Nonprofit Sector Faces Growing Government Funding Dependence

The Johnson Amendment, a longstanding provision preventing tax-exempt nonprofits and religious organizations from engaging in political campaigns, is under threat despite broad public support for its preservation to keep charities focused on community good rather than politics. Meanwhile, nonprofits face growing challenges from increasing government funding dependency, with nearly one-third of their revenue now coming from government sources, which risks undermining their independence and mission focus as they become more accountable to bureaucrats than to their donors and communities. This trend is particularly pronounced among large nonprofits receiving disproportionate government funds, which can crowd out private philanthropy and stifle innovation. In Maryland, concern has been raised over the lack of transparency and accountability in state funding funneled to left-leaning nonprofits, highlighting how taxpayer money can be used to support politically aligned organizations, a practice criticized as integral to Democratic power politics. Additionally, legal developments in Canada, such as the Ontario Superior Court ruling in Hannan v. Scouts Canada, emphasize the importance of clear volunteer policies, which may have implications for nonprofit governance and volunteer management practices. These dynamics collectively underscore the tension between maintaining nonprofit independence, transparency, and accountability in a politically and financially complex environment.