liberal philanthropic foundations announced what they called the “Unite in Advance” solidarity campaign, an effort to rouse the charitable sector before any action is taken.
“We in the philanthropic community must not wait like sitting ducks,” wrote the leaders of the foundations. “We must get our house in order — legal teams on speed dial, crisis plans dusted off, reserves lined up — and most importantly, a plan to speak up loudly and together.” As of Thursday, 319 foundations had signed a statement supporting the effort.
One signer, Aaron Dorfman, the president of the National Committee for Responsive Philanthropy, said that nonprofit leaders had been “making sure their organizations’ activities are in alignment with the law.” For example, he said, groups with both 501(c)(3) nonpolitical entities and affiliated 501(c)(4) “dark-money” political entities — a common arrangement — are making sure that they have documentation showing that there has been no improper commingling of nonpolitical and political funds.
Senator Sheldon Whitehouse, a Democrat from Rhode Island who has sought to shed light on the ways that tax-exempt charities and foundations funded by fossil fuel companies spread disinformation about climate change, called the possibility of government action against environmental nonprofit groups “majestically ironic.”
He said that groups, and lawmakers, were watching and waiting. But, Mr. Whitehouse added, the anticipation of action by the I.R.S. is already taking a toll.
“Part of the battle here is, they don’t have to win in order to do damage,” he said, adding, “You do economic damage, requiring people to hire lawyers and fight, while you fight with free taxpayer dollars.”
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